Firing Bad Customers is Good For Business

By Karen Vujnovic, Manta Staff Writer - December 4, 2015

Firing Bad Customers is Good For Business

Customers are the life force behind every small business. You try to make every relationship work out, some simply won’t.


Some customers are toxic and can do more harm than good by draining your energy, as well as your money.

So, how do you differentiate between a bad egg and someone having one bad day? Consistently bad behavior.

If you notice any of the following on a regular basis, you may want to bid your client adieu or figure out a different approach to get what you need from them.

  1. Slow payers. Folks who don’t pay on time, or expect work completed while they run up a tab, can create cash flow problems for small businesses. “For the slow payer, maybe you don’t need to fire them, maybe you just need to change the payment terms, like a credit card and deposit before any work is done,” suggested Anne Kleinman, president of Ad Infinitum.
  2. Small return. If they demand a lot and spend very little, it’s probably draining you of cash and time, and should cause you to reconsider the relationship. “It is likely that 20% of your customers produce 80% of your revenues,” said Jennifer Martin, owner of Zest Business Consulting. “You may also find that 20% of your customers take up 80% of your time and resources. And worse yet, these resource consumers might not be the customers who actually make you money.”

“Most businesses do everything they can to make every one of their customers happy. If this is your approach, listen up: This may be the most costly mistake that you are making in your business,” she warned.

  1. No moral compass. If someone expects you to do or contribute to something you see as unethical, cut ties. Nothing that would keep you up at night is worth a customer.
  2. They’re disrespectful or unreasonable with requests. Allowing your team to be treated unprofessionally or in a condescending manner will create tension between you and employees, which could ultimately cause you to lose good team members. “Smart businesses understand that employees come first, always,” explained Mitch Goldstone, CEO of “They are the fuel that propels the company and they must be confident that the owners have their back. One bad customer can suck the oxygen out of the entire business.”
  3. Complaining constantly. The nitpicky, never satisfied types who, no matter what hoop you jump through, will never be satisfied with the work, the price, the product or the weather—and who make you crazy every time you have to deal with them—that’s a good sign it’s time to let them go.

Here’s how to break up with bad customers:

  1. It’s not them, it’s you. Break up in the nicest way possible, and offer suggestions of other companies that may be a better fit based on whatever their needs are. “When I come across a customer that I do not want to do business with I let them know that I care about the success of their company even if that means not using my answering services,” said small-business owner Emily LaRusch of Back Office Betties. “I generally will suggest two or three alternate companies and share why I think they may be a better fit to meet their needs.”
  2. Don’t turn on a dime. If you’re in the middle of a project, continue through to end and find the right time to make a clean break. “Never ever leave the client midway. Discuss the commitments which you will still honor and give the client time to find someone who can step into your shoes,” suggested Satya Kathooria co-founder of Kays Harbor Technologies. “Be open and supportive to the transition and finally end the relationship on a positive note. Remember, it’s not the parting that hurts, it’s the experience you will provide during transition that will make the ending good or bad.”

Now, all this talk of firing doesn’t mean it’s always the way to go, but it should be something that is strongly considered when you feel that you or your staff are being taken advantage of. If you’ve given the client a chance to change behavior, but don’t see that progress is being achieved, then usher them out as gently as possible and without burning a bridge.

As challenging as firing a customer can be, remember that everyone has limited time, limited budgets and limited energy. And without trying to sound too much like an ancient proverb, with every customer you release, another will fill its place.