Don’t be afraid to fire a customer

Chad Albrecht, president of Centare, drew some rather inquisitive looks when he told the audience at a recent business luncheon that the most important strategy driving growth at his Brookfield-based software development company is not “putting the customer first,” but instead is “putting employees first.”

Though it may seem counterintuitive, there are times when the customer is not worth the drama, and the customer must be fired, Albrecht said.

“We feel the damage to our team and our company is too great to stay in relationships with abusive clients,” Albrecht said. “By standing behind our team first and foremost, we ensure that our attrition stays low and they each give 110 percent for all of our clients. It then falls to our leadership team to protect this team from abuse. If we allow abuse to continue we are implicitly communicating a lack of respect for our team. This translates into a negative work environment and passive aggressive behavior. Centare is a top brand because of its premium people. They deserve both a top notch workplace and premium clients.”

Albrecht’s proclamation reverberated a few days later when Ad Age magazine reported that it had obtained an internal memo from Cramer-Krasselt Chief Executive Officer Peter Krivkovich announcing to his employees that the Chicago-based ad agency, which has an office in Milwaukee, is dropping its lucrative Panera Bread account.

“There comes a time when no matter what the acclaim for the work, no matter what that visibility, no matter how good of a relationship we have with the marketing department, no matter what the test scores and results that contributed to reversing falling comps before the campaign and that outpaced previous work and became great case histories – despite all that: the constant last-minute shifts in direction, the behind-the-scenes politics, the enormous level of subjectivity that disregards proof of performance – all churn people at a rate that becomes much too much even in this crazy business,” Krivkovich wrote. “And in the end, no amount of money makes it worthwhile.”

Susie Falk, founder and CEO of The Falk Group in Mequon, says she has had to fire a customer or two over the years.

“The Falk Group launched 2008, just before the economy tanked. In the subsequent year, when most businesses were cutting back their marketing budgets, we had two sizable clients with big brand recognition that asked us to continue offering the same level of service we had been, but at deeply discounted fees,” Falk said. “Despite the marquee names on the client roster, at the time, I felt it wasn’t worth the price in terms of wear and tear on the agency. Not knowing when the recession would end, we chose to ‘resign’ both unprofitable accounts, parting company with them to free up staff time so we could focus on new business and offer additional services to our current clients, whose brands were not as recognizable, but who were profitable.”

Economist, consultant and author Kay Plantes said, “Companies make a mistake in adopting a mantra of ‘customer centricity’ to assume all customers matter equally and you must bend over to meet their every need. Yes, all customer promises should be fulfilled; that’s what a trusting brand does. But a lot of promises should never be made. Just like in a functional family, boundaries are important.”

At what point should a customer be fired? Plantes suggests drawing the following lines in the sand:

(1) “When it wants to take your firm in a direction that is neither strategic nor opportunistic for you.”

(2) “When the customer deals with you in a way that is not consistent with your core values. Otherwise, your core values become words only.”

Steve Jagler is executive editor of BizTimes Milwaukee.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display