Why you may need to fire a customer

You invest a lot of time and money into customer acquisition. After you’ve successfully acquired a new customer and built a relationship, you may feel hesitant to end it. Despite this, it may be necessary to let a customer go. Toxic business relationships can cause unnecessary stress for you and your team.

Bad customers may also result in a loss of money, time and other resources. In extreme circumstances, terminating a relationship may be worth the cost of finding a new customer.

Signs you should consider ending a customer relationship

You may need to fire a customer if they are:

• Unsafe. You should always end a relationship if a customer is physically or verbally abusive or threatens violence against you or your team. Sexual harassment from customers should also not be tolerated.
• Consistently rude. If the customer is aggressively demanding or extremely rude during every interaction, you may need to terminate the relationship to protect your team’s mental health.
• Dishonest. You can’t maintain a good working relationship with someone who lies or attempts to steal from you.
• Unreasonable. If a customer demands that you offer services that are far outside the scope of your usual work and won’t relent, you may need to walk away.
• Frequently late with payments. You may not be able to afford to keep a customer who is always slow to pay.
• Extremely argumentative. A customer who repeatedly disputes every invoice or criticizes every aspect of your work may require more much time than they’re worth.
• Negligent. Consider ending a relationship if a customer repeatedly causes problems because they fail to follow your advice.

How to fire a customer professionally

Knowing how to fire a customer in a professional manner increases the chances that you can part ways on good terms. Following these tips will help you end the relationship as easily as possible:

1. Assess the situation

Before you fire a customer, thoroughly assess the situation to identify any other potential solutions. Determine whether you have similar but less severe problems with other customers. You may find that changes to your system or customer care practices may improve the relationship and provide a better experience for your entire customer base.

For example, let’s say the customer in question became irate when a customer service representative discussed a policy with them, while other customers responded more politely. In this case, take another look at the policy and see if the rule or how you communicate it needs to change.

You can then go to the problem customer and report the modification. During the conversation, point out that while you understand why they were upset, the way that they spoke to the customer service representative was unacceptable.

2. Only involve the management team

Employees who have regular customer contact shouldn’t be involved in the decision-making process or the actual firing. Keep discussions between senior management. You don’t want your team to believe that ending a customer relationship is now a routine practice.

If you ultimately decide to terminate the relationship, a member of your management team should notify the customer. If possible, choose someone who has had contact with the customer before.

3. Communicate the right way

Although it may be uncomfortable, you should communicate verbally with the customer to end the relationship. Don’t send an email or write a letter. When possible, schedule a face-to-face meeting. If security is a concern or you can’t meet in person, contact the customer by phone.

4. Speak factually rather than personally

Avoid criticizing the customer’s character or personality when ending the relationship. Focus on the facts of the situation, rather than making accusations, and explain why this is a problem. Here are two examples:

• Don’t say: You’re rude to our customer service representatives.
• Do say: You raise your voice and insult our customer service representatives, making it hard for them to give you the best possible customer service.

• Don’t say: You’re stubborn and you never listen to us.
• Do say: You disregard our advice and then hold us responsible when you face negative outcomes. This unnecessarily increases the workload of our team.

5. Stay calm in the face of anger

Despite your best efforts to communicate professionally, the customer may become angry during the conversation. Allowing your temper to rise will only worsen the situation.

Take deep breaths and remind yourself that the discussion will come to an end. Stay focused on the goal. Remember that once you finish the task, you likely won’t have to interact with the person again.

6. Be prepared for negotiations

Some customers may try to negotiate their way out of the conversation by offering to pay you more or promising to change their behavior. Go into the discussion with a plan for how to handle this. Ask yourself if you would want to maintain the relationship if the customer were willing to make changes.

In some cases, the answer will be no, and you’ll need to remain firm in the face of the customer’s protests. If you do decide to give the customer another chance, establish conditions. Make it clear that if the customer doesn’t live up to their end, you’ll have no choice but to end the relationship.

7. Refer the customer to someone else if appropriate

If you believe your company simply isn’t the right fit for the customer, consider referring them to a competitor who you think can better meet their needs. Don’t offer a referral if a customer was abusive or dishonest.

Firing a customer FAQs

What does it mean to fire customers?

Firing a customer means ending the relationship. The term comes from the slang for terminating an employee.

What should I say when firing a customer?

Tailor your words to the situation. If you wish to avoid confrontation, you can simply tell the customer that you’re shifting your focus away from the type of work you’re currently doing for them. Alternatively, be direct and politely point out the issues in the relationship before saying you no longer wish to do business with them. Practice your speech with someone or write it out to ensure you say the right thing.

Can I raise my rates to fire a customer?

Sometimes, raising your rates may cause a current customer to take their business elsewhere. However, you run the risk that the customer will gladly accept the rate increase. At that point, you’ll likely find it difficult to sever the relationship.