Should you ever fire a customer? Now that is the $1,000,000 question!

Picture this. A well dressed man walks into a car showroom and requests to be shown the hatchback models in all variants. An executive is allotted to show the customer around, but for each car he sees, the customer always has a comment to make.

‘That car has been giving very poor mileage. I read so in the paper.’

‘This one? It’s not spacious and the upholstery looks dull.’

‘This car looks like an overturned platypus.’

Suddenly out of nowhere, the manager of the showroom walks up to the customer and says ‘Thank you sir, but we are no longer interested in selling our cars to you. Our competitor’s showroom is down the road. You may please go find a car of your choice there.’

Now, this brings us to our million dollar question.

Is the customer always right?

No entrepreneur will want to say this out loud, but I shall go ahead and do so for the betterment of global customer service.


Screen Shot 2014-10-06 at 12.55.37 pm

Entrepreneurs normally face a whole array of clients, each one completely different from the others. But it has taken many years for them to realize that the age-old tradition is not always true, and that not every customer is valuable to a company.

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Look at the big picture – LTV

A technology major’s CEO once had a high profile customer who had some specific needs like a personalized support agent for his company, extra features on the software, new customizations etc. The CEO happily adhered to the customer’s every request because he was a big client and a huge source of business.

One day, he sat with my accountant and evaluated his expenditure on the customer and realized that for the business he was getting, he was actually spending more in doing the extras each month, and at this rate, he would actually be having a loss in a year.

So, he gritted my teeth and had the talk with the customer. Such conversations can get quite nasty and might push your buttons a lot, but a customer cannot be a liability to a company’s growth.

[pullquote]  A customer cannot be a liability to a company’s growth[/pullquote]

After much futility, the CEO took the bold decision to let him go. It’s a healthy practice to evaluable the Life Time Value (LTV) of each customer to check profitability. Lots of money does not necessarily ensure lots of profit, and carrying customers like these along your journey could only burden your finances more.

Before you decide how you want to handle your customers, you need to know what are the various kinds of customers. 

The festival shopper

Festival shopper

There are the not-so-big-budget customers who utilize the product well, have a good understanding of their business, but are constantly trying to find ways to bring down their expenses.

They will ask for discounts, milk your support staff for every petty issue and find small discrepancies with your product to leverage that in reducing the price.

Rating: 3/5

The lazy banker

Lazy banker

These customers are the ones you should be wary of. They may treat your support staff well, communicate nicely and make good use of the product.

But the issue with them, is they never pay on time. Sometimes, not pay at all.

It is very difficult to handle such customers as you should not be hounding your customers to pay you each time. It’s a good service you are delivering and they should acknowledge that by paying on time.

Payments are what fills the company’s coffers and in turn, fuels growth and you cannot invest so much time in begging your customers to pay.

Rating: 2/5

The angry teenager

 Angry teenager sparta

 

These customers are every support agent’s nightmare. And there are many such stories. They will pay on time, use the product well, but will constantly throw expletives at your support staff, make a huge scene for simple issues and ask for escalating every single ticket for no reason.

Such customers will swallow your support time and money, ask for pointless queries to be prioritized highly and send your agents on a wild goose chase every other day. 

Here’s a look at a customer who decided to throw a tantrum for a very simple issue, got abusive and had to be escorted out by security.

Rating: 1/5 

The Smart Santa

Smart santa customer

These are undoubtedly your most valuable customers. Whether it is in terms of LTV or in terms of how they treat support agents, they are always top shelf customers.

They communicate well in case they have a genuine issue, pay on time and never cause your agents or your coffers any problem. The best part about such customers is, they are honest in reprimanding when an issue that has been delayed, and generous in complimenting if their work was done well. They are the perfect versions of Santa.

Rating: 5/5

Here is a value chart to assess your customers.
Different types of customers

The big question – Should I fire a customer? 

After knowing the kind of customers there are, I wonder. Should companies ever fire a customer?

If he is the festival shopper, what is required is for you to manage him well so that he understands what can be done and what cannot be done and learns to utilize the services of a company well. 

The lazy banker needs to have an intervention. If the issue has been taken up multiple times, a couple of scares have to be sent either in terms of interrupting service or by diluting their customer support, until they get disciplined enough to pay on time.

The angry teenager can get exactly one warning. If not, he should immediately be fired, for these customers could cause only harm to your company’s growth and will swallow your money and time.

The Smart Santa needs to be rewarded for his loyalty and given the right perks to ensure he stays with you for a long time. 

Experiences and relationships

To sum things up, whether you are a guy who runs a customer service business or a customer who needs one, the experiences for both need to be healthy and fruitful. Learn to love every customer of yours and do everything in your power to expect vice versa.

If you think I have left out any key points here, do add your comments and I shall be more than happy to include them in. Happy Customer Service!

Murali Satagopan

Customer service blogger, HappyFox enthusiast.