Empirical evidence indicates that many businesses spend an inordinate amount of time, effort and often extra expense dealing with and attempting to appease difficult customers. Recognize that a customer is someone who repetitively buys from the business, and in todays economy, a much sought-after commodity. It is understood that it is usually more economical to retain this customer than it is to acquire a new customer, so we continue to appease without reviewing the customers economic value to our business.
For this discussion difficult customers are those who haggle over pricing, are known to fabricate a competitors price, dont bother to forecast their needs and then criticize your inability to anticipate those needs, or routinely ignore the payment terms and then take the payment discount anyway. They complain about service support, want special product modifications that will not be economical, and expect you to cover any damages to material or equipment supplied by your company irrespective of the cause. Apparently difficult customers feel that it is their right and duty to be as unreasonable as possible to assure getting the best deal. It is not surprising that we do give them a better deal, maybe just to get them out of our hair.
The problem that should concern you is that you spend so much time on the difficult customer that theres little time available for you to acknowledge and work with your best customers, those who are willing to pay a fair price, who abide by the payable discount terms and who are interested in partnering with you to optimize benefits for themselves and you.
Interestingly, we see a similar situation in how employees are managed. Far too much time is spent with the underperformers in attempting to get them to improve instead of providing resources, praise and financial recognition to the superior performers. Consequently we are surprised when the superior performer leaves the business feeling underappreciated and ignored.
So what do we do about those difficult customers? I suggest several actions:
Rank your customers from easiest to deal with to the hardest. Then test the will of the hardest with which to do business. Dont provide concessions such as price, payment terms, etc. Offer nothing more than what you provide to your best customers.
If you feel these difficult customers cant be expected to work with you or demonstrate continued disregard in trying to be more equitable and fair, then you should strongly consider firing them. Contrary to popular belief, it is usually not advantageous to try to keep all customers. Major corporations know that regardless of their ability to corner the market and capture 100 percent of the business they only seek the best 80 percent. It is the last 20 percent that will be problematic for a variety of reasons. These customers are hard to satisfy and not likely to be very profitable or marginal at best. Let your competitor try his luck at supporting them.
C. NORMAN BECKERT Idaho district director for SCORE, the Service Corps of Retired Executives