Sometimes, you should fire your customer

It has been a good but busy week (complain, complain) between work and home. 

One evening I returned a purchase at a local big box store, without a problem — the clerk was friendly, helpful and fast.  Whilst in line, I overheard a discussion (it was difficult not to hear) a return transaction gone wrong, where the clerk could not say anything to appease the customer attempting to return something for cash without a receipt.

Hello, McFly?  Where have you been?  Return something without any receipt?  Surely, you’re joking.

Then I thought that sometimes, the customer is not always right. 

And it’s OK to fire your customer.

BusinessWeek has an article on how one small firm did just that… and made for more profitable business.

“Not every client can be your favorite. That’s what Debra Brede, an investment adviser and owner of five-person D.K. Brede Investment Management in Needham, Mass., used to think about one of her most demanding customers. For 20 years, the woman showed up at appointments with bags stuffed with every slip of paper connected with her investments—proxy statements, annual reports, dividend notices—expecting Brede to go over each one with her. Brede did. She wanted to offer good service, and this woman had a $1 million account. That’s a healthy amount for Brede’s company, which has about $1.7 million in revenues each year.”

The article notes that when customers begin costing you money, then it’s time to cut the cord… a move that may even boost revenues. In this case, the investment manager ‘fired’ about a dozen of her clients (less than 2% of the total customers) and found that “profits rose 25% last year, compared with about 9.5% in each of the past few years.”

Last year, Seth Godin wrote that sometimes you have to fire a customer.

“Politely decline to do business with them. Refer them to your arch competitors. Take them off the mailing list. Don’t make promises you can’t keep, don’t be rude, just move on.”

Our own Heather Hamilton looked at this in her blog last year, garnering several comments, one noting that…

“I think one can fire customer if and when it makes sense. Best Buy ranks all of its customers by profitability. They “fire” the lowest ranking customers by not sending them direct mail that contains promotions or special offers. They are not overtly telling the customer to go away; they just aren’t encouraging them to come back.”

So, if you want to fire a customer, just don’t call them back. 😉

Tags: Microsoft, Customer Service, Customer Support, whack.

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