The Wall Street Journal recently published a column on Walmart’s plans to squeeze more cost concessions out of its already squeezed suppliers to regain its lowest cost position.

I have often said that some sales people want to give away the store. They will do anything to get the order, without regard to what that does to profit. And I have often said that some customers want to steal your store. They would not only prefer that you have very little profit, but they would be happy as clams if you had no profit at all. Walmart is a perfect example of such a customer.

You can’t afford to do business with customers like this. Once you go down the slippery slope of price concessions, they will keep coming back for more and more. And once you start, each successive time they demand a concession it becomes more difficult to say no.

So what to do you do? You fire customers like these. Now I know that is not easy, especially if the customer is the 300 pound gorilla. But if you don’t, eventually you’ll be in a cost position that is untenable-and your volumes will such that you can’t afford to walk away.

Firing the 300 pound gorilla takes guts. And it takes strategic planning.

Here are the 5 steps you must take to make it happen:

  1. Research the market for where you will find the profitable volume (note the word profitable) to replace the gorilla. This is not a quick and easy exercise. Don’t make the mistake of taking the easy way out by ignoring the problem. The easy way out will eventually be the out of business curve way out.
  2. Develop a 5-year plan for onboarding the customers and products you will replace the gorilla with. This is a business imperative so be sure your team takes it seriously. I once had 2 customers that accounted for 95% of my business. They were 300 pound gorillas who squeezed me at every turn. My team and I developed and executed our plan and now these 2 customers account for less than 50%.
  3. And speaking of execution this is the most important part. Tie your team’s compensation and incentive plans to achieving it. Otherwise, they won’t do what’s necessary in favor of what is convenient. Failing to do what is unpopular in favor of what is convenient is the mistake Targetand Radio Shack made resulting in draconian cuts and bankruptcy.
  4. Bring in new sales executive if the one you have won’t go along with the plan. Oftentimes cronyism trumps new thinking. Don’t make the mistake of believing the team that got you into this mess can get you out.
  5. If you’ve never done anything like this before, get an expert who has done it before to help guide you through the process.