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Trade Show Marketing

Firing Clients?... Something To Think About!


Letter from Robert Clark, 616-396-4157, Clark Specialty Products, Holland, MI, in response to the subject article. Roger provides mechanical engineering services but, more importantly, has a beautiful home-based business developing, manufacturing (through contract shops) and selling (through catalogers), a growing line of renovation products for British MG cars.


Re Jim Lynn's column on "firing clients" in the December TEN, it reminded me of a client I have who perhaps deserved to be fired back in '92 - but I took a different approach.

I'd suggest that, except in the rarest of situations, a client should never be fired. Instead, change the rules of the game and let your client fire himself if he chooses. After all, to be taken advantage of more then a little, you have to cooperate - so stop cooperating and tilt the playing field in your favor. I dug up the following letter which describes my predicament. (I cooperated far too long.)

Dear Frank:

Thank you for the order you faxed me March 10 outlining battery bin requirements through August. I am delighted that they have been a popular item with MG owners, and I am also delighted that you have made a successful addition to you company's product line.

But, Frank, I'm not getting paid for them. I show seven invoices overdue dating as far back as September '91. I have always been generous regarding the long time your company has taken to pay bills, but that time has only gotten longer. Accounts payable has given me several ETA's but the promises go unmet. As a small business, Frank, the $4,663.15 these overdue invoices total have a much-felt impact. I am appealing to you for help.

Of necessity, I have made it a policy of COD to anyone with payables aged 60 days or more. Please do what you can for me, Frank, and also let me know what you want to do with this month's order.

Sincerely,

I was careful to be as tactful and facesaving as possible in the letter, while still making myself quite clear. And while I could not force payment on the overdue invoices, it made good business sense to continue selling the product to the company - as long as the payment was upfront. I feel it certainly didn't make sense to try to recover six months' of invoices by holding a single order and/or future orders for ransom.

The result was that the company slowly made good on the overdue invoices, and we are on COD basic to this day. In fact, because of the COD basis, I get paid faster from this company than from any of my other customers. (Isn't this great irony!?)

If I had fired this customer, I think I may never have been paid for the past due invoices, but that amount is really negligible compared to the money made since that time by keeping the customer. We now sell 15 products to this company instead of just one.


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