One of the most oft-quoted mantras of business, one used liberally by pioneering retailer Marshall Field, is this one: "The customer is always right."
 
But it doesn't always follow that that customer is right for your business.
 
While it's best to weed out those sorts of accounts or relationships before contracts are signed, most IT solution providers have at one time or another faced a crisis when the cost (financial, emotional or otherwise) of keeping a particular client outweighed the revenue that the relationship was generating. So how can you "fire" that customer without damaging your brand or image? Here are three different approaches.
 
1. Find The Customer Another Solution Provider
 
Five years ago, Atrion Networking had almost 660 different clients on its books, generating roughly $30 million in annual revenue. These days, it supports less than half that number, but sales have grown to $100 million.
 
Atrion CEO Tim Hebert attributes those results to an extensive customer profiling exercise undertaken by the organization. Its so-called "A" clients were accounts where the conversations generally focused on the value of Atrion's services; "B" accounts understood Atrion's differentiation, but weren't that heavily engaged; and "C" customers were fixated on price.
 
Armed with that information, Atrion – now a perennial member of the CRN Solution Provider 500 -- redoubled its efforts to build relationships with its most strategic accounts. In addition, it identified about a dozen companies from the "B" list that it felt had the potential to move up to strategic status.
 
The team adopted several different approaches to the rest of its existing customers. For the ones where it had little exposure, it stopped proactively developing the relationships. It took a very different approach with ones where it was doing a high-volume business: "We went in and had a strategic discussion, and we suggested peers that we thought fit them better. We tried to exit on a high road," Hebert said.
 
After those discussions, some of the customers that Atrion was willing to abandon changed their behavior – one is now among the solution provider's top 20 strategic accounts, he said. "By firing the clients that didn’t value us, selecting who we could do business with, we are able to spend more time with the ones who value us."
 
2. Price Yourself Out Of The Market
 
Long before it began investing more heavily in managed services three years ago, HillSouth – a 2013 CRN Next-Gen 250 company – started monitoring the profitability and pulse of all its accounts.
 
Among the sorts of things that would raise a red flag: slow bill payments or abusive verbal treatment of the HillSouth staff. "It means a lot to stand by your employee," said Robby Hill, founder and CEO of the company, located in Florence, S.C. "If the customer can't keep emotions at bay, that is a bad relationship."
 
All of this information is referenced when an account comes due for renewal, and the root causes are discussed. Is it a matter of mismatched personalities that could be resolved by switching personnel? Are there glitches in HillSouth's processes that need to be addressed? When all these things are considered, is the account truly profitable?
 
If not, HillSouth will reconsider the price it charges for those services, building an increase into the account's next renewal. Often, that problematic customer won't be willing to pay the increase, so the issue will resolve itself, Hill sad.
 
"You don't want to 'fire' everyone, you want to sort out the problem and figure out the root cause," he said. "Some accounts are either underpriced or they aren't profitable. It makes sense to politely price yourself out of the market."
 
3. Stand By Your Word
 
Future Tech Enterprise President and CEO Bob Venero said his Holbrook, N.Y., company was forced to sever ties with just one customer, but it was a big one and the situation was particularly delicate because the arrangement involved a handshake. "What we didn't do was formally write up in a contract what the definitions were for a win-win relationship between us and the customer," Venero recalled.
 
The deal in question covered services for a large media company at an especially favorable rate, provided Future Tech – which represents more than 700 product lines -- was the reseller of record for a major portion of its hardware. This arrangement held for slightly more than a year, until Future Tech discovered that the customer had circumvented those terms, Venero said. After the account lead brought this to the customer's attention, the relationship resumed with the proviso that another breach would terminate the relationship.
 
After two more escalations, Future Tech finally pulled its 15 employees off the customer's help desk, living up to its threat while keeping the action objective and professional. Subsequently, it tightened up its contracting policies to ensure that there is mutual benefit in every relationship.
 
"We explained to the customer that we would be forced to end it. You can't always be the one taking the loss," Venero said. "You don't have to knock it out of the park, but you do have to win sometimes."