[patman81]

Once you decide to "fire a customer", it may not be easy to get thru that process. It can be tricky if the cancellation started on the side of the software provider.

We run an enterprise saas business and at one point decided we can't work with a particular customer anymore. We informed the customer that we will terminate his service and cancel all his outstanding (unpaid) invoices.

Soon after that, the customer started to take legal action against our company. It was quite an ordeal for about 12 months. At least it helped us improve our contracts and legal processes going forward.

However, since than we are careful to vet new potential customers before we offer our software. If we feel the software isn't a good fit, we will tell the customer and work thru our concerns before signing a contract. Even if we may lose some potential customers in the process, it builds a more healthy and sustainable business.

"Avoid toxic customers." Is now part of our handbook.

[csydas]

This works if your business model allows you to be selective, but for many companies (big and small) you don't get to choose your customers. Even worse, a lot of times it's not fully bad customers, it's a bad customer attached to an otherwise benign entity that refuses to acknowledge the behavior of the bad customer.

This is exacerbated for big businesses because typically the sales team and the product team are not working directly together except for POCs, and the discussions that a Sales team has and a Product Team has are very different. It's not even about technical competency most of the time from the Sales Team (my experience is they usually know just about what they should for the role, and smart Sales folk know when to stop and ask instead of making promises they can't keep), but rather that typically who the Sales team talks with is not the bad customer, but higher decision makers who just get a generalized feedback from the actual bad customer within their company. The nit-picky and vicious activities are abstracted out into some more generalized and calmer statements when delivered to decision-makers/Sales, and it can be very difficult to get any traction on such bad customers.

I deal with these situations exclusively and it's time consuming and exhausting. Cheap legal threats aren't even the worst part (fun trick when you get a compensation request, just ask for detailed documentation on how they arrived at such a number; most times this is enough to shut down such requests as the number is just something they've pulled out of the air because "it sounded good" during a meeting), but instead that most of the time what you're dealing with "family problems" from these customers, and these are problems they just don't want to deal with personally.

Business is weird.