Michelle Rodger: If the customer is wrong, don't be afraid to fire them

Published on Friday 1 October 2010 13:00

THE first rule of business: "The customer is always right." The second rule of business: "If the customer should happen to be wrong, refer to the first rule."

And so it has been since 1909 when Harry Gordon Selfridge founded Selfridge's department store in London. His aim was to convince customers they would get good service and his employees to give good service.

But is it the right way to do business? You see, if you're honest with yourself, you'll agree not all customers are nice. Some are downright awful, and some drain both your energy and the profit from your business.

So is it fine to tolerate late or non-payment, abusive dialogue or constant complaining about your product or service to keep the customer happy? Despite what Mr Selfridge believed, the answer has to be absolutely not.

Retaining a bad customer can be bad for employee morale for a start. Side with a customer over an employee and you're just asking for resentment and a couldn't-care-less customer service approach. It's bad for business, and sometimes firing those customers is the only way to resolve the situation.

Web designer Andrew Burnett remembers a client who wanted a low price but also took up a disproportionate amount of his time. He saved them 70 per cent of their online marketing budget, but when it came to settling his invoice they were less than enthusiastic.

After chasing them doggedly for payment and finally getting it, he told them he was no longer prepared to work for clients who valued his services so poorly. Burnett, of www.andrewburnett.com, says: "Firing them gave me the confidence to not put up with such circumstances in future and more importantly freed up time to work for people who did and do appreciate the value of what I do."

Heather Burns suffered a similar experience after a personal expense incurred by Burns on behalf of a client was not paid. When she tried to claim back her own money verbal abuse and abusive e-mails followed, until finally Burns told them that because they had offered no indication that her personal expense would be reimbursed, she was unable to continue working with them and would not be delivering the finished website.

Burns, of Idea15 Web Design, now refuses to work with "micro-budget" clients. "If you cannot afford my services," she says, "You have no business asking for them."

But she believes that firing a client can actually be quite healthy. Every business relationship has its ups and downs, but if the downs no longer make it worth what they are paying you, then drop the client. That, explains Burns, is a space freed up for another client who won't cause you to tense up at the mere sight of an e-mail from them.

Firing clients has taught Ian Matheson to be much more careful with clients, since he believes abusive behaviour shows through in the bidding process.He's now much less willing to give free time to clients and much quicker to point out to them when they could work better with him and his team.

After firing one major client who had just spent about 100,000 over six months, Matheson then risked losing 30,000 on another difficult client, who became much more amenable after being tackled about her behaviour.

Matheson, of People Work Best, would do it all again - in a heartbeat. Suppliers must be assertive with abusive clients or their malpractice, he insists.

Yes, you may lose revenue if you fire the client, explains Matheson, but better that than poor-quality revenue where margins are eroded by client unprofessionalism.

And he advises being picky about your clients. If you work well together the work will be more profitable and will be fun. They'll also be excellent advocates for you, whereas you won't want an abusive/bad client as a referee.

We all know the old adage: "You can make some of the people happy all of the time, and you can make all of the people happy some of the time, but you can't make all of the people happy all of the time". It is so true.

So maybe we shouldn't try, and maybe the first rule of business should now be: "Choose your customers as carefully as you would choose your employees and, in the same way, fire them if they don't meet your contractual or moral obligations."