Rooting out the Bad Customers

“On a very, very small number of occasions in my various service roles over the years, I’ve asked customers to leave the establishment because they were incorrigibly belligerent, hostile and abusive, and flat-out refused to accept any attempt to satisfy them. In these cases, the people were shopping for a fight rather than a commodity.” – Reddit.com

The advice to root out bad customers would seem shocking at first. However, as a business owner you would know that quite a large portion of your customer base consists of ‘bad customers’ – that is those customers who are not profitable but yet take up vital resources. The reason why most businesses ‘hold on’ to even the bad customers is because, of mind-sets such as ‘the customer is always right’, ‘it is tough to acquire new customers’ and other such pre-set notions.  Making a decision that involves giving up a small portion of the revenue could be nerve wracking and raise a number of doubts. However, making the decision to root out bad customers is essential since it allows your business to use its resources on the good and great customers.

In a business, it would be unfeasible and highly imprudent to satisfy and please all of them – there will always be some that will find fault with everything you do, spend little and yet take up more time and resources from your company than others.  It is important to figure out who these bad customers are and let go of them, albeit respectfully. This would naturally mean that your business ascertains the good and great customers and uses them as a benchmark to see which customers do not measure up. Such customers only serve to weigh the business down, and because you would spend a lot of time trying to please them, you could potentially lose the ones who actually add to your revenue. Root out the bad customers before the good ones leave you.

We have discussed earlier, that not all customers are equal – some are good for a business, while others are simply a burden. The second kind – the bad customers – is unfair, seeks out ways to exploit your business, and yet would continually complain about a variety of things. They are the ones who would be rude and abrasive with your employees and if your staff do not see you taking action, they would become frustrated and disengaged – soon you would have the problem of high employee attrition. In order to keep your business running well, ensure the happiness of your customers and satisfaction of your employees, it would be essential to identify and root out those who qualify as bad customers.

A business rule states that companies should make an assessment of their customers each year to assess and let go of the bad customers – which is usually about 10% of the customer base. By doing so, not only will you free up vital resources to serve the great customers well but would also be able to use your time and effort to acquire better ones. Ignoring the reality of bad customers will cost you money, resources, depreciate your employee morale, and negatively affect your relationships with the better customers. Data reveals that for most businesses, only 20% of their customers account for at least 80% of their business. It would be beneficial therefore to root out the 10% bad customers and focus on the top 20%.  Has your company been able to identify its bad customers? There are ways to ascertain and narrow down who the unprofitable customers are for a business.

Customers would classify as bad or poor if they have a tendency to contact you with a frequency that is higher than usual. They do so in an attempt to constantly gain attention and in the bargain eat up too much time of your service staff, often connecting only to complain and find fault. It would be best to let go of such bad customers. Sure, not only customers that contact your company with issues or requests are bad. The ones who contact your company because they could not make the effort to go through the company website, read through the terms and conditions and or FAQs, to answers for simple questions – they are the ones who refuse to expend any effort and deserve to be categorized as bad customers.

When looking to expand your customer base, remember the cost of customer acquisition. Ensure that you stay away from customers who have a reputation of switching vendors regularly, even for small differences in price – such customers are unlikely to be loyal and will surely leave you as soon as they believe they have a better deal elsewhere. These are bad customers – you spend a large amount of resources trying to acquire them, serve them, and before you start to gain from the association, they are gone.

We cannot emphasize enough, the importance of listening to your employees and caring for them. They are the ones that would be at the receiving end of poor behaviour from customers and it is vital that your business listens to their gripes. If there are regular complaints from a number of your employees about a particular customer, it would be your duty to believe them, analyse the situation and it would not be long before you discover that they would classify as a bad customer. In addition, to constantly harassing your employees, some customers would also be highly disrespectful to your staff, resorting even to rude and abusive language. Such customers are without a doubt, bad customers and must be let go of immediately. An ill-mannered person does not deserve anyone’s time and attention.

You put in a great deal of effort and resources to serve your customers well. Despite this, there would be some customers who never pay on time, postpone payments with irrelevant excuses, avoid contact, and make your company spend even more time and resources just to get what is rightfully yours. Sometimes customers could have a genuine reason for a delayed payment – but the regular defaulters are just bad customers and it would be best to part ways. The worst part about dealing with such customers is that they will try to disrupt service, as many times as they want, but will constantly be unavailable if your company reaches out for payment or anything else that would be important from the company’s perspective.

The other sign of bad customers is that they are extremely indecisive – they have a tendency to constantly add requests, change the scope of the work, and or make alterations that would force you to start at the beginning. They refuse to understand that this puts an added burden of costs, time, and effort, in addition to detracting attention from the scope of work of other customers.

Unbelievably, some customers try to take advantage of their position and use every chance to exploit your company’s policies and promises. For example – they would claim non-receipt of their order and be highly vocal about their demand for a replacement. They would claim the same thing even after your company re-sends their order and additionally enjoy the freebies and or discounts you may have offered for the ‘inconvenience’ they endured. These are bad customers for sure and it would highly imprudent and detrimental for your company to keep them.

There are surely many other ways to identify bad customers and it would be in the best interest of your company to root them out. Just as good customers deserve good service, so also a good company with customer centric processes deserves only good customers.

 

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