5 ways to get rid of bad customers

Do you have a customer or client who makes your heart sink when you see an email from them? They are commonly called PITAs (Pains In the Whatsit!).

In my experience, they are often the ones who pay you the least and are inversely the most demanding. They seem to think that you are entirely devoted to them and that it’s not unreasonable to ask you to do work for them for free.

There are other hard work clients who take up a disproportionate amount of time such as:

• The cheapskate mk2 who decides they can do some of the work instead of paying you (and invariably makes mistakes that you then have to undo)
• Those who never respond to requests for information until the 11^th hour leaving you frantically scrabbling around to hit the deadline
• The ones who have no respect for your boundaries and will want an immediate answer to an email they sent you (at 3 am on a Sunday morning) or are rude to your staff.

So how to deal with them?

A general rule of thumb is that you will get 80% of your revenue from 20% of your clients.
Run a report by customer, revenue and profit.

From this, you can identify who your best customers are. Highlight the PITAs. Some may be in your top 20% but typically most of them will appear in the less profitable 80%.

These are the ones you can risk losing because they won’t make so much impact on your revenue and profitability. Removing them gives you more space to deliver a better service to your good customers and will allow you to replace them with customers who pay you well, are profitable and you like working with.

It is vital that you have an agreement in place with your customers at the start of your relationship which details how you will work together; what your and their obligations are, what the scope of work being paid for is and the payment terms. Please make sure they have signed a copy of it!

1. Explain clearly why you wish to terminate the relationship

   This is really important. Particularly if they have been consistently unreasonable, dishonest or treated staff poorly.

2. Be polite, but firm
   

   Remain polite and friendly even if they get all aereated. Don’t allow them to talk you into staying with you. If you’re sure they’re not right for you, then stick to your guns, you’ll only regret it later if you change your mind.
   If you can offer them an alternative, if there is one, this can soften the blow.

3. Increase your prices (a lot)

   This one works a treat for the cheapskates. They will self select out.

   Equally, if you are talking to a prospect who you feel might be challenging – double your prices. That will either put them off or if they agree, accept they will be hard work and suck it up!

4. Eliminate bad payers (or change the payment terms)
   

   If they are consistently bad payers but otherwise good customers, let them know that you either want them to move to a monthly direct debit, or you may have to terminate the agreement (referring to the payment terms in your agreement).

   If they aren’t good customers and despite constant poor payment you have reminded them about endlessly, politely serve them notice (referring to the payment terms in your agreement).

5. Arrange a handover
   

   Unless the relationship has completely disintegrated, make sure you agree a departure/handover plan rather than just cut off the relationship.

Ideally, you will want to remove these PITAs with the minimum of fuss and angst. Even if they’ve been hard work, you don’t want to destroy the relationship and run the risk of them bad-mouthing you. And in most cases, their leaving is the best outcome for both of you.