03/ 12/ 2002
Have you every heard of the 80-20 rule? In regard to customers it means that80% of your business will be from 20% of your customers. It also may mean that 20% of your customers will give you 80% of your problems. Many small businesses with repeat customers find that a small handful of the customers cause almost all the problems. In today's Workshop, Jeffrey Moses shows why some of these customers need to be shown the door (politely, of course).
Certain customers always seem to be a pain. They're never satisfied. They have excessive demands, even to the point of the company losing money on transactions and causing undue employee aggravation. Some customers have an attitude that is so hostile and irritable that it demeans employees. Some insist on monopolizing employees to the extent that other customers cannot be served. And some customers may even verbally abuse employees, either with profanity or personal remarks. While the adage "the customer is always right" should be the Golden Rule of all business activity, there are times when specific customers may be habitually causing more trouble than they are worth. When this happens, the management or ownership of the company needs to "fire" them.
Usually it's the front-line employees who take the most abuse from customers. These employees almost always have their hands tied: they have to grin and bear it. They don't and probably shouldn't have the power to refuse to do business with someone. It's the responsibility of management to determine when a customer is disrupting the overall business. Employees should be encouraged to report such customers, and to give managers detailed information about the customer's activities.
There is a fine line between a customer being demanding and being impossible. There are no manuals written on the subject. When encountering the situation, managers need to speak with all employees involved to determine not only what the customer does to be so irritating, but how long the customer has been disrupting business.
When management determines that a specific customer is, indeed, a severe disruption, the customer should be spoken with -- not by letter or phone, but in person. Only when the customer is at a distance, and always contacts the company by phone, is it appropriate to speak with them about the matter on the telephone. But in no circumstances should the contact be other than verbal. E-mails simply will not do in this case.
When speaking with such customers, managers should describe to them the nature of the complaint, and -- without naming employees -- should give detailed accounts of the problem. When talking with the customer face-to-face, or when taking care of the matter via a phone call, the manager should take the attitude that the customer may not be aware of the strain that he or she is putting on the company. The conversation should remain entirely businesslike. If the customer takes offence (which is quite likely), the manager should simply say that if future events along the same line occur, the company will have no choice but to end its relationship with the customer. Always give the customer a chance to rectify what has been done. The manager should make the customer aware that the company values his or her business but will not tolerate future disruptions.
The proof of a customer's change in ways can be determined only by future contacts with the company. If the same patterns of disruption continue, the manager who spoke with the customer should inform the customer by mail that the company is ending their business relationship. The letter should include a few details from the first conversation, but it is not necessary to go into great length. It's not required that a manager inform the customer of the company's decision during a face-to-face talk. Such a talk could produce fireworks, and could be temporarily as disruptive to the staff as the customer's original activities.
If the customer in question gives the company a large amount of business, clearly such a decision will be harder. But letting even important customers go when they're causing major disruption can help a business in the long run. Employees will gain new motivation, and will respect the fact that the company really is on their side.
When the staff finds out that a problem customer has been fired, don't be surprised if a loud cheer goes up. Such customers can be a real thorn in an employee's side, and can make their entire work-life miserable.
