I like the distinction between ‘challenging’ and a bad customer - it’s an important one to keep in mind. The former can be frustrating, but produce growth for you and your company if you meet the challenge.
@robwalling also had something similar a while back:
http://www.softwarebyrob.com/2010/12/09/how-to-detect-a-toxic-customer/
Great post on Groove - I was especially interested in the stats on customer complaints, average spending of happy vs unhappy customers, and typical number of referrals from a happy customer.
Awesome post!
We’ve also written about this, especially in the context of firing larger customers: [How to Fire a B2B Customer? (Without Causing Bad Will).][1]
Especially if your customer relies on your product for a crucial part of their operation, it might be worth the effort to actually support them in the transition to another vendor smoothly.
Also, it makes a difference whether you do this with an apologetic mea culpa, mea culpa attitude, or with friendly strength. Apologize that things didn’t work out, but realize that you don’t depend on their forgiveness, you’re not begging for a pardon. It’s a fine balance, but doing it from a position of friendly strength will make the firing a lot less painful for all parties involved.
[1]: http://blog.close.io/how-to-fire-a-b2b-customer
I think the difference between a challenging and bad customer is whether they will ever become an advocate for your product. For example I have had a few challenging customers who ask for lots of new features, send lot of support emails etc, but they also leave great testimonials on websites without asking and refer other clients.