Erika Jones, CFO, CCTAProfit First Professionals · Certified Fractional CFO and Profit First Professional

Under The Covers- Firing Your Customers

15 Jun 2020 · 0 min

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In this segment of the "Under The Covers" series, the hosts discuss the Pumpkin Plan principle of "firing" customers. Speaker B explains that some customers, despite a business’s best efforts, remain unsatisfied and impose an emotional toll on the owner, diverting attention from the best clients. These customers are often not bad people but simply a poor fit, forcing the business to stay a generalist rather than specialize. The conversation emphasizes that removing such misfit customers—though initially painful due to short‑term revenue loss—is a courageous, strategic move that enables the company to focus on its core strength, become more specialized, and achieve greater long‑term gains.

So let's see what we've got today. If it's garbage or good, what's the question?
So in Pumpkin Plan, you talk about firing customers. Why would I fire a customer?
You have some customers you want to fire. You run a small business yourself. There are some customers that we cannot satisfy. Like no matter what quality work you provide, how focused you are on serving them, they can never be happy. Those customers have an emotional toll to them. Right. We just worry about them and get frustrated and it detracts from serving our best customers. But the other thing too is sometimes customers aren't bad people, they're just a bad fit. And it dilutes our company's ability to become exceptional at one thing. So if you service a large mix of customers with different needs, you you'll be forced to be a generalist. So we need to fire or remove customers that are a bad fit over time. So we become more and more specialized and more and more effective at our one thing. It's probably the most courageous thing a business needs to do is get rid of a customer. Because I know the immediate loss of revenue feels devastating, but the long term gains, so gains. So thank you. You would have blessed my chest. The long term gains so far outstrip the short loss. The that you should fire unfit customers. All right, back under the covers, which is so creepy.