Best practice: watching your bottom line with unprofitable clients
This session aims to share the conundrum we face with unprofitable clients, do we continue to engage or when and how to disengage them. Sometimes businesses terminate relationships with clients for reasons such as the declining profitability of specific customers, the lower productivity of employees as they deal with unprofitable customers, changes in the capacity to serve large volumes of customers, and shifts in a company’s business strategy. Setting aside the immediate effects of such a strategy on profits and operations, businesses are worried about longer-term ramifications such as retaliation by clients or earning a reputation as a “difficult” service provider or an industry rebel. Indeed, the collateral damage of divestment can be high: You may do your competitors an unintended favor by sending new business their way. You can damage relationships with the high-value customers you retain, who may come to perceive your company as being service-unfriendly. You may even violate ethical or legal obligations to customers.