Choosing Your Customers

by | Jul 27, 2014 | Customer Service

Really – is this a possibility for companies? Yes it is and as a matter of fact is probably the thin line that separates a company’s success from failure. It sounds far-fetched and illogical since companies are in business because of their customers. They are the ones that decide the fate of a company and so it makes great business sense for companies to be able to steer their own fate and choose wisely. ‘Control Your Own Destiny or Someone Else Will’ is a powerful quote by Jack Welch, Ex-Chairman and CEO, General Electric that aptly explains why companies should be the ones to decide who they partner with to achieve success rather than it being controlled by others. There is no debunking the fact that daily there are expositions and write ups eulogizing the importance of customers, how customers come first and are always right. While it is necessary to have a customer focus, it must be a well-thought out strategy rather than some copycat strategy or a mindless approach to ‘fit in to’ the corporate scenario.

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Being able to maintain the drive to please and exceed customer expectations and yet making informed choices of which customers to work with seems like a tough call. Life is not simple. Customer focus is most definitely a profitable proposition but choosing your customers to focus on ranks higher on the scale. For a company to get this balance right, they must have an established culture that believes in placing customers at the core of all planning and business strategies. They must also be able establish how much value is derived from their customers and what is required to satisfy their customers. This goes beyond just merely having a customer focus, rather it is a well-rounded approach keeping in mind all aspects of the company’s activities including what will work for it and what will prove damaging.

No two customers are alike or equal and different customers bring different levels of success and profits. Business is mainly about growth and profits and companies must do the right things to forge ahead and choosing customers wisely is certainly part of this strategy. If companies were to segment their customers or potential customers it would broadly be 3 segments – profitable customers that work with you towards growth, unprofitable customers that can be ignored and the really bad customers that no company needs. It is just logical that if there are different kinds of customers, the treatment of each must be different too. This approach while maintaining a customer focus also ensures that the company is not wasting valuable resources and is able to minimize non-lucrative decisions.
The underlying premise is that companies are spending ample resources on their customers to provide great customer service by as many possible techniques available and so they have the right to choose them. Maintaining round the clock customer service contact centres, upgrading technology to ensure effective troubleshooting through diagrammatic representations, decision tree method for resolving more complex problems and having all these available on all possible communication channels. Since customers expect almost immediate responses and or resolutions, companies cannot choose which channel they will communicate through, but can definitely be prudent when choosing the ones they would like to provide service to.

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A systematic and fastidious approach will enable companies to make informed choices.

– Thorough and periodic analysis of the current customer base and their history with the company.
– Segment your customers based on this information to have a clear understanding on where you need to keep up the focus and where you need to pump up or stop the efforts altogether.
– Identifying the types of customers will make it simpler to define the kind of customers you want with you, move unprofitable ones to a profitable level and steer clear of the bad ones.
– Reach out and ally with customers who are more approachable and with whom you have been able to build a relationship. Such customers will cooperate with you to create profitability for both parties. Build on this segment so that through them you are able to attract and retain other prospective customers.

“The essence of strategy is choosing what not to do.”- Michael Porter

Let us look at the different types of customers and what companies can and must do to grow the ‘good customer’ base leaving little room for the ‘not so good’ ones.

– Profitable or good customers are the ones that all companies across all industries need. Profitable customers will be the top reason for the company’s profitability. What this means is simply that good customers will not only provide repeat business, be more understanding and approachable but also become brand ambassadors thereby attracting more prospects for business. Companies save a lot of money on advertising and promotion just because their customers are promoting them so well. Good customers indirectly reduce prices, customer service and operating costs for companies. They would already be well-versed with how the company operates, more able to help themselves through the various customer service methods of troubleshooting across channels.
Good customers also contribute to a company by engaging with them, providing constructive feedback at all times and collaborate with the company to improve on existing processes. They more readily accept minor lapses and will in fact help to do away with them. They openly express their appreciation and are willing to broadcast great customer service to others.

– Unprofitable or bad customers are also unfortunately as much a part of a company’s life as are the good ones. There are several causes for why a customer can become or is unprofitable. The primary reason would be a discrepancy between what the customers think they can and must expect and the company’s ability to provide or satisfy those expectations. Such customers don’t seek to have a relationship with the company – it is a one-time transaction that successfully meets the customer’s criteria and the customer may or may not provide repeat business.
This could be due to several reasons. It is possible that as a company you have not satisfactorily provided troubleshooting methods or provided customer experiences that were memorable. If your analysis proves this fact, take responsibility and implement sound strategies to do away with the problems that create bad customers.
If as a company you have earnestly done all you can to smoothen processes and run with negligible errors, and still cannot solve the customer issue, then the best approach is to part ways. Ease them out with courteousness and possibly refer them on to competition that might be able to meet their needs and offer the service they want. Remember not to burn bridges since even though it may be the customer’s fault they are unlikely to admit to it and may even speak ill of you over the most visible platforms of social media bring disrepute to your company.

– The bad customer is the kind of customer that every service representative dreads. They are not satisfied or pleased with any level of service or how much the company does to satisfy them. Worse still there is a portion of these bad customers who becoming rude, abrasive and even use abusive language when they perceive their needs remaining unfulfilled. No company needs these morale busters – they have an adverse effect on the customer service staff, they pull the business down and are also more likely to be vengeful and spew venom over social media sites and any other possible means. Having them in the customer base just cannot justify the costs incurred. The fewer there are of these, the better. Even if the company has a great customer service team and the culture of the company is customer focused, companies would do well to empower their staff to refuse service to such customers. Being a customer has its rights but rights also entail responsible behaviour and any customer that abuses those rights and behave irresponsibly must not be tolerated.

Choosing your customers and making the right choices means that companies won’t be able to please all but will still have unequalled loyalty and ‘through the roof’ profits through good customers, which is their right.

I don’t know the secret to success. But I do know the secret to failure is trying to please everybody.” – Bill Cosby

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