Wednesday, August 03, 2005

"It May Be Time to Take Out the Trash"

Any business that's been in business for any significant time period has probably had to fire one of their problematic, or non-performing, employees. You might give them a chance to "shape up or ship out" first, but if they don't come around, its completely counter-productive to keep them.

Unfortunately, the same thing goes for a business's customers.

Although every business can profit from customer complaints by providing unprecedented service in handling the problem, and turn even the most distressed customers into life-long sources of future revenue, sometimes a problematic customer can cost your business more than its worth. The cost to fix their constant problems and keep them as satisfied customers hinders their ability to provide future profits over the long run.

Although it might not seem apparent, firing your worst customers could actually help your business, if they cost you more than their worth.

This reminds me of a joke I heard on a Mike's Hard Lemonade commercial that I saw on TV yesterday.

"Why is divorce so expensive? Because its worth it!"

Here are a few questions to ask before firing your worst customers:

1. Will the customer spend more money with me in the future if I help to solve their problem?

2. Will that future stream of income provide a profit for the business?

3. Will this customer refer more potential customers to me?

4. Will this customer tell potential customers of their dissatisfaction? (When something goes wrong, you can bet they'll tell ten other people.)

5. How much money have I lost trying to help this customer in the past?

6. Is it worth it?


Post a Comment

<< Home