Are some customers worth keeping?

[ParaTed2k]

Huggybear's articles about customers who try to get him to do work not contracted for made me think this concept might be worthy of its own thread.

When I had a job busting shoplifters, we had a list of people who were banned from the stores we worked. The owners and managers never shed a tear for the loss of these people as customers. There are also lists kept of people who write rubber checks; another example of people who arent' considered "good" customers.

Then there are those customers who are so demanding you'll never make back what they expect you to "eat" just to keep them from taking their business (and demands) elsewhere.

In the world of business, are all customers created equal? Do we owe anyone our time and resources, even if they prove they aren't worth it?

I say no. If some people choose to be unworthy of our time and services, we should happily deprive them of it and move on.

[greenoak]

i give the big spenders more time and attention....and try to not toatally accomodate the lonesome time wasters, after a small chat.....it just seems natural...
.

[Spider]

%

I could never get my brain around the 80/20 rule - I couldn't believe that everything would fall under this concept, but the older I get, the more true it seems. In this case - 80% of customers produce 20% of the income, while 20% produce 80% of the income. Check it out in your business and see if it's true.

Once proven, does it make any sense at all to devote any effort to the 80%?

I suggest defining the troublesome customers and find some reason to refer them to a competitor!

[greenoak]

i agree, its a great tool...i trust and use this equation a lot....it just seems generally true....one result for me is that doing it can help me focus on seeing the bottom 20percent...as in the biggest waste is in the bottom 20 percent...; and doing something about it...
.it doesnt solve the great middle that takes up so much time and effort and which we couldnt do without...

[nealrm]

The only problem is that today's bum can become tomorrows top producer. A prince today can be a pauper tomorrow. One of the best bussiness talents is being able to say "No I will not do that bacause I will loss money on the deal" and have the customer hear "I value you as a customer".

But there are those customers that fall into the "More trouble than they are worth". They tend to make high demands, have unreasonable expectations or are just plain rude. For those clients they get strictly the service we state for the price we state. If they don't like it, they don't have to hire us.

[Harold Mansfield]

One thing I learned in the Hospitality Industry is that there are all kinds of people with all kinds of personalities. What was said before is very true...I've had regulars that for years were big gamers, and hefty tippers who lost their jobs and became average and I've had average tippers get a promotion and pay it forward for all of the times in the past where I treated them like gold.

The lesson is..treat everyone the same, Good. Unless they give you reason not to. I learned that if I treated everyone with the same respect and customer service, that my income didn't fluctuate as much as other Bartenders who relied heavily on just their regular customers.

The same goes true today. I've had small jobs turn into large job referrals, because I try and treat everyone like a million dollar customer.
To me every customer is worth keeping unless they do one of the following:

1. Waste your time without any additional compensation.
2. Make you chase down payments.
3. Talk down or disrespect you. (IOW treat you like a servant)
4. Consistently want extras for free.

#4 is the one that irritates me the most because there are a lot of people out there that threat everyone like servants. I can't deal with these people no matter how much they spend. But I will spend extra time with steady customers at no charge, especially if they don't ask for it.

[KristineS]

I basically subscribe to the same theory as eborg, and his exceptions are pretty much mine. There have been customers that have threatened to go to our competitors and they were such jerks and such a waste of time that I waved bye bye and never looked back. Some customers are not worth keeping.

[huggytree]

the only reason i fire a customer is over payment issues

the only reason they leave me is because im too expensive

when i have a problem customer i raise my prices to cover the extra expense...i change my methods for each customer...they want more they have to pay for it....i have a few who are difficult...i throw a couple of extra hours on every job to cover it....as long as their willing to pay they stay my customer

im having payment problems with another new customer right now..every 6 months i go through this...they owe $4,500 for the rough and want me to do the finish tomorrow....im refusing...they have to have a $4,500 check waiting for me on the job site or i turn around and go home.....im not adding $1,000 onto a bill they cant pay....i said i will wait 1 week to cash it....he bargained me to 2 weeks......he's basically out of business and doesnt realize it....any time i have payment problems i drop the customer

in my industry there are tons of crooks....i think more bad guys than any other type of business....its a mine field....im lucky that i have a steady 25-30 builders i trust.,..i have 1 slow payer i keep...she never complains about my prices, she is my biggest customer....she pays 60-70 days pretty consistantly....i call after 60 days and a check always shows up in a week....i put up with it....i trust her.............

the guy who wants a kick back probably wont be my customer again....if i have payment problems it wont suprise me......if he pays quickly i may consider more work...if its slow definately not....it will be the 3rd nail in his coffin...found out that kick back could be against the law.....i actually agreed to do a couple of extra's for free instead of the kick back...he screwed up............so all is well with no $$ changing hands.....

the 80 / 20 rule doesnt work for me....unless i have only 20 percent type customers....ive never really lost money....break even once in a while.....my high bids keep the 80 percent away maybe...

[ParaTed2k]

It's not the amount of money the customer spends that makes the difference for me. I treat them all well, whether they spend a few dollars every now and then or look for new reasons to send greeting cards. What I'm talking about are the people who are so demanding, so dishonest, or so annoying that (as a few of you put it) it's better to encourage them to go to the competition.

[AaronConway]

When I had a store I had no problem referring "trouble customers" to our competitors. I would never leave that decision up to an employee though...before you know it they'll be referring everybody someplace else.

[dojo]

If a client doesn't pay of becomes abusive, I fire him in an instant. Otherwise, all are worth keeping ;)

[GoingLocal]

If a client doesn't pay of becomes abusive, I fire him in an instant. Otherwise, all are worth keeping ;)

I couldn't agree less.

In nearly every industry or service there are plenty of customers. The only question is if the ones you like are working with you or someone else. Personally, I'd rather wake up in the morning excited to speak with those I work with rather then dread what trick or game they will try next.

If there is a personality issue with a client I finish the job then become too busy to help them. To save face I'll recommend someone who might be willing to working with them, or provide training resources to help them through the issue first.

Stress kills in so many different ways. Filling your mind with negative thoughts is something I try avoiding, and a bad customer that causes this to happen just isn't with the health concerns. When I'm not working with someone I want my mind to free from them, not cluttered with residual angst their methods placed on me.

[KristineS]

Stress is one downside of working with a difficult customer. Wasted time is another. Your time is money. If you spend it with a difficult customer who takes up a great deal of time with unreasonable demands, needs handholding every minute or is just generally unpleasant and unreasonable, you're taking time away from doing other things. Even if the customer is a big dollar customer, setting him or her loose could free up time you could use to find other customers who would replace the lost revenue.

Many business owners fall into the mindset that they need their customers and so let those they do have treat them badly. The thing is, there are always more customers. It may take a while to find them, and it might not be easy, but it can be done.