Editor’s Note: When we received this letter from Jeffrey Steinke of LessMeeting, we were struck by how frequently businesses face questions about the cost/benefit ratio of labor-intensive customers. While there are no easy answers, we’ll do our best to provide some points to consider. Many thanks to Jeff for allowing us to share his question with our readers.
Dear Desk.com Support,
From our perspective, being a customer-first company is extremely important, and a primary reason why we use Desk.com. We are wondering, though, about supporting prospective customers who need intensive personal attention and hand holding instead of reading through our features and support resources.
We are worried that serving this customer is not scalable and takes our energies away from the needs of our other customers. Some advice recommends against spending time with these customers but I’m looking for advice about how to analyze case by case to find a middle ground, so that we can satisfy every prospective customer.
Jeffrey Steinke, Co-Founder, LessMeeting.com
Assess Your Business for Level of Influence and Trust
When looking at an especially labor-intensive customer, first check your website, customer journey, and content. Customer uncertainty builds distrust, and a distrustful customer will be more needy and demanding. While you obviously can’t aim your business at outliers, make sure you’re not contributing to customer confusion with missing or unclear messaging. Walk in the customer’s shoes, and even ask a small group of testers to walk through essential tasks see if answers are easy enough to find.
This kind of research can unearth great opportunities for improvement to cut down on service load. If you see a large number of customers requiring hands-on service, you could also consider changes in your pricing to add options for those customers who need a higher level of support.
Is Your Customer Carrying a “Burden of Uncertainty”
Kate Nasser has written about the burden of uncertainty—the things you do or don’t do that take customers away from you, cause neediness, and foster a lack of confidence. Nasser contends that you can build your customers’ proficiency with their trust in you:
“When I go into companies to build a super customer experience culture, I often see that the leaders are aware of these customer burdens – the teams aren’t. Teach every team in your company to foresee these burdens and reduce them through product and service design, positive selling and trust-based customer service. It delivers a super customer experience with great success and best results for your business.”
Where Do Your Responsibilities to Your Customers Begin and End?
Sometimes it becomes clear that the benefits of maintaining a customer relationship are outweighed by the drawbacks. What are the factors that contribute to such a serious decision?
In her article When Is It Okay to Fire Your Customers, Ginger Conlon writes:
“According to published studies, about 30 percent of the average company's customer base delivers the majority of its profits, 50 percent add nothing, and the remaining 20 percent actually cost the company money. Don Peppers and Martha Rogers, Ph.D., call these customers below zeros (BZs). Some companies don't mind having BZs because their main concern is having as many customers as possible--profitable or not. But if you were to ask your high-value customers whether they mind "supporting" the BZs through the profit they deliver, what do you think they'd say? Really, is it any wonder Sprint fired 1,000 unprofitable customers?”
"Companies need to be crystal clear about the profile of customers who align with their strategy, culture and resources. ‘Difficult’ customers can range from an ill-mannered executive to an account that always needs extra hand-holding and support. Prune non-ideal customers relentlessly. Over time, they drain the life force out of your organization, and stop you from finding more ideal fits."
Questions to Help with Your Decision
Your answers might guide your next steps:
- Why is this customer a challenge? In other words, are they needy, demanding, or dissatisfied due to deficits on your end? Is working with this customer likely to help you learn and improve your business?
- Is this customer likely to be instrumental in bringing in more (and less demanding) customers? Are they likely to be great advocates or evangelists?
- Is this customer keeping you from providing the highest level of satisfaction to your other customers because they are a drag on your resources?
Experts Recommend Considering the Value of Word-of-Mouth
Some companies look at the cost of over-servicing low-value customers as a way to get word-of-mouth marketing (Socialnomics calls this by the more powerful term “world-of-mouth marketing”) about their awesome service, or just treat it as a cost of doing business and build it into their overall pricing structure. In general, while these customers may be unprofitable, they are also perhaps an absorbable percentage of your overall business.
“Tough customers are the greatest test for customer service--it’s the time to shine. Your toughest customer can turn out to be your most vocal detractor, or promoter. The customer who is disrespectful or abusive to employees needs to be fired, not those who are tough to serve.” - Hank Brigman, Touchpoint Guru
“I do NOT believe in the 80/20 rule where your treat the top customers like royalty. It does not take more time to treat everyone as a king. The goal is to crush your competition and create a consistent customer experience that they will tell their friends about. Focus on word of mouth advertising. Wow every customer. - John Tschohl, Customer Service Strategist
If You Have to Say Goodbye
“Firing a customer is never easy....The key to firing customers is to make it about your inability
to serve them in a way that will make them happy. Approach the discussion from the perspective of how your business is just not set up to provide the service they are looking for, give reasons why this is true when possible, and emphasize that you only want to keep them as a customer if you can deliver an excellent customer experience consistently for them.” - Adam Toporek, Customers That Stick
Once you weigh all the factors, you and your team will be better able to make decisions about that customer who—for whatever reason—requires more time, energy, and resources than 99% of your customer base. While you consider your options, watch The Clash video as they ask the question we address in this post!
Remember, you can always contact us at email@example.com with questions and feedback.