In terms of economics, the benefits result from the increase in the profitability of the customer portfolio. First of all, the portfolio is cleared of customers with low customer value. Practice shows that a “loyal” customer with average price willingness is occasionally quite a “cost-intensive” customer as well and that his positive word-of-mouth communication – as a ­compensatory counter-argument for the low customer value – is frequently overrated. The concentration of resources on the most profit­able customer relationships produces a positive effect on ­return on capital (ROA). Moreover, practice shows that ­customer ­fluctuation also declines because the resources for customer care are utilized more specifically.    

Second, customer relationships with negative customer value ­often have a short-term skimming potential. This happens when the customer still owes the provider a balance payment. In this case, it is profitable for the provider to start the termination process in a customer-friendly and professional manner because this step increases the probability of the payment of the balance.    

Successful termination management is also rewarding from a communicative view. Customers who were satisfied with the termination process have a more positive attitude towards the company. This can act as a preventive to negative word of mouth and even increases the probability that the customer will recommend the company because of his positive experience.   

Finally, it is a sign of organizational maturity for a provider when he is capable of actively and successfully ending customer relationships. This higher level of maturity gives the company a competitive edge over its competitors in its positioning as relationship leader. The benefits of relationship leadership turn up in the form of positive effects in the competition for winning new customers.

But the first step to maximizing the economic, communicative, and competitive benefits from each termination is careful analysis and planning.     

Core Question 2: What do analysis and planning of a fair termination look like? One of the first conditions for the successful termination of a customer relationship is understanding the reaction of the ­customer when the provider terminates the relationship. This is achieved by analyzing the customer’s perception and expectations ahead of time.