DEAR CUSTOMER: YOU’RE FIRED
Sep 1, 2002 12:00 PM,
RICHARD ENSMAN
YOU’VE HAD IT. YOUR CLIENT’S PAYMENT IS late — again — and, to top things off, two days ago he stopped by to complain about the last job you completed and ask for free service (all in the same breath). “If it weren’t for the money I made from this client last year,” you mutter to yourself, “I’d drop him in a minute.”
But would you? Under what circumstances would you decide to fire a customer or client?
In this age of high customer expectations, some of your customers may feel that it’s perfectly acceptable to push you as far to the wall as possible. Drawn-out payments, requests for custom work, and demands for extra service may be part and parcel of the way they do business.
Your relationship with any customer is valuable just to the extent that your mutual needs are met. The only way you can decide whether to keep a customer is to rigorously analyze what you’re getting out of the relationship. If you’re working with a customer whose behavior, business practices, or payment history is questionable, assess the relationship with a brief quiz (see “Pop Quiz”).
Each statement in the quiz describes an instance of negative behavior. If the customer exhibits the behavior frequently, assign him or her a score in the left column. If the client exhibits the behavior some of the time, select the rating in the middle. Customers who exhibit the behavior occasionally rate the score on the right.
Total the scores; if your total is between 49 and 72, your customer poses serious problems to you. Only you can determine whether you should keep or fire the customer, of course. But if you continue to do business with the customer, be aware that you’re putting your time, priorities, money, and well-being at risk. If the total score ranges between 24 and 48, you have a problem, as well. If business is good and your instinct tells you that this customer isn’t contributing much to your bottom line, you might forge ahead and drop him or her. Alternatively, you may want to adopt a more forceful posture with the customer or impose higher prices and financial sanctions for your trouble. If the total score ranks below 24, you might want to make an attempt to salvage your customer. A stern, face-to-face meeting and tough, no-nonsense policies might turn this troublesome customer into one you can live with.
Your business judgement and experience must guide you in your decisions about customers. Only you can blend objective analysis with your gut feelings about a particularly troublesome customer, and only you can decide if — or when — you should fire the customer.
WE CAN WORK IT OUT
You don’t always have to drop a customer to make things right, however. Sometimes all it takes is careful planning and communication. Here are a few tips to help you work things out with customers worth saving.
Institute policies
These policies should cover issues that vitally concern you. For example, steep fines for bad checks or limits on the number of postsale services you provide might signal your limits to the customer or, at the very least, compensate you for the hassle you face dealing with problems the customer causes.
Let your customers evaluate you
An annual evaluation allows your customers or clients to assess your products and services periodically. It offers you a systematic way to identify the changing expectations of your customers and gives you a forum for discussing potential problems with them.
Charge a premium
If you offer products or services with variable rates, don’t hesitate to quote problem customers a higher fee. Alternatively, add costs for consultation, training, and unusual services they demand.
Limit complaint time
You should be willing to address complaints from any customer, at any time. But by asking customers to notify you of problems within a set time period — say, 72 hours — you have an objective basis for denying some services to problem customers if you wish to do so.
Ask for deposits
Insist on deposits from customers who have a habit of paying late or writing bad checks.
Redirect customers
When you can’t solve a customer’s problem or feel the customer is unreasonable, politely let the offending individual know of other vendors who may be better able to meet his or her needs. For the customer’s own good, suggest he or she shop around.
Make proposals specific
Before providing a customer with goods or services, spell out your mutual responsibilities to a fault. Stick to those terms.
Don’t personalize
No matter how angry you feel, remain calm, cool, and professional whenever you speak with a problem customer. Your ability to address the issue with poise and detachment is a sign of your business skill. From the customer’s standpoint, your courteous insistence on fairness and integrity is a sure signal that you mean business.
Never believe that you must work with a client or customer who puts your business’s well-being at risk and never be afraid to take action about that customer when the time is right. Don’t worry about losing the scant profit a troublesome customer offers you; once you shift time and resources from your problem account to other customers with long-term potential, you may well recoup that profit many times over.
Richard Ensman Jr.’s columns appear in hundreds of trade publications throughout North America. He is based in Rochester, New York.
