“Take some time to play around with segmentation. If you can pinpoint your best and worst customers it’s well worth the time.” – Des MacHale
Every business has different ‘kinds’ of customers. Some are loyal and profitable, contributing in several ways to the success of the business, while others are clearly a liability. They cost the business money and require a lot of effort to keep them happy, and yet contribute little or nothing to the bottomline. As a business owner you would have experienced that ‘breed’ of customers who call several times complaining about minor issues, returning products, demand attention, and other such behaviour – it is time to ditch your worst customers. You are probably thinking – the very idea is crazy. In such a tough market, gaining customers is such a hard task, hence getting rid of even a single customer is utter nonsense. However, on taking a closer look, you would discover that some customers are certainly not worth the resources your business spends on retaining them. Smart companies ensure that they regularly check their customer base to determine which their best and worst customers are, and put in place strategies to ditch the worst ones, before they cause irreparable damage to the business in any way.
Ditching your worst customers is essential, especially given that resources are now even more limited than before and no company can afford to spend a lopsided amount on customers that do nothing for the business. Difficult / bad customers squeeze the life out of business – they use up too much energy, eat into the time your company would require for profitable customers, and their incessant complaining and bickering irritates employees and lowers their morale. Customer service representatives have a tough job as it is – but with such customers, their job becomes even more exhausting and challenging, leading to high attrition of some of the best employees. With so much time and effort required to meet the demands of these ‘customers from hell’, it would become practically impossible for a company to find time to do anything else. As a result, other parts of the business could suffer, existing customers could feel ignored, and the overall morale of the employees could fall.
Some companies have trouble in ditching who they know to be their worst customers, believing that they require the business. However, the truth is that a company would be better off without them, and in fact would have time to go after customers offering a lot more profitability. While a business exists because of customers, the relationship between the company and them must be one of parity, where both win and the relationship in mutually beneficial. If customers can give up companies that serve them poorly or do not give them value for money, it is imperative for companies to give up customers that not only do not bring them earnings, but also contribute to their losses and disrupt their daily operations. Such a relationship is not sustainable anyway, so it would be better to ditch your worst customers before they wreak havoc.
If you are still not convinced that ditching your worst customers is a good idea, maybe you could look at some of the reasons to prove that you do not need such customers. Your business requires a steady cash flow for its operating expenses – and this amount should come from regular payments made by customers. Right? However, in the case of these bad customers, these payments do not happen. The outstanding balance, you would notice, would continue to get bigger with time, and repeated requests to pay the outstanding amount would be ignored, or you would be met by some of the most ingenious excuses. Whatever be the case, the fact is that your company would not be able to sustain its business without the money and the more such customers your company has, the sooner your business could end up in doldrums. Such behaviour on the part of customers is good enough reason to ditch them (of course, ensure that you get back the amount due to your company)
Every business needs its customers to speak well of it, especially if the company puts in a lot of effort to provide high quality products and service. However, amongst your worst customers are the ones that continually complain about everything – never have a single good thing to say. Their negativity could be affecting the perception of other existing and or potential customers, which is not fair to your business. Such customers constantly demand but the amount of revenue they bring in for the company is almost non-existent. It would be best to ditch them and focus on the profitable customers, and on getting in better customers.
You know when one of your customers is the worst when they refuse to help you when you are in duress, especially if you have provided them with exemplary service and products. Customers that refuse to help or provide you with timely information that you critically require for your business, are certainly not worth the investment of resources. For such people, your business deadlines mean nothing, but will beat your company down if they need something quickly. In addition, some such customers may also try to place pressure on a company to behave dishonestly or engage in unethical behaviour for their own gain. Let go of these ‘parasites’ before they ruin your good reputation and damage business irreparably.
In the ditching your worst customers exercise, check back with your customer service teams. They would be able to let you know which customers habitually speak rudely, display foul temper, use abusive language, use unfair terms and ‘label’ the representatives with words such as lazy, dumb, and other such words, and refuse to hear your company’s side of the story. It is obvious that such customers would cause harm to the self-esteem and morale of your employees, while not really bringing in any money for your business. It is definitely time to show such customers the door – there is no sense in keeping customers that continually berate your employees and threaten to spread negativity about your company, every time they do not get what they want.
There are still others that constantly want attention and expect that every working hour be spent attending to their every whim. Not only do they expect your business and staff to be constantly available for them, they would be insensitive enough to cancel meetings on very short notice, or even be unavailable after company representatives arrive for a pre-planned meeting. This is a sheer waste of precious business hours, and no well-mannered customer would engage in such behaviour. It is best to let the poor mannered customers go before they cause more damage.
It is necessary for a business to look out for itself too. It would be sensible to set boundaries and expectations before entering into a relationship with a new customer such that there is no room for ambiguity. Such agreements must be in writing and both parties must have a copy for ready reference. It is hard work to attract customers therefore it makes sense to ensure that the customer’s values and ideals align with your business culture to avoid problems in the future.
Letting go or ‘firing’ customers is not something that most businesses are comfortable doing but if ditching your worst customers will save undue hardships and losses, it would be best to go ahead with doing so. Whatever steps you take to let go of such customers, ensure that they do not leave with any ill feelings, that they could use to tarnish your business reputation or spread ill will in the market. The thumb rule of business is to treat all customers with respect – even your worst ones, because that is what good business is all about.
