Customer relationships should be a win-win. If they aren’t, it’s time to put an end to it. But that shouldn’t be a quick decision, nor should it be done in an email or text message.
A process is needed. Today we look at when and how it is best to say goodbye to a customer.
When are you going to say goodbye to a customer?
Saying goodbye to a customer starts with two broad areas of analysis. First, you will need to look at the financial and interpersonal perspective.
- Financial Perspective: Does the customer cost more to serve than they bring in in revenue? In almost every industry, there are customers where you lose money by hooking them up, either in terms of product returns or in terms of customer acquisition costs relative to revenue earned. With these customers it is easy to see that something has to change.
- Interpersonal Perspective : Is the Customer Overloading the Team? This second group is trickier as they can be profitable for your bottom line. But if working with them is a horrible and challenging experience, they can destroy your employee experience – and lead quality employees to look for other work. That’s why it’s best to consider whether it’s worth keeping them.
Once you’ve looked at these areas in a broader perspective, it’s time to look at the problem in a little more detail. Determine the long-term value. Is your customer strategically important?
Hold on tight when you do. Right now you may not be making what you hope for and want to say goodbye to a customer, but in the long run they may be economically valuable.
For example, it can be a well-known brand that expresses itself positively about you. Or maybe they are very strong in adopting new products or services that you launch. Customers can contribute to your business in other ways, it’s not always just about your wallet.
This also works the other way, by the way: you have to check carefully whether a company has a bad reputation and whether their association as a customer reflects negatively on you.
That is why it is important to look at the amount of resources needed to serve the customer. Of course some customers need more attention than others, that’s normal. But clients shouldn’t create work in the simple parts of your relationship.
Suppose your customer does not pay his bills on time or asks for longer payment terms, then something that is just basic already costs too much energy. Because that’s how it comes down to your company subsidizing his.
Who decides to say goodbye to a customer?
The decision to say goodbye to a customer differs per department. They do affect the entire organization, but some feel it worse than others.
In this way, prejudices within your organization cloud the decision. If you ask sales, no one ever says goodbye to a customer. That puts pressure on sales. It doesn’t matter to them that the customer pays their invoices late or that your customer contact department is calling flat.
That means the decision to say goodbye to a customer needs an independent vote. An external consultant is often a good choice. It takes a harsh perspective that an internal person cannot.
In other words: a consultant can tell you that your child is ugly, Marietje from Marketing cannot.
What pitfalls are there when saying goodbye to a customer?
There are a few:
- Don’t count all the resources involved in account management: it’s often surprising how many departments are involved with a customer and the time it takes to serve them. Take a look at everything and create an overview of all the hours spent on the customer each week, from marketing to accounting to contact center employees. Then calculate what it will cost you and compare that to the revenue of that customer.
- Not seeing the signs of your responsibility in the problem: Customers are being harassed for a variety of reasons, not just one. Some of this may be because of you. Look closely when things went wrong. You may have contributed to the problem by accident, and you can fix it by slightly changing it operationally.
- Don’t look to outside influences: Another pitfall that can lead you astray in your customer decision-making may come from outside your specific relationship with that customer. For example, you could look at your overall customer satisfaction scores for your organization in general. Is it just this account, or are all your accounts not responding properly? If your customer satisfaction scores are high, make sure those scores are unbiased. In other words, are you getting a false high score because of the way you ask or the group you ask?
- Deciding to part with them before parting: Sometimes you’ve already ended a relationship before it’s official. You subconsciously withdrew before the conversation took place.
Saying goodbye to a customer: 7 tips
You have taken a close look at your customer relationship and have come to the conclusion that there is nothing left to save. It’s time to say goodbye and make your customer the competition’s problem. But how do you do that in a good way? We have seven steps for you.
Realize that every customer is different
There is no universal approach to saying goodbye to a customer. Customers need an individual approach. Moreover, with larger accounts you often have to deal with more than one person and all those people also need a personal approach.
However, the message must be consistent regardless of the process. In addition, it is important that you personally explain to the person with whom you have had the most contact why you are saying goodbye.
Frame the situation in the right way
Be honest with your customer, but discuss the matter in the most positive way possible. Explain why it no longer works for you and why the relationship is no longer a win-win.
Explain the logic
Show where your decision came from and share the approach you took to arrive at this decision, including any estimates or figures.
Prepare for an emotional reaction
It’s never nice to be dumped and that is probably no different for your customer in this matter. Saying goodbye to a customer is no different. Be prepared for an emotional reaction and don’t get carried away.
Apologize and be empathetic
Acknowledge that you may have made your contact’s job more difficult, or that they may face internal backlash as a result of your decision.
Offer to help with the transition to another person
It is best to have suggestions for the next steps. Be prepared to provide a timeline for when your customer can switch and what they need to do to partner with someone else. Or refer them to a competitor.
Make sure you don’t send your customer into the reeds with a clump.
Stay in contact
You never know what will happen later. Try to keep the relationship intact as much as possible as people are moving to new jobs and organizations. You can now say goodbye to a customer, but it is possible that your contact person at his new employer wants to work with you.
That personal bond can remain intact even if the business relationship is over.
Balance is key
How this decision plays out will affect your business and your reputation. Make sure the goodbye is pleasant and make sure you keep the door open for the future.
In addition, the decision to fire this customer should also show you what kind of customer to avoid in the future. No company can serve every customer, and you need to know what kind of customer suits you best.
Target that type of customer in your future customer strategy sessions. The last thing you want is to endure a repeat of a similar, and just as awkward, clientele.
Say goodbye the right way
There will be times when a customer relationship doesn’t work and you have to say goodbye. It is crucial for your company reputation that you say goodbye to a customer in the right way.
Start with a good analysis from a financial and interpersonal perspective and go from there.
Are you going to say goodbye to a customer? Then take into account all factors that contribute to the problem. Do you occasionally have to say goodbye to a customer? Yes. Should that be the first thing you do when the going gets tough? New. There are always other possibilities.