How I fired a big customer and so can you

Karmesh
Karmesh
Jun 21, 2018 · 5 min read

“ Put yourself out of business every single day. Fire yourself every single day.” John Lee Dumas of eofire.com

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I never realised how profound the above statement was until my own story flashed before my eyes.

Growth is inevitable and when you are so focused on it, you got to crush whatever comes between you and growth.

That means crushing your bad habits, dumping idiotic friends, stop selling the same products, firing team members that don’t work and also firing your customers that don’t help you grow.

Background

It was in 2013 and we had this customer for 4 years until I came in started taking reins of this division in 2012.

We were so comfortable servicing this client because there wasn’t any other client to replace.

And the fact that they literally exploited our BPO staffers was overlooked.

The customer had steady flow of business and was one of the biggest names in the IT-BPO industry.

But, the P&L statement looked like a bloodbath.

And then my mission started.

Start with the end

I started making mental notes and Evernoted them.

Basic questions like

  • How would my business look if I fired this customer?
  • What do I really want from this?
  • I visualized what the salaries and commission level would look for our staffers.
  • What would the top-line and bottom-line I want year on year to be sustainable
  • How many clients do I need to make this possible
  • What efforts would it entail to accomplish all the above?

Be a great swimmer

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If you are looking to burn bridges you better be a great swimmer, says the old adage.

I wanted to have just one client on board before I start negotiating with this blood sucking customer.

Diplomacy never goes out of fashion.

I wanted to present reasons why they should hike their unit pricing right now.

I strongly believe in reasoning and being driven by a higher cause. Hoped my customer had similar values.

It took me 45 days to crack a new deal and it was big enough to actually fire this customer.

But no. I wanted another customer to consolidate the position.

And in one quarter there were 2 New customers!

Walking away is power

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During any negotiation the party that can walk away without a flinch is the winner.

The guy who bends backwards is primed to lose.

I was willing to lose this customer in my mind however my heart wanted to retain.

Sent a polite email to start considering a rate increase starting next month.

There was silence for 3 days.

Not acceptable!

That clearly showed how much we were not on equal pedestals.

Business is done between equals; there should never be a master-servant relationship.

If you have too much dependence on one client it means either you suck in getting new clients or the client is really paying you great that can cover your costs for 2 years.

My follow up email subject line read: “ exit clause as per agreement”.

Yes, the reply came in 10 minutes.

Now we were talking.

Being a commodity isn’t sexy

The problem with services business is that we are hell bent on screwing it up.

We are so lazy that the only reason we believe the customer will give us business is because of our price.

That’s a commodity — like a piece of soap or a bottle of beverage.

My business isn’t a commodity — we add serious value to our customers via our quality mechanism, turn around and highly responsive management.

Not to mention the price, we were cost effective as compared to any other BPO center comparable.

When you know your strengths quite well, don’t buy any snake oil from anyone telling you otherwise.

The vendor manager from the customer tried to pull me down to a commodity saying “There are so many other vendors who can do the same project at a lesser price.”

I reinstated my value to their business over email and wanted a conference call.

Yes I was willing to walk away and put the entire risk of a messy business transition on to their heads.

They proposed a 20% hike next month.

I wanted 80% this month.

I asked to get a replacement project which pays better.

They said they would need a month to consider

I gave them a week.

It always feels great when someone yields.

Pipeline is your lifeline

The bird sitting on the frail branch doesn’t believe in the strength of the branch but relies on its own wings.

I love the above quote.

No one should dictate how you do business or live your life.

Always have a failover — a Plan B and a Plan C.

My failover was to increase marketing and lead generation efforts, boost face to face meetings and basically have an “abundant” pipeline.

By end of 2 quarters my pipeline looked so strong that I didn’t have to depend on any single customer and put my staffers jobs at risk.

A strong pipeline of leads and customers is an insurance policy for your business.

Now back to the story. The customer wasn;t willing to agree to any of my terms like increase in unit pricing or replacement of the project.

We were happy to say goodbye and completely exit from that contract.

One month from my first stinker email, the big customer was gone.

But the business didn’t crash or burn.

I had great team members in operations and client relations who could quickly deploy new customers.

We were back on track and ready for more business!

In closing

Look out for signals that your dependency on one single client is increasing above 20% of your total revenue.

Never hesitate to look for help and call for an emergency meeting with your core team.

Stay tight with your team members and tell them that you are actually planning to fire your biggest customer.

Take ideas from them and ask them to lead in some fronts.

Cut your emotions and make it all about your business objectives.

Do whatever it takes.

If you think firing your biggest customer is a big deal try firing yourself when you know you aren’t performing. This one for later..

Author bio: Karmesh Ghosh, is Sales professional; has been hustling, and closing deals for the past 1.5 decades. Avid reader and loves foreign language movies. Writes on sales and marketing strategies for small and medium businesses. Currently, lives in Mumbai. Loves food and fast bikes

Karmesh

Written by

Karmesh

SALES MINDED |Hustler by Heart | Eternal Go-Giver www.karmaworks.co

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