Manystartupsbelieve they cant end a customer relationship that is no longer a fit.
That is a mistake.
However, there are circumstances when it is appropriate to consider parting ways.
Anticipate the possibility of problematic customer situations.
All customer relationships change over time.
Look for these warning signs
Be alert to these common situations.
Assess the relationship before it progresses too far.
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There can be many reasons a customer doesnt pay on time.
The customer may be having cashflow issues.
The first step is to talk to the customer to find out who is holding up payment and why.
Can you negotiate a payment plan that is equitable to both?
Specify payment terms in contracts with discounts or up-charges for early and late pay, respectively.
Make it a practice to clearly define expectations up front.
Create checkpoints, especially in business-to-business (B2B) projects and sales.
At the first sign of mission-creep or disconnect between expectations and agreements, call a pause.
Dont wait until the invoice has been presented to have a discussion.
Everyone benefits from high standards; no one benefits from moved goalposts or unachievable targets.
The customer repeatedly demands a lower price
Successful advanced technology business models are built on value-add.
Even if that is good for their business, it isnt good for yours.
Make a repeatable process part of the customer management process.
Let them vent for as long as it takes.
Then ask each person to say one positive thing about doing business with this customer.
If no one has anything good to say, the relationship may have reached the breaking point.
The discussion may help the group look at the situation differently and apply lessons learned.
What would it take to repair the relationship?
Is the problem with one or two individuals or across the board?
Does either the team or the terms need to be changed?
Would revisiting expectations with the customer help?
Is the situation a one-off or is it chronic?
What are the pros and cons of keeping the customer versus exiting the relationship?
Delegate a team member to meet with the customer
Listen to their perspective.
See if theyll listen to yours.
Are they amenable to tuning the relationship?
Depending on the outcome of the discussion, adjust the action plan and implement.
Ask if the team can bear the consequences of terminating the relationship
Its very difficult to lose a customer.
The company will have to adjust expenses or increase revenue from other sources.
These situations demand swift action.
This includes interactions (in person or online) with customers, suppliers, consultants, etc.
This one is simple.
Do not do business with any firm or individual who is breaking the law.
Dont look the other way.
Seek legal counsel immediately.
This article was originally published by Tom Walker onBuilt In.
you might find ithere.
