Customer Service

CUTTING TIES WITH BAD CUSTOMERS

Although smart entrepreneurs and business managers recognize that customer service is an important element in ensuring company success, it is a reality of life that a small percentage of customers are simply incapable of being satisfied with the service they receive. Small business owners are generally averse to letting any customers go, but consultants contend that some clients can simply become more trouble than they are worth for any number of reasons. The solution to determining whether a business owner should sever ties with a problematic customer, observed Nation's Business, "may lie in defining the word 'customer' properly: Someone who costs you money isn't a customer but rather a liability."

Entrepreneur's Jacquelyn Lynn listed several scenarios in which consultants recommend that small businesses consider ending their relationship with a troublesome client. Client attitudes and actions that should prompt an honest assessment include:

• Lack of respect or appreciation for the small business owner's work.
• Excessive demands, either on company or individual staff members.
• Unreasonable expectations in terms of monetary arrangements for work or goods provided.
• Proclivity for imposing difficult or unrealistic deadlines.
• Tendency to pay bills late (or not at all).
• Treats company as a commodity that can be discarded as soon as it ceases to be useful to the client.

Lynn noted that, in some instances, honest communication with the client can salvage a deteriorating relationship, but this does not always work. "If your attempts to make the relationship a mutually productive one don't work," said Lynn, "it may be time to move on and focus on more profitable clients or prospective clients. Calculate what you will lose in gross revenue, and decide if your business can stand the financial hit." If the business is able to withstand the loss of revenue, move forward to terminate the relationship in a professional manner. If not, then the company's leadership needs to develop a strategy to expand existing business relationships or garner new clients so that the company can sever relations with the offending customer down the line.

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