In last week’s newsletter I wrote about an associate who lost a $125 sales because of a “difficult” customer. I told the associate that she didn’t just lose a sale, but a customer, too.
I went on to discuss with her the value of a customer, and how that lost customer took her $750 in annual purchases with her to another store. Worse, that same customer took with her nearly $4,000 in future purchases that will now be made somewhere else. I asked the associate, “Was the customer’s unreasonable demand worth losing $4,000 in sales?” The answer was no.
Although it is rare, sometimes the answer is yes. Sometimes a customer’s demand is unreasonable. Sometimes a customer’s behavior is unacceptable. Sometimes you realize that you’d just rather not keep that particular customer.
You want to think through purposely losing a customer. I tell my clients to make sure that it is a logical decision, not an emotional one. That’s why I monetize the decision with the annual or lifetime value equation. Sometimes though, no amount of sales is worth keeping a customer. That’s when it is time to “fire” them.
There is an art to properly “firing” a customer. It needs done in a way that minimizes how upset the customer gets. In the old days an upset customer told his/her friends and family. No big deal. Now, with sites like Yelp and Ripoff Report, a cranky customer can tell a lot of people all about it, and it is usually a very one-sided story.
That’s why I never make the firing about the customer. I just tell them that, unfortunately, the store is falling short of his/her expectations, and it would be in their best interest to shop somewhere else. Done.
No accusations. No argument. No need to bring up the issues. Just say, “I’m sorry, but we’re clearly falling short of your expectations. I think it is in both of our best interests that you shop somewhere else. I hope they do a better job.”
See how easy that is? And how calm?
You might, if it seems necessary, go on to explain that this will be the last refund, exchange, or purchase since you will no longer be accepting any further transactions from him/her. It’s also the best chance to end the relationship on a positive note, if that’s possible.
Your customer will be taken aback when you fire them. It rarely, if ever, has happened to them. Some of these customers are used to bullying retailers and getting their way. This ensures it will be the last time it happens in yours.
Clearly, firing a customer is an action of last resort. It’s not a decision to be taken lightly. And it’s a decision that goes way past the occasional annoying customer or customer who is having a bad day.
A “fire-able” customer is one who has materially disrupted your business, disrespected your policies, abused your generosity, demoralized your staff, and/or is just not profitable.
I hope you don’t have to practice this technique any time in the future, but if the time comes to fire a customer, you now know an easy and non-confrontational way to do so.
