Your customer is always right. This is the biggest lie in business. You can’t tell me that the customer screaming at a cashier because they won’t let them use an expired coupon is right. It comes from a good place and when people say this, what they really mean is that companies should make every effort to please their customers and accommodate their needs. That’s sensible advice but to say that the customer is always right is not true and that attitude can harm your business.
You see, some customers are just plain bad customers and they can cost you money in all sorts of different ways. If you adopt the attitude that they’re always right and continue to do business with them, you’re going to lose out. Instead, you need to be able to identify a bad customer from the outset and avoid doing business with them entirely. To help you spot them, look out for these four signs.
This is number one on the list and I expect that you already know that, a customer who doesn’t pay, is bad news. But so many companies will still continue to do work for them because they tell themselves that they’ll get the money eventually. If they’re taking ages to pay and you’re still spending money doing work for them, you’re the one losing out.
One simple way of protecting yourself from this is using debtor finance companies; they will pay you the cash for the invoice as soon as you get it in, then when the customer pays you, you return the money to the debtor company. This is a good way to make sure that late payments don’t cause you cash flow problems.
Even so, you should still avoid dealing with customers who don’t pay. Be strict with your policy and get rid of any customers as soon as they start holding out on payment. This usually spells trouble. If you let them get away with it once, they’ll start taking advantage of you.
Too Much Contact
Having a good relationship with your customers and making yourself available to them is vital, but if you have too much contact with a customer, it might be a sign that you should drop them. If your team is constantly on the phone with them, then they’re using valuable time that should be used on other customers as well. It’s also likely that if they’re calling you up regularly, it’s because they’re having an issue of some kind. A customer that hassles you all of the time over tiny problems is likely to be costing you more money than you’re getting from them. It’s probably best to avoid doing business with them in the future.
Changing Their Mind A Lot
Everybody has dealt with a customer that changes his or mind mind every five minutes. It’s an absolute nightmare and it’ll end up costing you money because you’re doing extra work for the same payment. It’s fine for a project to change direction a few times. Nothing ever goes exactly to plan, but if you’re getting calls everyday asking you for something else, that’s a bad sign. If you total up the hours you’ve spent at the end of the project, you’ll be shocked to see how much extra work you’ve done without extra payment. That’s all time you could have spent on another project for which you were actually getting paid. It only takes a few customers like this and suddenly you’re not getting paid for half of the work that you and your staff are performing.
Listen To Your Staff
This is the number one way to work if customers are bad. If everybody rolls their eyes and tries to avoid answering when a particular customer calls, there’s something going on there. Your staff deals with these customers on a day-to-day basis. If they’re getting fed up with them for whatever reason, they’re like to be bad customers.
When you’re having trouble with a customer, ask everybody else how their dealings with them have been. If everybody is having trouble, you should break contact as soon as possible. If a customer is ever abusive to your staff, you need to end your professional relationship with them straight away. If you accept that kind of behavior, your staff will feel let down by you and morale around the office will drop. Eventually, your staff will feel as though you’ve put profits above their well-being.
Customers aren’t always right. When they’re wrong, don’t give them the benefit of the doubt – just get rid of them right away.