The True Cost of Your Worst Customer

Are you spending more time on a customer trying to keep them happy than what revenue they generate? Do you find yourself spending a good part of your time helping one customer?

If so, it may be time to let them go. A bad customer can cost your company money and more importantly time. This is a lesson many businesses have a hard time with. As a business owner I always try everything in my power to make the client happy. Sometimes no matter how much you try it seems like they are never happy.

I learned this lesson by default a few years ago when I sensed the relationship between my company and the client was starting to deteriorate. I tried everything to salvage the relationship. It cost me almost a year of brainstorming and sleepless nights. Not to mention my focus was fixated on salvaging this one client who was 10% percent of our revenue. They ended up leaving after that year and all that effort was wasted.

So I was confronted with a similar issue just recently and felt I was slipping back into the habit of shifting all my focus to this one client. My management team and I met and we looked at the account and discussed all options. In the end, we let the client go. Gave them 3 months to transition to another firm and we committed to helping them transition as seamlessly as we could.

The funny thing was once we committed to letting them go a calm came over me. My focus was where it needed to be for the good of the organization. I am happier and relaxed. The day after we let the client know, the phone rang, a new prospect called.

On the call, I booked an appointment to meet with them three days later. By the end of the appointment, they liked our company approach and culture, and were ready to move forward. I left the appointment absolutely amazed. Usually it takes us at a minimum one month to close a deal of this size. We did it in the first appointment. To top that we did this all the day before Christmas Eve. A time when we don’t even try to book any new sales appointments or seek sales leads.

So what’s the moral of my story? Be honest with yourself. Evaluate your worst customer. Are they silently damaging your company? Are you losing money on this customer? Are you and the client not a fit? Do you find yourself clinging to the client trying to salvage it? If the answer to any of these questions is yes. May be time to let them go.

Originally published at blog.heidentechnology.com. For more business ideas, thoughts, and insights connect with Carl on Facebook, Twitter, and Linked In.