Divesting or Losing Customers
Divesting customers based on
- customer not profitable to you
- customer is a slow payer
- customer is hard to handle, ie unduly rude, obnoxious and/or troublesome
- your capacity constraints, such as lacking expertise, physical capacity or financial resources to provide a particular service; underestimating consumer demand or the impact of the regulations, etc
- changed strategies, eg decide not to provide certain products and services
- unable to manage customer's expectation
Risks in divesting include
- other customers' business unable to cover your costs of losing a customer
- loss of a valuable source of information, experimentation and innovation
- a competitor could benefit from this customer's change of loyalty
- not understanding links between the divested customer and your other customers, eg organisations may have common stakeholders, such as directors/ shareholders/managers, with one of your other customers
(source: Vikas Mittal, 2008)