Appeasing and supporting your customer is always good business, as, in the end, they are the ones paying your salary. For most companies, efficient customer service can lead to an increase in sales and boost the company’s profile through positive word of mouth. Typically, the care and attention paid to your customers is returned in kind by them providing you with additional business, resulting in a great experience all around.

But what happens if you encounter someone who doesn’t act accordingly? What if a customer is rude, problematic, or takes advantage of your business? Isn’t the customer always right? In some situations, customers are wrong. Sometimes, when it comes to better business practices, it makes sense to “fire” your customer so that they do not bring you down. Below we’ll discuss why hiring and firing the right customers is critical for your business to succeed and your employees to remain happy and productive.

Cleaning House

In some industries, it’s particularly easy to know who to retain and who to let go. Any business that deals with clients should know how to maintain their clientele. There is an important rule regarding this type of situation, and it’s called the Pareto principle, named after an economist who said that there is usually an 80 to 20 ratio when it comes to clients and profitability. 20% of your customers account for 80% of your business, and, similarly, 80% of your problems can be traced back to 20% of your customers.

So how do you go about separating yourself from that problematic 20%? You tread carefully; that’s how. Firing a customer is a delicate situation, as it could always come back to haunt you later. If you rely on word of mouth, firing someone, even if they are troublesome, can lead to negative reviews. You can try charging more for your services: this can help to retain only high-end clients. Other times, you you can simply talk to the customer and let them know how they are affecting your business. Tactfulness is critical as you don’t want to come across as rude or dismissive to their needs. Sometimes a customer is unaware of how their actions affect the company, and just need a simple reminder to adjust their actions.

Referrals

An ideal way to get rid of a problematic, or less profitable customer is to refer them elsewhere. Politely explain that you are not equipped to meet their needs and that they can be better assisted somewhere else. This provides a solution for both of you, and can help lead to an amicable split.

It’s never easy firing someone, let it be an employee or a customer, but, in most cases, it’s a necessary evil. For your business and your sanity. Although this will rarely need to be done, always be aware that firing a customer is an option and there are a few ways to go about it. Try using the 80/20 Pareto Principle that helps you determine how hiring and firing the right customers will benefit your business