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Young Entrepreneur Council Mentors: When Is It Okay To 'Fire' A Customer?

04/27/2011 04:19 pm ET | Updated Jun 27, 2011

Q: How much of my company's resources should be devoted to a difficult but valuable customer?

The following answers are provided by the Y.E.C. Mentors. Co-Founded by Donna Fenn and Scott Gerber, Y.E.C. Mentors is an initiative of the Young Entrepreneur Council, a nonprofit organization that provides young entrepreneurs with access to tools, mentorship, community and educational resources that support each stage of their business's development and growth. Y.E.C. Mentors' members are successful executives, serial entrepreneurs and thought leaders.

A: Are They Really Worth It?



Our staff, vendors and clients are held to our core values and culture. If a client violates our core values -- particularly respect, or morals and ethics -- I will discuss the issue with the client. If the problem persists, fire the client. Our staff are people pleasers. A difficult client can undermine good staff, erode the culture and adversely impact the treatment of other valuable clients.
--Tom Walter, Tasty Catering

A: Focus on the Lifetime Value of a Customer



This is a great question -- especially critical for startups as you are looking to establish and grown your business. You should focus on the lifetime potential value of the customer -- are they a customer for "now" with not much potential in the future or is there a lot of potential for growth in the future? Weigh the economic value of the particular customer.
--Leonard Schlesinger (@lschlesinger), Babson College

A: Trust Your Gut



Talk CEO to CEO to assess whether a solution can be reached. Your resources may be better spent replacing the difficult customer (while they are still a customer) with equally valuable..but easier to work with customers.
--Sharon Lechter (@sharonlechter), Pay Your Family First

A: Transparency is Crucial For Keeping Difficult Customers Happy



If you are transparent about your product and services and offer a Customer Service phone number or electronic means of transparency like a Blog, then consumers will typically not remain difficult. Due to social media and the viral effect of negative crisis to erupt, companies and CEOs are closely monitoring their customers' feedback on Twitter or Blogs.
--Naveen Jain (@Naveen_Jain_CEO), Intelius

A: Determine the Customer's True Worth



What is the customer worth to you? Don't answer that question simply in dollars. How many new customers will they lead you to? Do they open doors for you because they are a customer? What would the downside be if you don't make them happy? Happy customers tell two people. Unhappy customers tell ten.
--Michael Holthouse (@lemonadeday), Prepared 4 Life

A: It's Not Worth Being Miserable to Serve a Client



We are in business to serve our customers. That said, some customers are more difficult than others and demand a lot of time and resources to service them. Business should also be fun! (We work hard enough as it is). If they make you miserable- the answer is easy- time to end it. Its not worth being miserable to service a client- might as well work for someone else if you do that.
--Ingrid Vanderveldt (@ontheroadwithiv), Ingrid Vanderveldt LLC

A: Do the Drain Test


It is always difficult to fire a customer, but sometimes it is imperative. I recommend what I call the "drain test". How much of a drain is the customer on your organization? You must consider the overall affect this situation is having on you and your business. Sometimes when you are struggling with a difficult customer it tarnishes everything you touch. Be wary and stay aware.
--Susan Solovic (@susansolovic), It's Your Biz

A: Weed Difficult Customers Relentlessly



Companies need to be crystal clear about the profile of customers who align with their strategy, culture and resources. "Difficult" customers can range from an ill-mannered executive to an account that always needs extra hand-holding and support. Prune non-ideal customers relentlessly. Over time, they drain the life force out of your organization, and stop you from finding more ideal fits.
--Pamela Slim (@pamslim), Escape from Cubicle Nation

A: Minimize Contact With Your Staff


Try to isolate the number of people in your organization who are dealing with the difficult customer. You don't want that customer to burn-out your staff. Put mature staffers on the account who can handle the challenges without getting frustrated. Customers come in all shapes, sizes and temperaments. If you can't yet afford to turn the difficult ones away, figure out how to work with them.
--Reed Phillips(@ReedBanker), DeSilva + Phillips