How to know when it's time to let a customer go

Ben Taylor

We live in challenging economic times, so the idea of turning away paying customers is sure to sound a little counter-intuitive. However, all successful businesses eventually end up encountering occasional clients who simply aren’t worth the money they pay.

ClientsLetting a customer go is a significant decision, especially if the money they pay makes for a significant amount of your revenue. Even then, however, it may be the right thing to do.

Here are five questions you can ask yourself to help you decide whether the time has come to part company with a particular client:

1. Is the client causing undue stress to you or your staff?

If a particular client keeps ruining everybody’s day, it should provide a clear signal that something’s not right.

It’s certainly not fair for one client to destroy your company’s morale, which in turn will impact the quality of service you deliver to other clients.

If you think a client may be generating stress for your workers, have an open discussion internally. It’s important to eliminate individual personality clashes or “problem users” before assuming the client (as a whole) is at fault.

2. Does the client pay?

Let’s assume the client always pays eventually, or otherwise you wouldn’t still be working with them, but is obtaining payment a constant challenge?

It’s important to differentiate between clients who pay late habitually due to policy or inefficiency, or those who are deliberately indifferent to handing over money. Some of the largest companies pay late as a matter of course, and sometimes its worth putting up with chasing invoices every month for the guaranteed income.

However, companies that are deliberately awkward about payment are sometimes not worth persevering with. Furthermore, constant payment problems may indicate that the customer is in financial difficulty.

3. Are they listening to your advice?

Providing IT support always has a consultative element. The best clients respect your knowledge and experience, and allow you to manage the infrastructure according to best practice.

Sadly, some clients always think they know better, and perhaps overrule your advice, leaving you with a system that’s difficult and stressful to manage. If this attitude is taken to too much of an extreme, you may find yourself in an untenable position.

4. Is their infrastructure in a respectable state?

Computer equipment can become troublesome with age. Clients who don’t invest consistently and appropriately in new equipment can leave you with systems that are unnecessarily hard to look after.

Of course, there will be times when budgetary constraints mean you can’t have absolutely everything on your “wish list,” but clients who expect you to coax flaky and unstable systems into working consistently will always become an unfair drain on your time.

5. How much time is the client consuming?

If you’re considering parting company with a client, think about how much time and energy you (and your staff) spend on that client compared to others who earn you a similar amount of revenue. If the time split is out of whack, you should see this as a warning sign.

Saying “goodbye” to a paying client is never something you should do lightly, but the experience can prove cathartic. The good news is that the time you free up can be spent finding a replacement customer, who will hopefully turn out to be a better working partner than the one you had to let go.

Have you had to let a customer go before? Tell us about it with a comment below!