Insomnia: November 2004

Community Comments

When to Fire a Customer; Finding Pleasure in Leisure

By Georgene Waterman

Question: I'm the president of a small manufacturing firm headquartered in Rancho Cordova. My father founded the company in 1968 and I took over as president two years ago. My father remains as chairman of the board but is inactive in the business. The company has had approximately 30 employees for the entire time it has been in existence and averages $13 million in revenue. This is what keeps me up at night:
     My issue is with one of our long-time customers. He was one of my father's first and has remained a customer for more than 36 years. He and my father are personal friends who spend time golfing together and going on short vacations. The company spends at least three times more hours taking care of this customer's needs than those of any of our other customers. His products are no longer profitable for us to manufacture and his staff is continually rude to my employees. How do I fire this customer and not hurt the relationship he has with my father?

     Shut eye reply… Many second-generation presidents face your problem. When your father started the company, as with all new companies, he took any customer who would give him an order. As the company grew, he kept those customers and got new ones. However, at the time your father started the business, it was not common for companies to do strategic planning.
     Today, companies are much more proactive in determining whichcustomers they should and shouldn'thave and then putting together a plan to fire those that don't fit their criteria.But rest assured, there is a way to fire this customer and not hurt the relationship he has with your father.
     First, your company needs to develop criteria for "perfect customers." This shouldn't just be the amount of revenue, but such things as their demand for certain specifications, how they plan to pay, their company values, which departments within your companywill be serving them, the profitability ofthe business, whether you presently havethe talent, knowledge and skills to servethe clients' needs, and so on.
Continued...

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