When should you fire a customer?
It’s not simply a question of dollars and cents.
By Michael Feuer
January 2008
How many of us can say we will only do
business with people and companies
whom we both like and trust? Probably not too many.
A favorite fantasy of employees is telling the
boss to take the job and shove it. For the boss,
a recurring dream is to tell that recalcitrant, or
even more dubious, customer to take his or her
business and cram it.
The reality is, not many organizations can
afford to do business only with like-minded
customers whom they really respect and enjoy.
It’s a big world out there, and our customers
come in many shapes and sizes with their own
idiosyncrasies and personas some of which
are more tolerable than others.
If doing business were limited only to customers who were liked, there would be no
mega law and giant accounting firms. Huge
multinational investment banks wouldn’t exist,
and most companies would have headquarters
in offices the size of phone booths instead of
skyscrapers. A nice benefit would be all of
these service firms would save money on rent,
but generating enough volume to keep the
doors open could be an issue. The good news
is you’re not marrying your customer. Much
like holding your breath underwater when
you were a kid, you can do it regularly for a
certain period and be no worse for the wear.
The more salient question is, will you do business with people whom you do not trust or
who don’t meet your ethical standards? Every
organization must have parameters and an
internal gauge that rank the “like” and “trust”
factors. When the internal gauge reaches the
“red zone,” then an alarm must sound causing
you to ask some tough questions. Over the
years, I have written a number of pieces commenting on what I call the “mother rule.”
Simply put, you shouldn’t do something if you
wouldn’t want your mother to know. Others
pose the “front-page question”: Would your
company do something if it were reported in
tomorrow’s Wall Street Journal lead story?
Just as individuals should have a moral compass, organizations must employ a similar
series of benchmarks or lines in the sand,
which, when crossed, escalate the status of a
customer relationship to a “go, no-go” decision.
Maybe most of us do have our price, but compromising our ethics can be too costly, no matter how important a customer’s business
might be to the bottom line. If a client’s
methods cause you to wake up at 3
a.m. and ask yourself, “What would
mother say?” then you must recognize you’ve entered the danger zone. Whenever that indelible line is crossed, you cannot turn a blind eye
to behavior that might be inappropriate.
Periodically, any business relationship can
enter a gray area. When the alarm bells sound,
that does not necessarily mean that you have to
“fire” the customer; instead a meeting for you
to probe for honest answers is mandatory. To
prepare for this meeting, have all your facts
together and avoid allegations of “he said, she
said” and glittering generalities. You must be
specific as to what transpired that precipitated
your angst. After the review is completed, you
must be fully prepared to walk or, depending
on what you learn, run away from the customer. Sometimes this is more easily said than
done, particularly when you have to deal with
meeting payroll and paying your bills.
Remember, however, as they say, “You’ll either
have to pay now or pay later.” If you make an
exception because the customer in question
only occasionally crosses your ethics line, the
long-term cost of the infractions might be
much more significant than you ever fathomed,
even to the point of being a fatal error.
On the other hand, taking your concerns to a
customer might lead to an understanding that
allows you to continue the relationship and, in
some cases, not only solidify it, but improve it.
The best way to do business in today’s environment is to have transparency in the relationship, which significantly helps to avoid
unpleasant surprises. It also makes for a more
satisfying and longer-term partnership with
your customers. This criterion will set the right
example for your employees and will also lead
to a much more productive and successful
company. As an added plus, you might actually,
every once in awhile, sleep through the night.
In terms of doing business only with people
you like, it’s akin to the old adage: “You can pick
your friends but not your relatives.” In the case
of business, sometimes your customers are
comparable to those certain relatives. The
good news is, you don’t live under the same
roof with your customers; you’re just taking
their money for services rendered.
MICHAEL FEUER co-founded OfficeMax in 1988 with a friend and partner.
Starting with one store during a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide, with annual sales approximating $5
billion before selling this retail giant for almost $1.5 billion in 2003 to Boise
Cascade Corp. Feuer immediately launched another start-up, Max-Ventures,
a retail/consumer products venture capital operating and consulting firm
headquartered in suburban Cleveland, Ohio. Feuer serves on a number of
corporate and philanthropic boards and is a frequent speaker on business,
marketing and building entrepreneurial enterprises. Reach him with comments at mfeuer@max-ventures.com.
