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  • When and Why to Part Ways with a Customer

    Lior Arussy, When and Why to Part Ways with a Customer

    List three customers you wish you could fire right now. That didn’t take long, right? Firing customers, when all other options are exhausted, should be a legitimate option — whether you’re working with a business-to-business multimillion dollar client or a business-to-consumer $10 customer. The customer is not always right and in some cases should not be the customer at all. It’s time to end the fear of customers’ public feedback and to start managing relationships with abusive customers in a disciplined way.

    Some readers may dismiss this notion as the view of a consultant who does not understand real-world cash flow demands and financial pressures — but I’ve experienced this challenge first hand. We recently parted ways with our largest client because they were hurting morale and putting our reputation at risk. We fulfilled all our obligations to the client and then moved on. It wasn’t an easy decision, but one that we all ultimately agreed was necessary.

    So ask yourself: Which customers do you want to serve and which customer behaviors do you want to eliminate? Here are five guidelines to consider as you reframe your own customer relationships:

    Clearly define your ideal and non-ideal customers. When considering cultural fit and value, not every customer with a budget is an ideal customer. Unforgiving customers may be too costly to serve. Obnoxious, profanity-laden customers will damage employee morale. Individual customers with frequent calls to customer service are not ideal either. Develop a chart that displays both sets of traits side-by-side.  Identify the costs associated with serving these customers and the impact on your profitability and the next steps will be obvious to all.

    Design an appropriate response for outliers. Make sure that the customer-firing process is clear cut and impactful, but ensure there is still a touch of generosity. You do not want to adopt the negativity that the customer is bringing to your business. Firing customers is not a competition you win. It is unfortunate and can be hurtful to the person you are speaking to. When you deliver the news, put it in the context of finding “a better match” elsewhere. Take the time to explain to the customer why certain demands or behaviors may have been a customer-win, but do not represent a mutual win.  Hotels often deal with this issue and can be a source of learning for those companies looking to come up with firing best practices.

    Train employees on how to deal with abusive customers. Make sure that your staff knows how to handle problematic customers. Your employees may be operating under the “the customer is king” cliché, and may be trying endlessly to please every whim.  Align their understanding to your new customer criteria and provide them with the tools and authority to act on it. Companies often do not conduct special training to handle entitled and abusive customers, therefore leaving employees to improvise. Introduce this training to your staff and allow them to practice behind-the-scenes before taking it public.

    Empower employees to make on-the-spot decisions. Employees are your company’s frontline eyes and ears. They witness which customers are worth keeping and which are not. When a Southwest airlines employee charged an obese passenger for two seats, customer advocates from around the world cried foul. Southwest went to court and refused to settle. They eventually won the case. The logic behind it was quite simple: What would you say to the passenger sitting next to the obese passenger? He or she would ultimately be paying the price. This action was initiated by an employee who made a judgment call in the moment. The airline supported him all the way to court. Make sure your employees feel the same support. Provide them with the assurance and financial means they need to make these decisions on the spot.

    Review and assess criteria regularly. Abusive customers will always come up with new tricks.  REI cancelled its lifetime return policy due to customers blatantly purchasing products with the intention of returning them. Disney changed its handicapped access policy due to customer abuse. In both cases, all customers are now suffering because of the actions of a few outliers. If you offer a generous customer experience, you better believe someone will try to take advantage of it. Stay ahead of those advantage-takers.

    The customer-empowered era is ushering in the trend of a customer-obsessed culture, but we should not confuse customer obsession with the acceptance of abusive behavior and loss of profits. Customer centricity is about loving and spoiling the right customers while leaving the rest to your competitors. Lose the fear of public dissatisfaction and continue to strive to delight and surprise the right customers through exceptional customer experiences. Then — and only then — will the customer always be right.

    Lior Arussy is the president of Strativity Group, a customer experience transformation firm. Follow him on Twitter at @LiorStrativity.

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