Losing profitable business is never good.  Keeping unprofitable business is seldom a good idea.  Are there times when the best thing you can do for yourself is to terminate a business relationship?  The answer is yes but only after you have exhausted every option to find a win/win outcome to the situation.  Deciding to keep a customer that is actually costing you time and resources is usually an emotional decision that seldom makes economic sense.  How much time are you spending per day/week/month on this contract?  This is often a hidden cost since it is not calculated in the daily cleaning budget but is a true cost.  Not only is the contract costing you in your bottom line but it also can be diverting you from finding more profitable, positive business.  Remember that every moment you spend with a losing account is time that is lost forever.  Following are some of the reasons to terminate a customer:

• You are losing money and have not been able to either successfully renegotiate the contract or find a way of reducing your own internal costs to improve your margins.

• The contract is not connected to any other opportunities that justify your continuing to lose money.

• The customer assumes, oftentimes rightly so, that you can be replaced with someone as cheap or cheaper for the same level of service.

In situations like this, I recommend you make every effort to satisfy them by providing the best service required in the contract.  Spend quality time with them in an effort to understand their needs and motivations.  Make sure they understand that you want their business and are willing to show them your costs for providing the level of service dictated in the contract.  

After every option is exhausted submit a substantial increase with the requisite notice.  That way, you walk away on your terms, not theirs.  The only thing worse than not getting a contract is to keep one that is priced wrong with no remedy in sight.

Your comments and questions are always welcome. I hope to hear from you soon. Until then, keep it clean...

 

Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678.314.2171 or CTCG50@comcast.net.

 


posted on 4/17/2014