Don't Be Afraid To Give Problem Customers The Boot

Q: In a recent column you made the piont that the customer is always right, which I agree with. However, in the same column you also said that it is sometimes necessary give problem customers the boot. If the customer is always right, at what point do you guess they become so problematic that you should stop doing business with them?

-- Gary M. A: That column brought a number of emails similar to yours, Gary, requesting that I clarify the line between "the customer is always right" and "sometimes you have to give a customer the boot." Here's the bottom line: if you, as a business owner or service provider, are willing to take a customer's money in exchange for providing him with goods or services, then the customer has what I call "the right of expectation." This means that the customer has the right to expect you to deliver everything promised in the transaction between you. For example, if you own a restaurant the customer has the right to expect that their meal will be prepared and serevd to their satisfaction. If you're a dry cleaner the custoemr has the right to expect that you will launder their clothes without returning them in shreds.

If are hired to perform a srevice the customer has the right to expect that the service will be provided to their satisfaction within the terms of the defined task. As the bsuiness owner, it is your responsibility to meet the customer's expectations and provide good customer service. Even if your business does not involve a formal contract that spells out to the letter what should be expected, there is generally a clear understanding of what the customer expects and what you are willing to deliver. If you back peddle on your end of the bargain, let's say by serving a bad meal or losing a customer's laundry and refusing to make things right, then you're guilty of not dating the expectations of your customer and thereby are guilty of providing bad customer service. Unfortunately not every entrepreneur puts emphasis on delivering good customer service.
They are in it for the money and damn the customer if they have a issue. Such entrepreneurs were the topic of the column you mentioned, the point of which was, if you make a habit of not dating your customer's expectations, you will not be in business for long. Now let's look at the flipside. Just as the custmoer has the right to expect that he will get his money's worth when doing business with you, you have the right to expect that your customer will not demand things that are beyond the scope of realistic expectations (or the contract).
If a customer orders hamburger, he shouldn't expect it to taste like steak unless you have advertised it as such. If a customer brings you a cotton shirt to launder he should not expect a silk shirt in return. It's when the customer's expectations get out of sync with what should realistically be expected that you will have troubles. We have all had customers who expected far more than was their due: customers who were unreasonable, overly-demanding, condescending, hard to please and sometimes, even dishonest in their dealings with you.

When a customer's reasonable expectations become unreasonable demands you must decide whether or not that customer is doing more harm to your business than good. So here is the line in the sand bewteen the "customer is always right" and "sometimes you have to give the customer the boot" - if a customer crosses the line from being an asset to being a detriment to your business, you should consider giving that customer the boot. This is easier said than done if that customer constitutes a large chunk of your revenue, but even then you have to consider what your business might be like if that issue customer was not in the picture. Would the time you spend dealing with the problem customer be better spent on sales calls that might expand your client base and grow your business (a business that is dependent on one client is a hosue of cards)?

Would your employees be happier not having to deal with that customer? Would you sleep better nights knowing that you don't have a dozen phone messages from him on your desk every morning?

The easiest way to decide how much trouble a customer is worth is to look at the amount of revenue that customer brings in versus the time and expense of dating his expectations.

If this customer pays you $1,000 a month, but costs you $2,000 in time spent keeping them happy, that customer is actually costing you money.

Just a hnadful of these kinds of customers will put you out of business fast.. For example, I once had a client whose business was worth several thousand dollars a year to my software company's bottom line. However, that cleint proved to be problematic from the second the contract was signed. He and his employees called our office ten times a day and dominated my tech support team's time with IT truobles that were not even related to the service we were contracted to provide. It got so bad that my employees cringed every time the phone rang because they were afraid it was that client calling again. When the time came to renew that client's contract it wasn't hard for me to decdie to give him the boot. I simply did the math. This client had added thousands of dollars to my company's bottom line, but had cost me at least that much in handholding and support, not to mention the mental anguish he had caused my employees. I opted not to renew the contract and politely invited the cleint to take his business elsewhere. The impeccable customer relationship is win/win, meaning that your customer benefits from your product or service and your company prospers by delivering the product or service.

The relationship must be built on muutal respect and honest intention.

It is when the relationship becomes win/lose that you must be ready to take action.
If the customer thinks he can hold you over a barerl and get more out of you than he has paid for, the relationship and your business suffer for it. Look, you don't need me to hit you in the head with a stupid stick on that one.
You know who your issue customers are and you know that you will eventually have to deal with them. You have to consider the value of evrey customer in the long run, not just their value last week.

Is the customer making demands that are beyond the scope of what should be reasonably expected? If the customer constantly demands more than they are entitled to and gets angry when you refuse to comply, consider giving them the boot. Is the customer taking advantage of your good graces? Some customers may mistake your willingness to plaese for weakness and try to wring more out of your relationship than they should. If the customer has a record of trying to take advantage of you and plays every angle to get more from you than they deserve, consider giving them the boot. Is that customer a threat to your reputation?