Service Untitled

As I introduced in my last post, Justin Kitch, who is the CEO and founder of Homestead.com suggests that companies should fire their customers when they become ongoing problems. The decision to fire customers is based upon his prioritized management/decision making model called the Homestead Creed.

This post is going to talk about why and how to “fire” your customers. Note: I would never suggest “firing” a customer unless all options have been exhausted. It is not a good thing to do and should be avoided at pretty much all costs.

Pros:

• No need to deal continually deal with bothersome customer
• Easiest on staff
• More profitable

Cons:

• Generally a bad practice from a customer service point of view
• Lost business
• Likely bad word of mouth (customers who get “fired” have a tendecny to let others know about it)
• Lots of room for error
• Further bad publicity if story gets noticed or if situation is mishandled by staff

Reasons to “fire” a customer:

• Customer is constantly rude to employees
• Customer does something that violates Terms of Service, Acceptable Use Policies, that is illegal, etc.
• Customer does something that is against a company’s ethical or moral values
• Customer not willing to work with company to resolve an ongoing issue
• Customer seems to only want to cause problems and annoy people

As you can tell, most of these issues are very subjective. What is constantly rude to employees? What are the company’s ethical or moral values? It is very hard to tell and firing a customer is usually (and should be) very much a case-by-case basis. Even when to warn the customer (as opposed to “firing” immediately) is very subjective and is hard to judge.

If you determine that it is necessary to fire a customer, here are my suggestions as to how to handle it:

• The situation should be dealt with by an executive (not supervisor, above them – at least manager of some sort, if not an actual executive).
• If possible, the customer should be warned before “firing.”
• The company should consider asking for outside (neutral) advice before acting. Good people to ask are advisors, consultants, and other people who are fairly aware about your business and customer service, and can provide a relatively un-biased opinion.
• The customer should be called and told what is going to happen.
• After the phone call, the customer should immediately be sent an email (and optionally, a letter in the mail) with the information in the section below entitled “The Notice.”

The Notice:
Once the moment comes, here is what the notice should contain. Put some effort into writing it and modify each one accordingly. Once you do one or two, the rest should be fairly easy to do (hopefully you will not need to use it often).

• A statement that their service is being terminated and when that will happen.
• The reasons for “firing” them.
• A statement saying that you had tried all possible solutions, none of which worked. List what was done and the outcome.
• If applicable, a copy of the client’s data, etc.
• A statement about any outstanding bills, charges, etc.
• A way to find an alternative service provider (do not list any specfic companies – it is best to point the customer to some sort of industry listing, review site, resource, etc.).
• An offer to help them move to a new provider.
• An apology that it could not work out and a closing wishing the customer the best of luck in the future.
• A signature and direct contact information of the executive who handled the situation.

While I usually encourage following up with a customer, I do not suggest it in these cases. Do not follow up or contact the customer further after “firing” him or her. I would, however, watch the customer over the next few weeks/months and ensure that they aren’t going around saying bad things about your company. If they do, it is probably best to ask a lawyer and/or an experienced consultant about what to do next.

So there you have it – how to fire a customer. Again, I don’t suggest it, but if you have to do it, might as well do it right. Tomorrow, I am going to write up a sample situation and sample letter and post it here.