I Fired A Customer This Week

Like any sales/business professional, our customers are very dear to us.  We spend a lot of time prospecting to find them.  We work to identify how we can help them solve their problems, grow, address new opportunities, or improve.  We try to create great value, and, in turn develop highly profitable relationships.

But every once in a while, those relationships may no longer make sense.  Something that may have been great in the past, just no longer works.  There comes a time to part ways.

It’s tough to recognize this.  Momentum and pride may tend to blind us, it certainly has blinded me in this situation.

We’ve had the relationship for years.  It started great, we were aligned.  Our company was helping them, having a great impact. But as time went on, I noticed some things.  Each piece of business became harder, they started taking us for granted.  We continued to produce great results, but somehow they didn’t seem to value it.  Maybe we weren’t doing the right job of reminding them of the value we created, maybe they just didn’t give us credit where they should have.

Things came to a head over the past couple of weeks.  They had a critical initiative, they really needed our help, it was right within our wheelhouse–and they recognized it.  We quickly identified the outcomes and the impact on their business.  We identified the consequences of not going forward with the project.  We were agreed on the importance and impact.  We developed a plan, presented a proposal and a price.

The customer agreed—-well sort of—-well really not (at least in the wisdom that hindsight provides).  The customer agreed, started scheduling people and resources.  But started to make some changes.  Could we reduce the price, could we change the scope, could we do more at the same price.  As much as I reminded them about the business outcomes and the inability to achieve them without our help–which the readily agreed to, it kept coming back to price.  One thing I’m absolutely stubborn on is price.  I know we create great value and I won’t discount it.  I will change scope to hit a price, but I won’t discount.

I noticed things were just not “feeling right.”  I was spending too much time thinking about the problems with this deal—you know the stuff that lurks in the back of your mind while you are doing other stuff.  I started thinking about, “If we are having so much time aligning now, what’s it going to be like when we are actually delivering?  How will we meet their ever changing expectations.”

The more I thought about it, I reflected on what we’d done over the past year.  The projects we’d engaged in were more difficult, not in big ways, but in lots of small ways.  The sheer momentum of moving forward, deal by deal, project by project, had blinded us to an eroding relationship, our value creation being taken for granted.  I realized over the past year, we’d been “muscling” our way through projects.

It finally came to a head with this project, but it was a difficult decision.  We’d come to a tacit agreement on price/deliverables.  The good news was we were going to get the contract.  The bad news was we were going to get the contract.

In the middle of a sleepless night, it finally came to me.  This just wasn’t working.  Yes, we could continue getting revenue.  We could muscle our way through projects.  We could create great value–in fact to some degree, this project had to do with their future survival.  But for whatever reasons, they really didn’t value it.  Maybe we weren’t communicating it correctly, maybe they didn’t really understand their situations, maybe they didn’t buy into the value.  Undoubtedly, there were errors on both sides.

But in the middle of a sleepless night, it came to me.  We couldn’t change it.  We were where we were.  Yes, we could get revenue, but it wasn’t rewarding–to us, or to the customer–since they didn’t value it.  But more than the hours we put in on the project, the sheer hassle factor, the mental baggage was distracting us from more important things.  I got up in the middle of the night, drafted an email to the customer.  I expressed my concern over our lack of alignment and whether we could really achieve what we were trying to do.  I ended by declining the business.  The customer was gracious.  The decision-maker expressed some relief, saying he was uncomfortable with the way things were going as well.

It’s tough to do this.  We sometimes get blinded by revenue.  We lose track of things, getting caught up in sheer momentum of the day to day relationship and doing things.  Our egos and pride blind us–we can fix anything, we don’t want to recognize that sometimes things just grow apart.  Perhaps through no fault on anyone’s part, but just differing directions and priorities.  It’s hard to recognize “they really need help, but we’re not the right people to help them.”

Recognizing this, mustering up the courage to fire the customer was tough.  But now a few days later, it’s been tremendously freeing.  I hadn’t realized how much and how long this situation had been weighing on me.  Perhaps it had been building for months, just brought to a head with this latest deal.  It had been distracting me from other things, other customers, other opportunities.  Not in big ways, but in insidious little ways, which in aggregate became huge.  It’s as though a weight has been lifted off all of us involved in supporting this customer.  In just a few days, I see myself and our people focusing on the right things.  In just a few days, we’ve recovered the anticipated lost revenue for the next 18 months.

We’re not alone in this problem.  It’s not a problem just for people in the services business, it happens to all of us.  Sometimes the best thing we can do for ourselves and our customer is to fire them.