Should You Ever Fire A Customer?

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Sometimes, you have to fire a customer. When you’re in the business of making customers happy, it’s a very difficult realization to come to. It’s painful, but there is a certain satisfaction in bracing yourself for the decision and being able to say “no.”

At Speechpad, demand for our transcription services is growing faster than during any previous quarter in the company’s history. We’re scaling our workforce as fast as possible, while keeping quality high and prices low. We have a choice about which work to take, and which not to.

Transcription for video is by far the fastest growing segment of our business. It’s what has put Speechpad into hyper-growth mode. People get videos transcribed so that that video can be searchable, indexable, and discoverable. High-speed Internet and the ability to upload hundreds of megs of files, or to share them with us via Dropbox, Google Drive, and other file sharing services has made dealing with large video files a non-issue.

And people love video. It’s one of the most compelling ways to engage  – just look at the excitement around services like Socialcam and Viddy. But to make that video relevant and accessible, it needs to be available in text form. That’s where Speechpad comes in.

In working with one particular customer, we realized we were doing a ton of extra work for the customer and that ultimately we weren’t profitable. We were losing money on the work we were doing for this customer. Although we’re highly focused on revenue growth, as a boot-strapped company, we take profitability very seriously. It’s OK to lose money on a large customer if we’re in the “startup” phase of a new vertical or new service, but at steady state, we should be profitable. We realized that simply wasn’t the case. And the time we were investing in that customer was causing us to spend less time on areas that are bigger and can scale faster.

It was tough deciding to stop working with this customer especially because we could see that other companies were able to meet this customer’s needs. They could do it and we couldn’t. It is a tough, tough reality to face, but an incredibly valuable one. When put in the context of our other opportunities, not doing the unprofitable work and instead focusing on scaling our profitable work made a ton of sense. It was agonizing making the decision. But it was a relief once we made it.

It’s painful, frustrating, and disappointing to fire a customer. But sometimes you’ve got to do it. Ultimately, the customer will be more successful and so will you.

 

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