Fire That Customer!

Forget everything you’ve heard: “The customer is not always right,” says Robert Bodi, an independent irrigation contractor in Venice who finally got fed up with difficult, nonpaying clients after 30 years in business. In May 2008, he launched BusinessBeware.biz, a website that offers tips and tools for small business owners who are dealing with deadbeat customers.

Taking a page from the Better Business Bureau, Bodi created a site where businesses can share information about their problem customers. “Small business owners should screen customers in the same way that customers screen businesses,” he insists. Bodi and his daughter, Ashley, run the site without seeking payment beyond administrative costs, and they also host the weekly Business Beware Radio Show on WLSS 930 AM.

Business owners are often instructed to treat customers as the ultimate authority. Bodi agrees that customer-oriented philosophy has merit, to a point. Rather than spending valuable time and resources trying to please difficult customers—time you should be spending with your good customers—it might be time to move on. “Fire them,” Bodi says. If you’re spending all your energy on one person who treats you and your employees poorly, he jokes, “Give them your competitor’s phone number.”

Bodi stresses that he does not advocate treating people rudely, and he advises business owners to soul search as well. If all of your customers are rude and irresponsible, he says, it might be time to reflect on how you interact with them.

 

Dealing with deadbeat clients.

Pay attention to accounts receivable. Bad customers try to spend as little as possible for as much as possible, so be on the lookout for customers who are consistently late on payments or skip payments altogether. “Small businesses need that money to pay their own bills,” says Bodi. After sending several late payment notices, consider sending a collection letter from a third party. Some business owners even tell their customers about Business Beware. In many cases the threat of a bad reputation has been enough to make the customer pay up.

Don’t tolerate abusive customers. Customers who consistently bad-mouth your company and verbally abuse your employees will have a dramatic effect on company morale. The easiest way to avoid that is to remain professional and courteous. Bodi does not tolerate bitterness or gossip among his employees, and he remains open to complaints and thoughtful criticisms. He says, however, “When customers personally attack your employees, it is your responsibility to step in and, if necessary, fire that customer. If you don’t do something about that, you’re telling your employees, ‘That customer is more important to me than you are.’”

Cut your losses. Do not continue to service clients who are consistently late on their bills. The cost of losing one bad customer will be outweighed by the benefit of being able to apply your time and resources more effectively elsewhere. You can start by letting the customer know you are not afraid to cut off your business with them. Once customers understand that they, too, can be fired, they tend to show more respect to the businesses they work with.

Visit BusinessBeware.biz. Currently Business Beware has more than 3,500 members nationwide. After registering, you can search for potential clients to see what other companies have said about them. Or, if you already have bad customers, you can download Business Beware’s collection letter, which boasts a success rate of more than 90 percent and is offered without the percentage fees imposed by collection agencies.