Imperative of termination management: Stay friendly and keep cool   

In practice, companies must face the fundamental question of how they should deal with customers who destroy company ­value instead of creating it. At this point at the latest, the termination of a customer relationship becomes a component of comprehensive customer relationship management. The objective of successful termination management is primarily the maximi­zation of the profitability of the company’s own clientele. ­Ultimately, this means carrying on classic portfolio management. But the assets in the portfolio here are not real estate properties, products, or securities, but customers – i.e., human beings. So one must keep in mind that the termina­tion of customer ­relationships can easily result in negative side effects, namely, angry customers who in turn negatively affect their surroundings and other (profitable) customers, possibly even convincing them to change providers. In the long run, this would undermine the benefits of the portfolio clean-up as ­originally planned.   

However, the termination of customer relationships must be seen much more as an opportunity to master successfully a ­delicate customer situation and to turn it into advantages in terms of economics, communications, and, ultimately, competition. In this context, the feedback loop of termination management represents the ideal basis for implementation of the portfolio management as appropriate for customers. The termination management examined in the study also clearly shows that the quality of the communication – especially the components “friendliness and active listening” – is what distinguishes an outstanding provider. Yet another finding is that the more objectively the termination is handled, the more favorable the later attitude of the (former) customer towards the company will be. So this is the most important starting point for providers so that the profitability advantage, especially that of positioning, is obtained from the termination of customer relationships.

In view of this background, the overriding idea for successful termination management by providers can be summed up as follows: stay friendly and keep cool!