Asking what current customers you want to let go is just as crucial to your bottom line as what customers you want to attract.
Last time, I talked about customer service and how it relates to my dealings with a 4-year-old niece-in-law. My main conceit of the column was that customers complaining about problems tend to let their emotional sides take over and let their logical sides take a back seat. Dealing with them is much like dealing with a 4-year-old. Empathy, immediacy, patience, praise, and listening are all crucial to having a successful customer service experience.
Sadly, this is not a sure-fire way to win over customers who have problems with your company. The reality is that some customers are better off not being your customers. While the old adage is "the customer is always right," and something along the lines of "make every customer happy," it's just not always true. It's a smart business that knows what customers it wants to keep and what customers it should get rid of. Today we'll talk about customers you should get rid of.
Here's another adage that marketers like to introduce at conferences as if they invented it: KISS ("keep it simple, stupid"). It's the idea that the most effective route is usually the simplest, and not to overcomplicate processes. It's a great idea and one proven by Apple and any other user-experience company. Well, the flip side of this is the sad reality that you can't cure stupid. Some people are just plain old dumb. Yes, I said it. And sadly, no matter how simple you keep things, they will still not understand them. And because these people are stupid, they will also jump to conclusions or give reason to events that have nothing to do with reality. Here's an example. I mentioned last week that one of my company's clients is having us look at their customer service systems and protocols to make them more user-friendly, efficient, and effective. This client has a recurring subscription option, much like the "endless bowl of dog food" you can order from a pet supply company: every month they send you X amount of dog food that you have pre-approved so you never run out.
One customer emailed last week saying they no longer trusted the company because they saw two other orders for different amounts on their credit card a few days after the normal recurring charge occurred. The recurring amounts, however, didn't match with any of my clients' price points, so they knew that something was amiss. When they asked what merchant descriptor was on the credit card statement, it was clear that these charges weren't from my client at all. They politely explained that to the customer. Even though there was proof that my client didn't overcharge or double-bill them, and they took the time to explain to him who did charge him that money, he still said he didn't trust my client after this. Of course, this makes no sense. A rational, thinking adult would end up being appreciative and more loyal as an outcome. In reviewing the customer's account, we discovered he had also called in two weeks earlier because he lost his password and didn't know how to retrieve it (yes, there is a "lost password?" functionality widely-used on the site), and he called in a separate time because he forgot his username. All of these calls (along with the credit card issue) were within the first month of service.
So the reality is that this guy is simply stupid. How he survives on a daily basis mystifies me. But you can't cure stupid, and no matter how you help this guy, there will be another problem stemming from him next week. I say, let him go. We don't want someone like him as a customer. I would be more than happy for a competitor to lose money dealing with the fact that this guy is simply an idiot.
This is only the tip of the iceberg of people you should simply let go. Couponers are another class of people like this. These are the ones who were attracted to your company because of some amazing offer, and now feel entitled to get everything at some kind of discount. And, the moment a competitor offers a discount, they will flock like lemmings to them. These are not loyal people, nor will they ever spend real money with you (when they aren't discounting). The next time you run a good promotion they will come back, but at some point you need to section off those who you simply can't get to convert to being a better customer. Loyal customers are loyal because of your customer service (unless they are just stupid; see above), your expertise, your selection, your convenience, and your user experience. Those that are only price-sensitive will rarely be profitable for you, unless your business model is specifically geared toward those people.
It's OK to lose customers, especially those who are costing you more money than they are worth. I sit in a lot of strategy meetings in which the fundamental questions include "what customers do we want to attract?" I rarely sit in on meetings where the question "what customers do we want to avoid" is asked, or more pointedly, "what current customers do we want to let go?" These questions are just as crucial to your bottom line. The flip side of attracting the right customers is repelling the wrong ones.
Thoughts, comments? Leave me a note below!
Until next time…
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