It all starts with your definition of a “dud” customer.
We tend to focus on the number of customers we have and/or to collect some “big” (corporate) names among our customers.
However, it all comes down to the customer value of each customer.
In general, 30% of B2B customers are structurally loss-making. Do you want customers like that?
Find out who your less-than-0-value customers are and don’t renew their contract. Your competitor deserves them.
Clients who repeatedly act inappropriately toward you or your staff members, or who refuse to follow the necessary processes that allow you to do a good job for them, may need to be removed from your client list. Doing business is a two-way street, requiring certain behavior from both the customer and the vendor. Don’t let a customer’s destructive demeanor or lack of integrity adversely affect your business. Politely encourage such customers to move on to your competitors.
A “dud” customer in my mind is a problem customer. I don’t believe the customer is always right. What I do believe is that the customer is NOT always right, but they are always the customer. So, we let them be wrong with dignity and respect… until they act in undignified ways. A customer that crosses the line with the way they treat employees should be diplomatically “fired.” Do it in a way that leaves the door open for a reconciliation at a later time, should the customer change his/her way.
Not sure what you mean by “dud” customer but here are my criterion for when it is time to send a customer to your competition:
1. The cost to serve the customer exceeds the return you are getting now AND in the future.
2. The emotional wear and tear on your frontline is not worth keeping the abusive customer.
3. The customer is engaging in or seeks to engage actions that violate your core values–like integrity!
Encourage the customer to go elsewhere where they can be better served.
Love your answer, Chip!
Everybody is correct, but I would add that it is key to find out WHY the customer is a dud (however you define it).
Is it something fixable?
Is it a new behavior, or have they always been acting like this?
Before dumping any customer, I would sit down and talk to them to find out what is going on, and let them know there is serious talk about moving them to a different supplier who might better be able to serve them.
They just may decide to change their behavior.
Hi David, what you define as ‘dud customer’ is for me a toxic one. A person whose behavior may sabotage your activity in different ways:
– Change their goals (even after signing a contract)
– Puts you constantly under pressure – whilst not respecting their agreed timelines
– Shows poor trust or respect towards you
As for the ‘when’ in your question, there is no perfect moment to dump – however the worst thing you can do is hoping that such customers use common sense.
– an unhappy customer tells 12 others about their experience – so you might lose 13 customers
– on ave it costs 5x more to recruit a new customer than to sell to an existing one
So, time for great insight into how your Customer Experience educated/ ‘trained’ customers to behave this way. Then, absorb the learning across strategy, operations and people to become a better organisation, better people & better at CX.
Then talk and conciouslyuncouple.
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