Today we’re talking about getting rid of bad customers. As the year wraps up, it’s a good time to get rid of customers who are just not worth it. Obviously, we want to retain customers but some drag on the business and aren’t worth the trouble. Here’s the most common situations:
1. Low margin customers
Some of your early customers may be on steep discounts, with low or even negative margins. Let them know the price is going up in January and they can churn if needed.
2. Legacy products
As your product evolves, supporting older versions gets more challenging. Tell legacy customers it’s time to upgrade or leave.
3. Difficult people
This is the hardest one to judge. Usually, if a customer is paying we try to keep them happy. But if a customer is overly demanding, damaging team morale, or consuming excessive resources they may need to be let go. It’s rare but it does happen.
Best of luck out there.
Sterling Road invests in idea stage and pre-seed B2B startups based in the US, Canada and UK.
