We’ve also written about this, especially in the context of firing larger customers: [How to Fire a B2B Customer? (Without Causing Bad Will).]
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.