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Saying goodbye to a customer: how to do it properly

Do you have to break up with a customer now and then? Yes. Should you do so at the first sign of trouble? No. So how do you know when it is appropriate - and what steps to take?

Door Renée Müller

7.1 min read

2 February 2022

Saying goodbye to a customer

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Customer relationships should be a win-win. If they are not, it is time to end them. But that shouldn’t be a quick decision, nor should it happen in an email or text message.

It requires a process. Today we look at when and how to say goodbye to a customer.

When to say goodbye to a customer?

Saying goodbye to a customer starts with two broad areas of analysis. First, you will need to look at the financial and interpersonal perspectives.

  • Financial perspective: does the customer cost more to serve than he brings in in revenue? In almost every industry, there are customers where you lose money by connecting with them, either in terms of product returns or in terms of customer acquisition costs relative to revenue earned. With these customers, it is easy to see that something has to change.</li
  • Interpersonal perspective: Is the customer overloading the team? This second group is trickier, because they can be profitable for your bottom line. But if working with them is a terrible and challenging experience, they can ruin your employee experience – and lead quality employees to look for other work. That’s why it’s best to consider whether it’s worth keeping them.

Having looked at these areas in a wider perspective, it’s time to look at the problem in more detail. Determine the long-term value. Is your customer strategically important?

Bear in mind if it is. Right now, you may not be earning what you hope from them and want to part with a customer, but in the long run, they may be economically valuable.

For example, it might be a well-known brand that speaks highly of you. Or maybe they are very strong in the adoption of new products or services you launch. Customers can contribute to your business in other ways, it’s not always just about your wallet.

This also works the other way around: you need to look closely at whether a company has a bad reputation and whether their association as a customer reflects negatively on you.

That is why it is important to look at the number of resources needed to serve the customer. Of course, some customers need more attention than others, that is normal. But customers shouldn’t create work in the simple parts of your relationship.

Suppose your customer doesn’t pay his bills on time or asks for longer payment terms, then something that is just basic already takes too much energy. Because in that way, it comes down to your business subsidising his.

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Who decides to say goodbye to a customer? 

The decision to say goodbye to a customer varies between departments. They affect the whole organisation, but some feel it worse than others.

Thus, prejudice within your organisation clouds the decision. If you ask sales, nobody ever says goodbye to a customer. That has a negative impact on turnover. The fact that the customer pays his invoices late or calls your customer contact department flat-out does not matter to them.

This means that the decision to say goodbye to a customer needs an independent voice. An external consultant is often a good choice. They take a hard-line perspective that an internal person cannot.

In other words: a consultant can tell you that your child is ugly, Marietje from Marketing cannot.

What are the pitfalls in saying goodbye to a client?

There are a number of them:

  • Not counting all resources involved in account management: It is often surprising how many departments are involved with a customer and the time it takes to serve them. Get it all together and make a list of all the hours spent on the customer each week, from marketing to accounting to contact centre staff. Then calculate what it costs you and put that against the revenue from that customer.
  • Not seeing the signs of your responsibility in the problem: customers become troublesome for many reasons and not just one. Some of this may be because of you. Look closely at when it went wrong. You may have inadvertently contributed to the problem, and you can fix it by changing the operation a little.
  • Not looking at outside influences:another pitfall that can lead you astray in your decision making about customers can come from outside your specific relationship with that customer. For example, you might look at your overall customer satisfaction scores for your organisation in general. Is it just this account, or are all your accounts not responding well? If your customer satisfaction scores are high, find out if those scores are unbiased. In other words, are you getting a falsely high score because of the way you ask or because of the group you ask? </li
  • Deciding to say goodbye before saying goodbye:sometimes you have already ended a relationship before it is official. Unconsciously, you pulled away before the conversation even took place.</li

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Saying goodbye to a customer: 7 tips

You have taken a good look at your customer relationship and have come to the conclusion that there is nothing left to save. It’s time to say goodbye and make your customer the problem of the competition. But how do you do that properly? We have seven steps for you.

Remember that every customer is different

There is no universal approach to say goodbye to a customer. Customers need an individual approach. Moreover, with larger accounts you often deal with more than one person and all those people need a personal approach too.

However, the message must be consistent, regardless of the process. In addition, it is important that you personally explain to the person with whom you have had the most contact why you are saying goodbye.

Frame the situation correctly

Be honest with your client, but discuss the issue in as positive a way as possible. Tell them why it’s no longer working for you and why the relationship is no longer a win-win.

Show where your decision came from and share the approach you took to reach it, including any estimates or figures.

Prepare for an emotional response

It’s never nice to be dumped and it’s probably no different for your client in this matter. It’s no different with saying goodbye to a customer. Make sure you are prepared for an emotional reaction and don’t get carried away.

Apologize and be empathetic

Acknowledge that you have probably made your contact’s job more difficult, or that he/she may face internal backlash as a result of your decision.

Offer to help with the transition

It is best to have suggestions for the next steps. Be prepared to give a timetable for when your customer can switch and what they need to do to switch. Or refer them to a competitor.

Make sure you don’t give your customer an excuse.

Stay in touch

You never know what will happen later. Try to keep the relationship intact as much as possible, because people move on to new jobs and organisations. You may say goodbye to a client now, but your contact may want to work with you at his new employer. That personal bond can remain intact, even if the business relationship is over.

Balance is crucial

How this decision turns out will affect your company and your reputation. Make sure the parting is pleasant and keep the door open for the future.

Moreover, the decision to fire this customer should also show you what kind of customer to avoid in the future. No company can serve every customer, and you need to know what type of customer you are best suited to.

Focus on that type of customer in your future customer strategy sessions. The last thing you want is to endure a repeat of a similar, and equally difficult, customer base.

Give farewell in the right way

There will be times when a customer relationship doesn’t work out and you have to say goodbye. It’s crucial for your company’s reputation that you say goodbye to a customer in the right way.

Start with a good analysis from a financial and interpersonal perspective and go from there.

Are you going to say goodbye to a customer? Then take into account all the factors that contribute to the problem. Do you have to say goodbye to a client from time to time? Yes. Should that be the first thing you do when things get tough? No. There are always other possibilities.

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