Every successful sales person throughout the course of their career deals with difficult personalities. Particularly, customers who purchase on a recurring basis, conflicts are simply inevitable, part of the process, and at times difficult to resolve in such a way that the ongoing relationship remains profitable. Whether it is the customer who thrives on drama or the one that will not pay until coerced, what follows is the advice of a sales expert who has seen them all.
Work the 80/20 rule with care
Most successful businesses earn 80% of their profits from 20% of customers. This means of course that the additional 20% of profits come from the other 80%. Furthermore, those who comprise the highly profitable 20% most often are not the difficult customers, due to the fact they have been sold on a product or service which they believe in, trust, and need. There is a business necessity for what is being sold and they see a real value in the transaction.
Conversely, although the other 80% of customers are an opportunity for sales and market growth, these customers are either too small or do not use a company’s products and services enough to necessarily view the relationship as a mutual benefit. These customers have the highest propensity to be difficult.
The traditional wisdom in regard to the portion of this population who are difficult and low volume is to measure the finical benefit of the relationship, and when the costs outweigh the profitability, fire the customer. This is not wrong and at times desirable, but it must be considered in light of the worldwide platform every person has allowing them to make their disdain for products and services easily accessible to anyone with an internet connection.
Whether it is Yelp, the Better Business Bureau, Twitter, Facebook, a well ranked blog, Angie’s List, or the myriad of other websites dedicated to opening up the world to the whims of those who are dissatisfied, a fired customer can wreak havoc on a business. Understanding the 80/20 rule without also understanding the Age of Knowledge in which we reside, a company can do real harm to itself.
Limiting the shrinkage of profitability by firing difficult customers can and should be done by adhering to these important tenets:
- Prepare for the breakup. Never fire a customer without carefully considering the process described herein.
- Never get emotional. Whether in writing, in person, or on the phone – business is just business. Don’t take it personally, ever. An emotional response to a difficult customer will only serve to motivate the customer to react in kind, and in the end they will win. The customer will win by at least telling the story with a slant to their advantage to a few of their colleagues. The more likely scenario is they describe the incident in great detail online. Do not motivate a customer to do so by reacting emotionally.
- Always be logical and reasonable. If there is a business need to fire a customer there is a rational foundation for which it is built. Focus and describe only these reasons when letting the customer go.
- Be honest. Take the blame for the mistakes made as the seller, all of them. If blame is shared, it must be placed upon the company providing the product and service. Humility is the key because it is very difficult to hold against a person or business.
- Be candid. For all those actions and drama created by the customers that is evident and provable, state it unemotionally and with as little accusation as possible. Deep down, people know their faults and although they may not admit them openly, they will recognize their contribution to the problem when they are described back to them in a reasonable manner.
- Suggest alternatives. Be helpful and suggest a competing product or service that may a better fit and tell the customer why. Do not use this as an opportunity for sarcasm, be genuine in the approach.
Adhering to these rules will disarm the customer and make it difficult for them to accept any other conclusion. Most professionals, albeit at times without tact or maturity in their dealings, are honest people. Dealing with them in a rational manner leaves them very little negative information to forward on to other potential customers.