| We all have at least one - a customer with
whom we just don't like working. Before you get too excited thinking I'm going to say it's
okay to fire any customer - regardless of the reason - guess again.
What I am talking about are customers we don't like because
after we do everything we do for them, we simply are not making any money from them. Not
making any money off of a customer goes beyond your commission or bonus. It's the
bottom-line profit your company is not making because of the customer. No salesperson is
going to intentionally go out and find unprofitable customers, but too often we do end up
with a few of these.
We wind up with unprofitable customers not because of the
price we're charging them, but because of the intensity of their demands and requests. You
know what I'm talking about. It's the customer who seems to always want one more thing. No
matter how good of service you think you're providing them, they keep asking for something
more.
The problem we get into is the more we serve the customer,
the more they expect from us. Each time we help them, they come away thinking of something
else they want from us. These ongoing demands on your time (and the time of other people
in your company) are what quickly erode profit - turning a once profitable customer into
one that is completely not profitable.
What is even more disturbing is that often this dynamic
happens so slowly that we don't even realize how unprofitable they have become. This
"slow drain" means that it usually gets way out of control before anyone
realizes how bad the situation is.
To be able to determine which customers need to be
"fired," you must become more discerning of customers who place too many demands
on you and/or other people in your company. It is absolutely essential you get control,
because if a customer becomes high maintenance, there is a great likelihood they will
remain high maintenance.
As the salesperson servicing the account, you are often the
one in the best position to realize how high maintenance the customer has become. More
than likely, most of the customer's requests are flowing through you. You then dole these
requests out to the respective departments, but collectively all the departments do not
see the big picture of everything the customer is demanding.
Once you spot a trend with a customer making multiple
service requests, you must begin detailing the cost involved. A detailed account of what
has transpired will help when you and management need to decide how to deal with the
customer.
Once you have identified an unprofitable customer, you and
your company must decide what is going to be done about the customer.
Too many times, companies roll over and play dead and allow
the customer to continue to be high-maintenance. In the end, the only thing that happens
is profit is lost and sales motivation is depleted. You and other people in the company
become disenchanted with the amount of support devoted to a customer who never seems to be
happy.
If, on the other hand, smarter heads prevail, then you and
management will realize something needs to be done to rectify the situation.
There are two options:
1. Confront the customer. Your objective is to decrease
their requests.
2. Increase their prices. This will offset the additional
costs you incur serving the customer.
Personally, I prefer option #2. The reason is simple.
Increasing their price either restores your bottom-line profit or they reject your price
increase and leave. Essentially what this option does is allow you to make the profit you
need - or it releases you from a customer who is draining your profit. Either way, you and
your company are winners.
This is a much better option than the first choice of
confronting the customer. I've found that confronting the customer tends to create a level
of tension that winds up as long-term friction. Ultimately, no one is happy.
If you raise your prices for those difficult customers, you
will gain the profit you need or the customer will walk away. The beautiful part of using
this approach to "fire" your customer is that they leave without you ever having
to tell them you are firing them.
Profit is good. Don't sacrifice it in the name of
"good customer service." Wisdom tells you that the best service is that which
satisfies your customer and allows you to make a profit.Your time is best spent on
profitable activities.
Mark Hunter, "The Sales Hunter," www.TheSalesHunter.com, © 2011 |
