I recently had a chat with one of biggest studios in the SOOMLA community about a project that he had to walk away from half way through. The project was a fixed fee one and by doing so he knew that all the effort his studio already spent on the project will go unpaid. On the other side, some customers are just not worth it. Here is a list of 5 customers you should not deal with (by Inc.com) http://www.inc.com/steve-cody/5-customers-you-should-fire.html.
Sending customers when doing a big pivot
Firing a customer is a very hard thing to do. In one of my previous companies, EyeView we had to do a major pivot and take the company to a completely new market. The company had more than 50 customers generating about $1M in annual revenues but also a comparable amount of headache for the company. This is the kind of noise you can’t deal with when you want to be agile and nimble again. Each customer requires support, billing and more product features. Keeping them would mean that we would never have been able to move on. Obvious as it sounds – when you are facing the unknown it’s a very hard decision to make.
Typical reactions by customers
One of the interesting things about this process is that it sometimes reveals the true identity of your customers. There are a few interesting types that I spotted:
- The Negotiator – this type just thinks you are bluffing to get him pay more – it makes you realize how generous your pricing has been.
- The Lawyer – this is by far the most annoying kind – this customer will threaten to sue you and act very aggressively about the situation.
- The “Who are you” customer – some customers already forgot they are paying you or why they do it – mostly this happens in bigger organizations and especially if people changed roles.
- The “Revolving Door” customer – this kind wants to stay in touch and learn about your new direction and evaluate your new product.
You will never regret letting a customer go
A wise man once told me: “you only regret the things you never did”. This can’t be more true than in the situation of letting a customer go. If you already came to a situation where you are considering this move, it’s probably the right one. Like any big decision, you will have a lot of second thoughts before doing it but once you will complete the process you will not look back in regret. That never happens.