By Mike DuBose and Blake DuBose
Whether you are part of the retail, wholesale, or service spheres, any business leader, owner, or employee who deals regularly with customers knows that there are some who will waste your time, make your life miserable, rob you of profits, and distract you from serving better quality, more profitable clients. Their unreasonable demands can lead to frustration, anger, or even business failure. Based on thirty years of business experience and interviews with many business leaders, we have found that about 20% of customers will consume 80% of your company’s staff time and resources—if you let them.
Defining, screening, and partnering with the right clients (and disengaging from those who do not align with your mission and purpose) are important elements for business success, according to Jim Collins’ bestselling book Good to Great. Many businesses, however, find it difficult to end negative customer relationships for reasons ranging from potential negative public relations to loss of profit or a misguided belief in the old adage “The customer is always right.” But according to Lior Arrusy’s recent article in Harvard Business Review, “The customer is not always right and in some cases should not be the customer at all. It’s time to end the fear of customers’ public feedback and to start managing relationships with abusive customers in a disciplined way.”
To protect your staff and business, begin by following Will Yakowicz’s advice in a 2015 Inc. article and “define your best and worst customers;” then, take steps to find the right clients and cut the wrong ones loose. There are several types of problem clients you should carefully screen and/or avoid, for the sake of your own sanity and your staff’s:
- Tire-Kickers: These consumers have no intention of buying anything from you, but are always “thinking about it.” They contact you, get your hopes up for a sale, and take up time you could be spending with the right buyers. Then, they fade away, never to be seen again.
- Moochers: They act like serious buyers, asking for detailed proposals with costs, and then use this information to extract more services at lower prices from their existing vendors. (For this reason, some technology companies are now charging to provide customer quotes.) Others may take the ideas from your proposal and try to “do it themselves” with resources bought online to save money.
- Cheapskates: They want a lot—but are unwilling to pay for it. Price, not quality, drives their decision. You may be offering them a great value for what they’re getting, but if it’s not the cheapest quote they get, they’re not interested! If you do manage to get them to sign a contract, they’ll “nickel and dime” you every step of the way.
- Brick Walls: They throw out the bait by acting serious and may even sign a contract. Then, they suddenly become very busy and don’t prioritize your requests for information that you need to perform the job. They make you beg and plead for a response, but get irritated when you are unable to deliver on time. In a 2013 article for Inc.com, Geoffrey James recommends the best way to deal with “brick walls:” “Throw the ball back into their court by asking: ‘So, how exactly can I help you?’ If they don’t have an answer, shrug and move on.”
- The Unqualified: These customers imply that they’re the decision-maker for their organization; some even go so far as to promise that your company will receive their contract. However, they’re not actually authorized to make important choices, and are often overruled by senior decision-makers who have their own set of influences and relationships to consider.
- Miscommunicators: They represent themselves as being able to define project expectations and outcomes, but fail to communicate adequately with decision-makers within their own organizations. Thus, the product or service you spend a lot of time to create is not what senior leadership within their company is expecting. When it finally does go up the chain of command, it is deemed unacceptable and thrown out. Your organization then must scramble to reinvent the project and please everyone, wasting valuable staff hours in the process. Take note: if you’re having these problems early on in the relationship, they are unlikely to get better with time!
- Stealth Job-Seekers: These individuals may act like customers to gain entry to your organization, but once you’ve established communication or agreed to meet with them, they reveal their true motive: they’re looking to build contacts within your industry. Their ultimate goal is either getting a job or meeting with decision-makers to promote their business.
- Deadbeats: They believe they’re doing you a favor by giving you their business, but they never pay you on time, sometimes delaying payment for 90-120 days. You’re forced to call them multiple times to seek payment as they protect their own cash flow at your expense.
- Terrorizers: These people use fear, rudeness, intimidation, and threatening language to bully your staff into doing what they want. Terrorizers can actually do a lot of damage to your organization, no matter how much money they bring in: if you allow your customers to be verbally abusive, good employees will leave. In fact, we once cancelled a six-figure contract with such a client to protect our staff!
- Red-Tapers: Bureaucracies fall into this category, often seeking the lowest possible prices without balancing them against the value of building a relationship with a quality company. Typically, they design rigid, labor-intensive Requests for Proposals (RFPs) with all sorts of rules, regulations, and requirements. They often refuse to disclose the amount of money allocated for the project, leaving you to guess whether they’re even worth working with! You spend a great deal of time completing their extensive applications or RFPs only to find that you’re just a number on a list to them, with no consideration for the effort you took in tailoring your proposal to their needs.
- Complainers: They look for anything (no matter how small) that you do wrong so that they can bring it to your attention. Their constant whining takes up a lot of staff time, and they can rarely be pleased. Perfectionists often fall into this category.
- The Directionless: These customers have no strategic plan, mission, vision, or purpose. They have no clue where they are going or how to get there, and therefore are unable to provide you with any guidance on what they’re looking for from your work. Their projects absorb an enormous amount of time as they flounder around for direction, making many unpredictable changes along the way. As Deborah Mitchell noted in a 2015 Entrepreneur article, “If a project starts off in one direction and eventually starts to morph into something completely different, then it might be time to stop and re-evaluate. If the project is still in your wheelhouse and doable, then you may have to negotiate your fees and guidelines moving forward. If the client expects more for less, then it’s time to go your separate ways.”
- Traditionalists: This group displays a refusal to consider change, new ideas, or suggestions on how you could help make their organizations more efficient, effective, and profitable. You’ll often hear from them, “But this is the way we’ve always done it!”
- The Emotionally Needy: They view your employees as their therapists or social network, impulsively calling to talk with little to no point in mind. They are typically disorganized and need a lot of hand-holding to make even small decisions.
- Control Freaks: These paranoid clients often hire lawyers to construct rigid contracts that give them all the rights without equal protection for your business. They’ll typically refuse to sign your version of a contract, drawing out the process with their endless negotiations. Many times, they don’t tailor requirements for specific projects, making you jump through hoops to meet demands that are unusual for contractors in your field.
- The Unethical: They push you to become involved in their immoral or illegal schemes, or may draw your business into questionable relationships. Once, DuBose Web Group declined to develop a very profitable website because it promoted a political smear campaign
The bottom line: To help define your desired client base, first develop a clear strategic plan, mission, purpose, and vision with the input of all staff. Then, as potential projects arise, follow the strategy of Southwest Airlines founder Herb Kelleher. When someone brought him an idea, he would hold it up to the strategic plan, and if it didn’t fit, Kelleher rejected it. The same goes for customers—if a client is not a good fit for your company and its strategic plan, do as Arrusy recommended in Harvard Business Review and clearly but kindly end the relationship, puttingit “in the context of finding ‘a better match’ elsewhere.”
Although many businesses (especially those that are new, small, or both) feel pressured to accept every customer that walks through the door, it’s important to be selective when considering partnerships. A customer mismatch, even if profitable, can ultimately prove destructive to your business—whereas a good match can bring excitement, fun, and value to both parties!
About the Authors: Our corporate and personal purpose is to “create opportunities to improve lives” by sharing our knowledge, research, experiences, successes, and mistakes. You can e-mail us at [email protected].
Mike DuBose, a University of South Carolina graduate, is the author of The Art of Building a Great Business. He has been in business since 1981 and is the owner of Columbia Conference Center, Research Associates, The Evaluation Group, and DuBose Fitness Center. Visit his nonprofit website www.mikedubose.com for a free copy of his book and additional business, travel, health, and personal published articles.
Blake DuBose graduated from Newberry College’s Schools of Business and Psychology and is president of DuBose Web Group (www.duboseweb.com).
Katie Beck serves as Director of Communications for the DuBose family of companies. She graduated from the USC School of Journalism and Honors College.
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