You Need to Know When to Fire a Customer
When you build a product, you work so hard to attract those first customers. Cracking into a marketplace is difficult, and even when they have one foot in the door, it’s hard to keep them. Figuring out how to attract and retain customers consumes a huge amount of our time in the product world.
That being said, you also need to learn how to fire them.
I can already hear the objections: “Fire them? What about that hard work?”
Well, for your business to accomplish its mission, learning when and how to fire customers is a key skill. The truth is that both the business and its customers change over time. Sometimes, that change means that the partnership between the two has run its course. When this happens, you have a choice. Either you recognize the time has come and help that customer get to where they need to go, or you try to hold on, kicking and screaming.
Let’s eliminate the second option right now. Trying to keep your customers while they are kicking and screaming will leave scars. The effort, like blindly answering and accepting feature requests or requests for proposals (RFPs), to keep them is going to drain both you and your company. The cost is significant, causing companies to lose resources, headspace and may eventually move you away from your mission.
One day, you’ll look up and be unable to recognize your own company. If you’re a mission-focused company, then that type of change is non-negotiable. Keeping customers isn’t worth giving up on your original vision.
To avoid letting this happen, you have to be willing to fire customers. You need to do two things to fire them effectively:
- Identify customers that don’t fit your point of view.
- Send them on their way with some kindness and grace.
As leaders, and especially those of us who are mission-driven, we must be able to identify and part with those customers who no longer serve us well. Not only does doing so enable us to lead with razor focus, but it also helps signal to our colleagues that we are committed to the work itself.
In this article, I want to point out how you can identify customers who aren’t aligned with your mission. I will also address some ways to end the relationship without burning bridges permanently. Although some of these things are counterintuitive, they’re all designed to make sure that you, as a leader, are staying focused on what’s most important to your business.
Identify Customers That Don’t Fit
Earning that first dollar is challenging for a business, and keeping it is even harder. For founders especially, these dollars are an affirmation that your vision is viable, and every customer that you gain feels like a success.
Once you’ve got a sizable customer base, the job turns from just acquiring any customers to acquiring the right customer. I understand that the word right is doing a lot there, so let’s break it down.
The right customer is the one that fits your mission and vision. You solve a problem for them, so they’re willing to pay you for that solution. They’re excited to grow with you. These criteria may seem simple, but they don’t describe every customer that you have. Some are neutral, and some are actually the wrong customers.
Neutral customers aren’t enthusiastic supporters of your brand, but they’re comfortable enough with your service. They tend to slip in and out out of your revenue stream. They may eventually turn into the right customer and discover a passion for your product. Crucially, though, their indifference means that they don’t put pressure on you to change like wrong ones will.
Wrong customers want your company to do one of two things:
- Go backward. The folks who push you in this direction are most likely older customers who joined when you first started. They liked your product in its early stages but don’t like what you’re doing now or where your product is headed. You’ll notice this customer talking about the old days a lot.
- Change your mission. This group is likely to talk to you about everything except what your product is trying to do. Get ready for feature requests that overwhelm your team, tickets for your customer success operators that are far removed from your use cases and plenty of other distractions.
These groups are not mutually exclusive either. The person who wants to go backward can also push your team to go in another new, unnecessary direction too. Either way, the result is bad for your company. Going backward is as bad as spending time trying to accommodate every single request you see, no matter how small. Both strategies will put you out of the game.
Identifying these customers is important so that you can make your offloading process clear. Build a profile of a hypothetical problem customer so that you can identify red flag behaviors. Some things to look out for are improper or inactive feature use or a customer that complains often and contributes little to the bottom line.
You can set up user personae and include one for the problem customer. These personae, once uncovered, should be referenced with the customer experience team (customer success, customer support, support engineers, internal product and design) often to adjust and iterate as the mission changes.
Segmenting your customers will help you get a better handle on how to serve them all.
Helping People Move On
Now you have a good idea of how to identify those customers who don’t align with your vision. Once you’ve determined this, it’s critical that you transition them to someone who will provide a better fit. So, how do you help them move on?
Let’s start with what you shouldn’t do — just dump them. These customers, whether ideal or not, have shown you the respect of paying for your services or products. They put their faith in you, and even if they’re no longer a match for your business, dumping them either explicitly (by just cutting them off) or implicitly (by ignoring them) is a bad idea. Not only is it rude to treat someone this way, but you’re also running the risk of damaging your brand’s reputation.
So, what should you do? First, you need to understand them. Then, you shift those customers to their next place rather than unceremoniously dumping them.
Now that we know who these customers are, it’s worth understanding just how the relationship got to this place. This is counterintuitive because we’re often just focused on engaging with the customers that are the best fit for our product. Nevertheless, we can learn a lot from a disaffected customer.
There is more than likely messaging on your platform or marketing that speaks to the customers that didn’t fit. Asking these customers questions over the phone or by survey like “What confused or frustrated you?” will give you a hint as to what made them think that your product solved their problem. You now know what to remove in order to avoid attracting this type of customer. The data you get from the customer, whether from surveys or phone calls, will also give you some insight into the next step.
The customers have told you what they’re looking for. Now, it’s part of your job to find out where to direct them. There are competitors (yes — your competitors) that may fit their needs better. You may also be able to recommend a solution that won’t charge them. Moving those customers to other places in your niche has two effects.
First, it strengthens your standing in the marketplace by focusing on just the customers that work for you and your business. Second, you can start to divert them before and during the onboarding process to avoid the trouble these customers can cause down the road.
Not all customers are for you, but that doesn’t mean you should abandon them altogether. Pointing customers who no longer fit your brand to a competitor who might makes you a leader in your space and improves your influence, strengthening the overall ecosystem. Don’t downplay the long-term benefits of doing so, either. Your competitor can become your greatest partner as the seas change.
The same goes for moving the customer off of your platform to something free. You’re building trust with that customer that may pay off big time in the future. Even as they’re leaving your service, they’re likely to remain an evangelist for your brand. Plus, getting these customers out of your pipeline frees space for the ones you need to pay attention to.
Fire Customers With Respect
These aren’t one-time actions. Identifying and moving those customers should be a continuous process. Every time you make space for the right customers, you are on the path to growth.
I know it’s hard, as the customers who started with us or the ones we’ve gained along the way are important to us. They trusted us. That being said, it’s worth returning the favor by helping them continue on their journey.