Practice Management

Firing unprofitable clients

Hi David,

I had a question I wondered whether you or your blog readers had any opinions on.

Many companies have unprofitable customers. This situation may arise for many reaons including:

* Poor pricing controls - offering large and multiple discounts

* Historic overservicing and undercharging long-term customers

* Lack of understanding of the true cost to serve

Nonetheless, whatever the reason, when companies do find unprofitable customers they need to manage them. They can be made profitable or they can be "fired".

Do you have any ideas or strategies for actually firing customers? Does anyone have any examples of how their companies (or others) have done this and what the results were?

Regards. Daryn, Sydney, Australia

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Well, gang, what say thee?

Full post as published by Passion, People and Principles on October 30, 2007 (boomark / email).