Customer Service – at what cost?

Or, at what point do you fire your customer?

This is not meant to be a provocative or even rhetorical question. It’s a question worth pondering for anyone that is in a customer facing role in an organization, or has the power to make decisions about how the company works with their customers, prioritizes them and assigns resources for them.

I run a marketing services company where the customer (pardon the cliché) really does come first. And second and third for the most part. We live by the principle that our reputation is paramount to our success, and that our customers determine how we are perceived, while helping us pay our rent of course. This translates into a philosophy across the team to do whatever it takes, go above and beyond to satisfy our customers’ requirements, albeit unreasonable sometimes.

A case in point is on a project where we were facing a tight deadline with a particularly challenging customer. Right around the due date we had a terrible winter storm in Seattle where we are based out of, with unforeseen snow that brought the city to its knees (doesn’t take much in Seattle where we don’t see much snow at all). As a result, our offices were forced to stay shut for a few days preventing our design team from coming into work at the office to complete the work required. The client however, would not hear of it and despite being also shut in at home by the weather would not extend the deadline. To keep things moving, I personally drove to the office in a borrowed 4×4, picked up one of our designer’s desktop machines complete with accessories, packed them into my trunk, and slipping and sliding, made my way to the designer’s apartment in Seattle and equipped her to get the work done. You’d think the client would be appreciative of the effort put into meeting their deadline but instead, we were still raked over the coals on that project. The trend continued for a while longer and it was nigh impossible to win his trust and confidence and perhaps most importantly, his respect. He turned near abusive with our staff until finally we ‘fired’ him.

The costs of not firing the customer early enough included a blow to morale of the team, a perception that management was not as supportive as they’d have liked us to be, and a huge drain on resources that were expended trying to make one impossible customer happy, potentially at the cost of servicing other more deserving customers at the same time.

Of course, there was a certain almost measurable financial loss as a result, especially when you consider the lifetime value of a customer and associated revenue streams. As a small company this was not a trivial amount which made it a harder decision to make. In hindsight though, we should have fired him a lot earlier when there were several signs that we ignored such as the lack of respect for our staff, the inability of the customer to understand what it took to do their work and empathize with our efforts, a lack of appreciation for the work that was done well and a failure to communicate well in general.

To net it out, companies need to be sensitive to how far they want to take their customer service standards and principles. If you’re in a services business like we are, the bar is pretty high indeed as the competition is waiting in the wings, glad to pick up anything you may let fall through the cracks. But as illustrated here, the costs of keeping difficult customers often will outweigh the benefits both in the short and long term. If you see the warning signs then act quickly and transparently internally so that your team understands what you’re doing and why. With the customer, there are a number of ways of firing them without effectively burning your bridges or even letting them know that you’re letting them go. You could just raise prices to an artificially high level, or not sign up for any timelines they need or tell them you don’t have the capacity to meet their needs. Or if you are in a position to, you could just have a candid dialog with the customer and tell them clearly that you find it too challenging to meet their expectations and that it may be best for them to work with another partner.

Your staff will thank you and respect you for it.

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