Not all relationships work out, and that holds true for the business world as well. Sometimes, a company and its customer aren’t a good fit, and research and advisory firm Gartner projects, based on its research, that by 2025, 75% of companies will “break up” with poor-fit customers as the cost of retaining them eclipses good-fit customer acquisition costs.

Gartner defines breaking up with a poor-fit customer as an organization proactively ending the relationship on their own terms rather than waiting for the customer to bring it to a close.

A knock-on effect of this approach is that companies will need customer break-up strategies. As the break-up mindset exposes certain silos within customer-facing functions, Gartner advises that customer breakup strategies must be developed cross-functionally, and force leaders in sales, marketing, customer service and customer experience to collaboratively execute a common customer-facing strategy.

“Business leaders are starting to recognize how costly keeping a poor-fit customer can be for business, such as over-customization, custom-made solutions and outsize time spent on servicing,” says Neha Ahuja, director, team manager in the Gartner Marketing practice. “Combine that with costs associated with emotional damage that leads to attrition among customer service reps and sellers, which are two talent pools already under pressure. Long-term profit erosion must also be kept top-of-mind, as investments in poor-fit customers may boost revenue in the short run, but compromise profitability in the long run.”

Gartner reports that all functions must agree on a common set of attributes that define a poor-fit customer and then determine how each of those attributes would appear in related functions. Functional leaders must adjust their teams’ processes to deselect poor-fit customers.

For example, customer service and support leaders will need to rethink their routing and queuing processes and ensure reps don’t give preferential treatment to poor-fit customers. Marketing teams will need to adjust their advertising strategies to deliberately deprioritize customers who are not a good long-term fit for the organization, instead of repeatedly marketing to every existing customer.

“Organizations will need a consistent data analysis strategy to capture and align customer data across different silos. This analysis strategy will be critical for predicting poor-fit customers,” says Emily Potosky, senior principal, research, in the Gartner Customer Service & Support practice. “While future potential is critical, organizations cannot overlook how poor-fit customers impact the bottom line in different ways: emotional toll on employees, brand and credibility risks, and misallocation of resources. Once a ‘fit’ measure is established, organizations will need to determine a threshold beyond which to break up with a customer that makes financial sense for the organization.”

Gartner has prepared some recommendations for organizations exploring breaking up with poor-fitting customers so they may align across teams. Among them is the creation of a customer-fit score to inform actions to take with a customer, such as deciding to further grow the relationship, maintain the relationship or break up with the customer. Another is to work closely with the CFO and the CFO’s team to ensure the organization’s ability to adequately grow business with, and acquire, good-fit customers to compensate for the loss of revenue from poor-fit customers.

Gartner also advises organizations to adjust KPIs, including employee incentives, to include customer breakups along with growth targets. Also, communicate the breakup strategy to the board and investors to ensure they understand that any reduction in overall retention is intentional, and done to improve the company’s growth, and revise retention targets to center on the percentage of good-fit customers retained, not overall customers retained.