Here's the scene: It's 6:30 Monday morning. You arrive at your office. You can see your desktop because you came in Saturday in an attempt to get caught up. The week promises to be busy. The materials you desperately needed just arrived and operations are running smoothly. The week is off to a good start and you feel good.
We have difficult customers
About
Five minutes later, you have a conversation with another client regarding another problem. This situation is much less clear. It may be your fault, or maybe this is another "stupid" client. Perhaps all of your clients are "stupid."
Recently, due to a small revelation, I began asking myself that very question. Which clients do we dread? Come on, you know exactly what I mean. These are the people with which you really hate to talk. You know as soon as you take the call how the conversation is going to go. You've had the same conversation with the customer before.
While at the Fulfillment Conference in Salt Lake City, I attended a seminar on "Growth Strategies for Your Fulfillment Business" presented by Dave Gilbert and Jim Pinkin. Jim made a comment that I, being open minded, immediately rejected. When asked what range of gross margin he seeks on new business, Jim said he always assumes a healthy margin. He went on to say the important factor for his company is whether it enjoys working with the client and that it only accepts work from those it does. Having my sights firmly on the bottom line, I decided it must be nice to afford such an attitude.
We don't need difficult customers
However, I have changed my mind! Profit be damned! Two Mondays after returning from the conference, I came to the conclusion our organization has four clients that none of us enjoys working with and our business relationships should be re-evaluated. Our conclusion is that these clients have a negative impact on our entire operation. All four are profitable and long-time clients. Currently, we are in the process of discontinuing business with three of them. There are two very important reasons.
First, when we are frustrated by a client's incompetence, unreasonable demands, negative attitude or any of the other reasons that he made your list of loser customers, it affects our relationship with each and every one of our clients. When we suffer from these frustrations, we share them with others. Eventually, we all adopt a negative attitude regarding that customer. If this is acceptable for some customers, why not all of them? We've all heard that the customer is always right, but few of us really believe it. We should, because if we don't, we have the wrong customers.
There will always be circumstances when the customer makes mistakes. When this happens, if you have the right customers, there will be a constructive discussion of responsibilities and all parties involved will fairly assess their part in the situation. What I am referring to is those situations when it is not possible to determine exactly who is at fault. When there is a problematic situation, the client gets the benefit of the doubt. This is the first criterion we are using to analyze our client relationships. If we cannot give our customer the benefit of the doubt, we should not be working with them.
The second reason to weed these "problem" customers out is that we should all enjoy our work. I suspect that if you analyze which situations frustrate you and your staff, dealing with a select few difficult clients will be at the top of the list. Is it worth it? For three of the four that we identified, the answer is no. The other one is profitable enough that we are willing to attempt to correct some of the problems by working more closely with the client.
Difficult customers cost too much
Determining our true costs for our problem clients was difficult. What we found didn't surprise anyone: unusually high amounts of customer service time, research into inventory discrepancies (sometimes two or three times on the same issue), continual questioning of pricing or services. The conclusion that we have come to is that there is a common tendency for these customers to require too much of us. We are not able to satisfy their needs. The fact their demands are unreasonable is irrelevant. Neither of us is happy. If they thought anyone else could satisfy their needs, they probably would have gone to a competitor a long time ago. But, just because they have chosen us to bear their sorrow does not mean we have to accept that responsibility.
There is another benefit of going through this process. Our staff was left feeling that its enjoyment of our customers is important, and we may all be enjoying the surviving customers a little more than we did before.
This article was contributed by the Mail Advertising Service Association (MASA). MASA is an 80-year-old trade association for lettershops, mailhouses, fulfillment companies and direct mail agencies. For more information, visit www.masa.org.
Rick Chamberlin is president and co-owner of Blue Chip Mailing Services, Inc., which offers a wide array of lettershop services. He may be contacted at 513-541-4800.