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When You Should Fire a Client – and How to Do It

A clean break might be your best bet. Learn how to pull it off in this month’s “Ask Signs of the Times.”

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We’d love to know others’ advice about software outside of a spreadsheet for managing projects. What CRM system is out there that handles both the sign and wrap sides, and also has an integrated scheduling system?

These specifics about sign company management software, particularly “both the sign and wrap sides,” call to mind the two-part piece our Shop Operations columnist Dale Salamacha, co-owner of Media 1/Wrap This (Sanford, FL), wrote about partnering with Square Coil (see signsofthetimes.com/112205). Dale’s company has both sign and wrap sides, and once up and running the software, he reported, “we know exactly where we stand in profit, in organization and in our company-wide trackable communication.”

Just about all our costs are rising. What’s the best way to raise our fees so as not to drive customers away?

Don’t apologize. Don’t explain. Just do it, says small business strategist Andrea Hill. “Don’t make an announcement or excuses. If a customer happens to notice and brings it up, be transparent: ‘Yes, our suppliers have increased our prices and we’ve passed along some of that increase.’” Inflation is affecting everyone, and most people understand. “Just avoid doing across-the-board price increases. Be strategic and raise prices only where you need to,” she says. After that, focus on these three areas:

  • Reinforce your brand messaging: who you are, what do you do that makes you different and why you matter.
  • Get creative with product selection. Offer options for all kinds of budgets.
  • Promote products/services with the best margins. Inflation means prices are increasing, but those increases don’t occur evenly across all categories.

When do you fire a customer? And what is the best way to do it?

There’s no mathematical formula to determine when to fire a customer because the decision is not always based on sales and profits. When you can determine you have an unprofitable customer, someone who mostly or only buys your least-profitable products or services, the decision to let go is fairly easy. Often, it’s the time — excessive time required by a customer — that can be the determining factor. Occasionally the personality of the customer, be it overly negative, too demanding, abrasive, semi-abusive or otherwise (see page 46), constitutes that “last straw.” A good way to do it — we won’t claim it’s the best — is to be upfront about ending the business relationship (if not exactly why). Contact the customer with an email that states you feel your business relationship is “no longer a good fit” and that your company “has chosen to focus on other projects more in line with our core business.” Avoid negative words and phrases (unfortunately, I regret to inform you, etc.) and don’t apologize (or use the word “sorry”). Make a clean break and move on. And if you can recommend a sign company — presumably a disliked competitor — you may just be able to hand them off.

Want to see your questions featured in this department? Send your emails to: ask@signsofthetimes.com

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