If you constantly cannot get hold of a client and he doesn’t respond to your messages, there might be a problem. Of course the customer might be ill, busy, or on holiday. However if the problem persists, it’s a situation you don’t want your people to be in.
Tries To Game The System
It’s only natural that you provide various guarantees, promises and return policies. But a customer who orders from you and returns the item as faulty a day before the return period expires and then proceeds to order it again is clearly tying to game the system.
Or one who constantly claims that an order was lost in transit and demands a replacement to be sent, only to be undelivered again. Some customers will take a chance at your policies to try and get stuff for free. Even though they place orders, they end up costing you money and aren’t worth keeping.
The 4P’s Matrix
Sometimes you might not be able to clearly identify bad customers. Yet, you know that you should let go of some of them, even if only to make way for other opportunities. In such situation, use the 4P’s matrix to assess your client base.
Note: The below is a system I’ve been using in my business for over a decade. I don’t remember who invented it, I learned it from a business coach I worked with at a time.
The system is simple – grade each customer on 4 criteria:
Price. What price do they pay you? Do they pay a full price or constantly ask for discounts? Or perhaps you on boarded them via a highly reduced price and thus the rate is lower than others?
Prospect. What is the prospect of getting more business from them?
Promotion. Is having them good for promotion? Are they a well-known brand that looks good on your clients list?
Pain. Are they easy or a pain to work with to work with? Do their projects run smoothly or do they cause delays with unreasonable demands, conflicts and so on?
Create a chart and plot all clients against those criteria on it. You should very quickly see potential clients to drop. Sure, it’s not an exhaustive system. But even this simple exercise can help you identify clients you should take a closer look at. Also, it allows you to identify your most cherishable customers.
So far so good, you now have a framework to identify good and bad customers. But how do you actually get rid of the bad ones? That’s not as easy as it might sound. Sure, you could send out a mean email, but with all the social media outlets this could do real damage to your brand. Let’s say you collected a list of bad customers, what do you do?
I. Communicate this list with your front-end staff
Share the list and explain your staff that the company would prefer to lose them, however without making them your enemies. Then provide your staff with a list of tactics they could deploy, containing the following points.
II. Explain the situation
This is a simple one, but it has to be done with care. In the first request, explain as politely as possible that with the current demands, it is not possible for you to serve the customer. Best is to set up a standard reply for this.
III. Suggest your competition
If price is their main concern, maybe they should become aware of your cheaper competition. Or if they are looking for a fuller service or more features, suggest your more expensive competitors. Make the customer realise that there is a tradeoff between price and quality and bless your competitors with this customer.
IV. Radically reduce the service effort
If you’re dealing with a hopeless customer, add a flag that answers to his inquiries shouldn’t take longer than a few minutes. Be very brief and forget the pleasantries. In time the customer will get the message.
V. Stop serving the customer.
In time, there is just no point in communicating any longer. Instead of growing the tensions even further, stop answering the inquiries. In the end the customer will give up and leave.
Of course, these are extreme measures. They should only be applied to your most extreme customers. Instead of aiming for the 10%, start by simply identifying and labelling the bad customers you run into. And remember, a good customer service deserves a good customer.