GPI 149 – You cannot afford every customer; identify and kick out bums.

Do you know why your company cannot make every customer happy?  It is because you do not have all the money in the world nor do you want every customer out there.  Some are bums and suck the life out of your organization stealing valuable opportunity, time and money.  You do not need, want, nor can you afford such customers.  Starting today, begin to define which of these customers in your industry you need to fire.  Pick someone who is perfect for doing just this in your organization if you must.

Assign someone to “fire” worthless customers.  You will never be able to satisfy every person who walks into your company to shop or buy something.  Decide now that there needs to be someone assigned to sorting good from bad customers.  There are some clients who are not worth courting so they are better encouraged to shop elsewhere.

Do not say ‘no’, just raise prices.  Sift out scammers, thieves, bums and all others who steal attention away from your good customers.  There are those individuals who live to scam any system, waste others’ time and some who simply have nothing to do but to create havoc regardless of their reasons.  Make sure these individuals are isolated, identified and abruptly terminated as a customer of your firm.  How do you terminate them?  Raise their prices high enough in order to pay your firm what they are worth.  They will have an option; pay more or leave.  Either way you win.

99% of bad customers will go away with price increases, a few will not.  Make sure there is someone on staff who is strong willed and assigned to doing just this thing professionally and diligently every day.  Your company needs to have these bad customers rooted out of your system so you are not wasting time with them.  You need to spend your time with good customers (commercial and consumer markets both).

Examples of bad customers who need ‘booting”:

• Looks but never buys:  The buyer or purchasing agent who requests bids of your company time after time but never gives your firm any work.  He most likely is bribed by the favored winner but because of rules in house must get multiple bids.  This includes the company buyer that invites your bids time after time but rewards them ultimately to friends, current vendors and only uses you for secondary and third bids as a necessity.   Stop replying
• Returns everything:  Fire the customer who returns everything that he or she buys.  This customer most probably never intends to keep the item, such as clothing, but wears it once and returns it.
• Demands and disputes all prices and deals:  The customer who demands price differences between competing stores every week needs to be cut.  This type of customer is expensive and not worth taking time from your other good paying customers.  You have customers that deserve your attention and pampering because they pay you well.
• Waits to scream in a crowd:  The customer who makes it a point to argue loudly in front of others on a regular basis to get discounts, returns, markdowns etc.  The best course of action for you to take is accept the items the customer wants to return, give him his money back, refuse any more exchanges and ask the person to leave the store permanently because your firm cannot provide what he wants.  If necessary, ask your 300 pound guard to politely escort him out the door to his car, if he has one.
• Word is worthless:  Those buyers who call, request your firm to hurry, demand a fast detailed quote then changes nearly all of the details at the last minute.  He demands premium service and attention to his requests and then again at the last minute, expects nothing but the lowest price.  Once a verbal agreement is reached on the telephone between this buyer and your firm, he issues a written purchase order that is not what was discussed, or, the purchase order that he issues does not cover the agreement and leaves obvious gaps which lean to the buyer’s advantage.  When the buyer is requested to correct his purchase order he throws up false arguments to no avail or final agreement, thus proving this is a potential customer that needs to be crossed off the list and ultimately booted.  When in doubt, remind yourself of the good customers that you have.

Good but difficult customers pay handsomely.  Customers may be difficult to please but good ones pay your company handsomely.  Although this type requires a lot of care, remember why you are in business.  This behavior is to be expected and they must be cared for, coddled and billed at the appropriately premium rate to reimburse the company for this excessive cost.

Bum customers are difficult and do not pay.  Bums do not pay, ask for credit on items they have not paid for, want something free every time they talk to you and are unwilling to give anything in exchange for this relationship.  If you were thinking they sound somewhat like bad girl or bad boyfriends, you are partially right.  The problem with bum customers is they are worse because they affect relationships with other potential customers.  Get rid of them.

Allow payment terms to ‘detect and sift out’ the bums.  Sometimes the best thing to do in order to ‘test for a bum’ is to ask for a down payment before any work is to be done or ask to be paid upfront on the first purchase before any credit can be granted.  Take precaution and wait for personal checks to clear the bank.  These simple precautions that require available funds to be spent normally sift out worthless bums who demand everything and actually want to pay little to nothing.  They are not worth it.