Subscribe to Inc. magazine
INC BUSINESS OWNERS COUNCIL

3 Reasons to Tell a Customer It's Time to See Other Companies

When a customer demands to speak with me, the owner, about an issue normally resolved by my customer service team, it usually means that the end of our relationship is nigh.
Advertisement

This post is about break-ups. The kind that end due to irreconcilable differences and an acknowledgement (at least by one party) that both sides would be better off without the other.

Don’t get me wrong, I’m not talking about relationships rooted in love and romance. I’m talking about the ‘other’ personal relationships in your life: those with your customers. Though these relationships are admittedly the lifeblood of your business, every once in a while, your best efforts to please will not be enough. An unsatisfied customer will become, well, unsatisfiable. And though impulse might tell you to persevere (and that every customer counts), in some cases, it is best to call it quits.

When a customer demands to speak with me, the owner, about an issue normally resolved by my customer service team, it usually means that the end of our relationship is nigh. My team has been given the training and latitude to do whatever necessary to ensure our customers are happy. If a call is escalated through the ranks and up to me, it’s usually an indication that the customer will not be happy, no matter what.

A recent encounter makes a good example of this scenario. A customer felt she had been overcharged for shipping and called to complain. The fact was, she had been fairly charged, though for the sake of goodwill, our customer service representative immediately refunded the shipping charge and apologized. Still unsatisfied, the customer demanded to speak with a supervisor, and ultimately with me, the owner. By the time I got on the phone, there wasn’t a problem to fix or an issue to discuss. Nothing I could say or do would make a difference; it was apparent that the relationship just wasn’t going to work out. So, much to her surprise, I broke up with her.

This is not to say that severing such connections is something I take lightly. Like any personal relationship, time and trust investments are hard to let go of. But in business, you need to ensure profitability, which means terminating unproductive customer relationships. Here are three important reasons why:

  1. They cost you money. Customers aren’t always profitable. Telecommunications giant Sprint infamously severed ties with thousands of customers in 2007.  The reason? These customers were identified as having made excessive numbers of calls to customer service. The incremental time (read: labor costs) of a customer service agent dealing with repeatedly unsatisfied customers means that your company is losing labor hours and, more importantly, not profiting from the same time and effort spent on more fruitful accounts.
  2. They can hurt morale. Organizations train and recruit customer service staff who have a desire, and a mandate, to please. If they are unable to do so, even when doing their job to the best of their training and ability, this outcome weighs on morale.  Repeatedly dealing with “no-win” situations is not a compelling reason for staff to come to work every morning.
  3. They steal your focus. Attempting to placate unsatisfiable customers means you cannot focus on the customers who really count - i.e. the ones who will be profitable over the long-term. Customers, like dates, are attracted to your business for a number of reasons, from your marketing efforts to mere happenstance. To maintain that attraction and foster a long-term relationship, you need to ensure they appreciate your core value proposition. Focus on the ones who are a good match and not on those who might find a better match elsewhere. It makes more sense for both parties.

To paraphrase Abraham Lincoln, you can please some of the people all of the time, and all of the people some of the time, but you can’t please all of the people all of the time. Taking this concept one step further, you need to maintain relationships with the ‘some of the people’ that you can please all of the time. By trying to serve everyone, you ultimately serve no one. And by terminating an unproductive relationship, both you and your ‘ex’ customer can seek other, more compatible, relationships.

Like a tough break-up, it may not seem like the best solution at the time, but in the long run, it’s the best for everyone.

 

IMAGE: Junos/Getty
Last updated: Apr 9, 2013

DAVID EVANS | Columnist | CEO of EastSeat, LLC

David started his first business at 19 and has spent the majority of his career running his own companies, including his most recent, EasySeat, which has made the Inc 500|5000 for the last two years. David is a classically-trained software developer and IT generalist. David is a member of the Inc. Business Owners Council.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: