Costco Connection - January 2006

chats with customers. Sometimes, she says, companies end up pleasantly surprised that their long-term plans match customers’ future requirements.

“It’s really your job,” says Zimmerman, a Costco member, “to maintain a good dialogue with customers and mine them for future opportunities.”

But if it appears that customers aren’t a strategic fit, don’t fire them before asking yourself critical questions. Can you afford to dump a particular customer? Will you lose prestige? Does the client still owe you heaps of money? And, very important, what is the likelihood that a canned customer will bad-mouth your business?

“You don’t want to burn bridges,” says Jil Wyland, president of Litigation Presentation, a 10-employee Atlanta firm that produces visuals to support courtroom presentations. “When something bad happens, the [business] community becomes very small. Bad word of mouth travels much faster than good.”

After carefully weighing the risks and determining that pruning a customer is the next best move, consider the following measures.

Face them. If feasible, meet the client in person. Explain your company’s position and listen respectfully. Keep the termination discussion on point and professional. Do not personalize matters or criticize these customers in any way, which might anger them and fuel combustible word of mouth, advises Zimmerman.

Ease the pain. As a goodwill gesture to an exiting customer, consider offering a discounted product or service or complimentary tickets or coupons. Wyland actually paid for dinner when she pink-slipped a client.

Offer alternatives. Graciously suggest another reputable company (or two) that could offer the client services/products. For example, an accountant moving into a busi-ness-tax expertise could refer family clients to a general practitioner. In some cases, another business would be a better fit for a client anyway.

Leave the door open. Underscore how much you have appreciated the customer’s business, and how agonizing the decision was to part ways. And, assuming everything else is acceptable, tell them you’re open to renewing the relationship down the road should their needs mesh with your strategic plans.

In the end, it’s a difficult choice, even counterintuitive, to fire customers. But if maturing companies don’t occasionally do this, they might contribute to terminating themselves. C

Harvey Meyer is a St. Louis Park, Minnesota, freelancer who writes for a variety of business, consumer and general-interest magazines.

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