Why should you sack customers?

by Colin Shaw on April 18, 2013
Why should you sack customers?

Sack your Customers

‘You cannot please all the people all the time’… this is a basic reality that many businesses seem to ignore when looking at improving their Customer Experience. When we, Beyond Philosophy, enter conversations with clients on how they can improve their Customer centricity, typically they mistakenly think Customer centricity means giving Customers everything they want. Their mantra is ‘The Customer is always right’, but allow me let you into a secret, the Customer is not always right! This is a terribly overused phrase and is emblematic of a misunderstanding or what customer Centricity is.

Credit for ‘The Customer is always right’ —at least according to my best available information—to Harry Gordon Selfridge, proprietor of a London department store, who allegedly coined this phrase in 1909. Over a century later the notion has been uttered so many times that it is now hollow. Rarely does anyone seem to truly believe the words they mouth.

‘The Customer is always right’ may be a handy little phrase that at its best gives guidance to every member of the company who has contact with its customers, however whilst well-intended, like most other statements of absolutes it is not always right. The customer, not to put too fine a point on it, is often wrong.

 How you deal with them when they are wrong is the act of Customer centricity.

Customers can sometimes want unreasonable concessions. The customer may haggle for a price so low as to eliminate most or all of your profit margin. The customer may agree to a price but then return to negotiate further. The customer may be ‘economical with the truth’. They may commit to buying something and then change their mind. They may use your sales staff to compile information but then go elsewhere to make a purchase. They may try to bluff you with tales of the incredibly low price for which one of your competitors is prepared to sell the very same item. They may refuse or fail to pay some, or all, of their bill and feel completely justified in doing so. To me it is clear – you can’t please all the people all the time.

In this group of Customers there will be people who you can guide to be better Customers. If they won’t convert to being the type of Customer you want then you need to ‘sack the Customer’. This means nicely telling them that you no longer wish to deal with them. You are running a business not a charity. Customer centricity does not mean doing everything the customer wants, you can’t afford it.

Some Customers can destroy morale in your workforce and may be arrogant, abrasive, rude, demanding, and/or unreasonable individuals who treat your employees inappropriately. Too many companies turn a blind eye to this as ‘the customer is always right’ and refuse to defend their employees, thereby killing morale and in the end actually creating an environment of worse customer service. While certainly plenty of employees provide poor customer service on a daily basis and are truly in the wrong, there are also more than a few cases in which it is the customer who is at fault.

Refusing to side with staff when a customer is being unreasonable sends the message that the almighty dollar—even one pried from the pockets of an overbearing and unreasonable human being—matters more than the employees. “We don’t care what you have to put up with,” the company might as well announce publicly, “as long as we collect every penny of revenue available.”  Besides, isn’t it an affront to anyone’s basic sense of justice that the rude person should receive better treatment than those who are polite and pleasant? What message does that send to the rest of your customers?

In contrast Ritz Carlton are a good example of how employees and Customers should work together.

Their motto states:

 “We are Ladies and Gentlemen serving Ladies and Gentlemen.”

In other words they are equals. This is not servitude. They are not below the Customer but providing them with a service. Sometimes the Customer is wrong and no-one, including employees, deserves to be shouted and sworn at. When I conduct our live webinar Customer Experience Management certification training one module is dedicated to Customer centricity.

The bottom line is you need to select the Customers you want and those you don’t want. If a Customer is constantly trying to squeeze your margins so thin that the relationship actually ends up costing you money then you need to sack them. Some Customers require constant babysitting and so much hand-holding that they consume resources far in excess of the revenue they generate, you need to sack them! These are the ones that will actually enhance your bottom line when you politely but firmly part ways.

In truth, a positive customer experience does not stem from the customer always being right. Creating an emotional connection and the foundation of a relationship carries far more value.

A true relationship between your company and your customer is similar in many ways as I outlined in my blog ‘How to build lasting business relationships’. The Customer is not always right. How you deal with Customers who are wrong shows how Customer centric your organization is. Segmenting your market and understanding the customers you want and those that you don’t is key for building a great Customer Experience. Sacking the Customer you don’t want is part of this process.

Colin Shaw

Colin Shaw is founder & CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author of four best-selling books. Beyond Philosophy provide consulting, specialised research & training from offices in Atlanta, Georgia and London, England.

Follow Colin Shaw on Twitter: 
Colin ShawWhy should you sack customers?