Firing A Government Contract Customer?

Boy, this is a tough one.  Sometimes, you’re just better off telling a customer that you don’t want them to be a customer anymore.  Blasphemy, many would say.  It’s hard to get government customers.  When you have them, you don’t want to lose them.

In selling to government, seldom do you need to fire a customer because they don’t pay their bills.  They always pay (although quite often, very slowly).  But, sometimes they’re more trouble that they’re worth. 

I inherited a customer once who had been particularly demanding.  They had their own way of doing things, and wanted us to conform to that way – even if our standard approaches were working elsewhere quite well, thank-you.  We suffered through several years of trying to make them happy, never really successful at it while expending significant resources.  I decided it was time to cut them loose.  This was no easy thing, quite controversial in a company that had just been sold and had never fired a customer before.

So, I hopped a plane to fly across the country to deliver the news first-hand.  (This is not the type of conversation to have on the telephone.)  I had in hand a proposal to make it easy for them to make the transition.  We would give them time to find another solution, but we didn’t want them as a customer anymore.  I explained, as carefully as possible, that while we had utmost confidence in our offerings, we just were not capable of serving them the specific way they wanted to be served.

What I thought would be an uncomfortable meeting turned into a rather pleasant discussion.  They told me they were going to place the service we provided out to bid soon anyway.  They would entertain our different approach, admitted they had some responsibility in the matter, and strongly encouraged us to respond to the request for proposal.  I left, telling them I would re-consider.  I flew back across the country, met with our production/technical people, then decided that perhaps I had been a bit hasty.  We would rescind the cancellation and respond to the RFP. 

The moral of the story, you may be thinking, is to be forthcoming and things will work out.  While being forthcoming is always rule number one, that’s not the moral of this particular story.  You see, there’s more.  As we scampered to respond to the RFP and do our best to continue to keep them happy, a problem occurred one day when they tried to use our service in a very visible situation.  It didn’t work.  The news media caught wind of it, and the same people in that meeting who so badly wanted us to respond to their RFP threw us under the bus…very clearly and very publically.  Ouch!  (Our competitors loved it.  They spread the news clippings all over the land.) 

So, the moral of this story is sometimes it really is better to walk away, despite temptations to hold tight. 

Now, at a later time, I’ll tell the story of how this same situation could have been handled much better from the very beginning…saving several years of hassles for both the company and the customer.

All the best,



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