It would be a wonderful experience if every customer you deal was positive, easy to understand and happy. Despite of best effort, it is difficult have profitable relationship with every customer.
It is best to identify unprofitable customers and get rid of them. However, not all companies can afford to lose customers. If your business is discounting constantly for customers to secure the sale, then this is an indication that the customer is not profitable and may ruin your business in long run.
In today’s competitive business world what is more important is how a company resolves the customer issues. Companies who have decided to listen to their customer and encourage feedback are seeing increasing sales and strengthening their customer loyalty. The question is – “how to identify bad customers and when to remove them?” If the customer is costing you more money than profit you make, it’s time to remove them from your marketing activities.
How to recognize a bad customer?
Many companies don’t have tools to identify bad customers and determine if they are profitable for their business or not. The rule of any business is that you should fire 10% of your customers to free your resources and serve more profitable clients every year. Eliminating that 10% will allow you to focus on 20% profitable customers who deserve it.
Here is how you identify bad customers –
- Make a list of customers who always quibble over prices. Moreover, they cost you extra money and are really slow to pay.
- Identify the customers who neither talk good about your company nor refer any new business to you. If the customer is contacting your frequently for small issues, he/she might not be worth keeping.
- Some customers display no loyalty to your company and go to other companies to fulfill their requirements. A customer who admits changing companies on a regular basis because of small pricing issues is unlikely be a profitable client for your business. They will leave your company the minute they find a better deal.
- It is difficult to convince some customers and you may not be able to establish a good working relationship with them. Some customers change their mind about what they want or keep on adding multiple requests to a project. This costs your money and increases the burden of your employees, leading to unproductive results.
- A customer who abusive your staff and doesn’t treat your staff with respect is no more a king. Remember that your customer support representatives are the first ones who feel the pressure from bad customers. Trust your employees and if you hear constant complain about a particular customer, take a closer look to see if you are dealing with an unprofitable customer.
If you have customer with more than two of the above characteristics, then you need to think twice about such customer. Analyze the profits and advantages of keeping such customer, before you fire him/her.
How to fire bad customers?
Firing a bad customer can be a daunting task in today’s competitive business world. However, it has to be done for the sake of your company. A single bad customer can potential result in huge loss for your business, and can lead to everything like – employee resignation, bad reputation, declining profits etc. Here are some of the graceful ways to fire a bad customer –
1. Be honest and positive
Positive language in customer support can make a big difference. It can make your customers feel more positive about the interaction, even if you are conveying a bad message. One should always remember that all the customers are human beings and huger for appreciation. Always thank the customers for their interest in your business, even if he/she is a bad customer.
2. Know your rights
Being a business owner, you have every right to refuse service to a customer based on the history of complaints. Be firm, even if the customer threatens you with a legal action of complaint. Remember that you are protected, as long as you have recorded history of complaints.State the reasons for your refusal in a diplomatic way to avoid unnecessary troubles in the future.
3. Change terms
If the customer is difficult to deal with, you can decide to change something about the terms that work well for the customer as well as your company. If customer adds new demands continually, tell them honestly that you need to cap the amount of time spent. Set a probation period and come to an agreement, before you fire the customer completely.
4. Always leave the door open
Never leave a customer on bad terms, and always keep the doors open for re-entry. Remember that things won’t remain same forever, and a bad customer may turn into the best customer of your organization. Make sure to leave your bad customer really feel good about your company.
If you have decided to fire a customer, do it tactfully and confidentially to avoid turning a business decision to a nightmare that disaffects other customers. In today’s competitive business world, finding a new customer is very difficult. And, firing an existing customer is the worst situation one could ever face. But, business is all about choices and priorities. Identifying abusive, dissatisfied and unprofitable customers can free up your time and help you focus more on retaining challenging & profitable customers. It can protect your brand reputation from complaints by unsatisfied customers and help your business grow.
Keeping the customer in mind is essential when making decisions about customer support. You can improve customer service for both the customer and company, with little mindfulness and the best Help Desk solutions offered at Vision Helpdesk.