Fire your problem customers in order to improve your startup’s business. A customer anticipates that he will be well treated. That is fine. It is a startup’s job to deliver reasonable service to its customers. But, a Startup also has the right to expect that its customers will not make unreasonable demands.
So, when a customer’s demands become unreasonable, it is time for the startup to move on. That unreasonable customer needs to be cleaned out.
As the customer crosses that clear red line; the startup starts thinking about when to fire its problem customers. This is easier with smaller customers and more difficult with larger customers. Just remember that problem customers cost time and money, that can be reallocated to more productive tasks. Never allow yourself to be a one customer business.
Compare a problem customer’s revenue to the cost and time to support him/her. If it is a clear significant loss then you know what to do. Further if the customer is damaging your employees’ morale; you can not afford that. You can just politely decline to extend the contract. Ideally both you and each customer will see your relationship as a mutual win. There is respect honesty and satisfaction on both sides.
When the relationship starts to drift towards a winner and a loser you need to be very alert. You need to think of the complete customer life cycle for each customer. Watch out if a customer is:
- Constantly making excessive demands and not responding well to your employees then a change is required
- A threat to your market image then solve the problem quicker rather than later
- Constantly paying very, very late then you can consider what should be done
When you do need to fire your problem customers; it is best to be prepared. Customer contracts are the best form of preparation for potential future problems. If you are a retail store without contracts, you can post your terms and conditions in a prominent place.