You've done everything you can, but it's not enough. That irate customer standing in front of you isn't going to budge until you refund his money, formally apologize to his wife and three closest friends, buy him a trip to the Caribbean, and fast for two weeks out of penance for your sins. He's already created a Web site devoted to slamming your company, and he spends his afternoons handing out leaflets outside your store, warning passers-by of your "unfair business practices." Do you automatically hand him the world just to get him out of your face?
Your sales and marketing classes told you that the customer is always right, but if you've been in business for any amount of time, you know that some people are never satisfied. So when is letting customers go a better business decision than bending over backward trying to please them?
"The customer is always right up to the point where the costs to serve them exceed the return," explains Mike Lauricella, program manager for Small and Medium Business Communications at research firm The Yankee Group. "If a customer is trying to take advantage of you, there is no choice but to say no. That customer will either respect you for standing your ground or leave. If they leave, they weren't worth having to begin with."
Turning away customers is always difficult, but it's especially tough now, considering price-sensitive consumers have more options and expect better service than ever. Thanks in large part to Web communities, chat rooms, message boards and the like, consumers are more informed of their choices and are better able to communicate with each other. Indeed, the Web has boosted consumers' sense of entitlement. If the customer wasn't always right before, he or she certainly feels that way now.
And while large companies can afford to appease problem customers, the Catch-22 for entrepreneurs is that most can't afford to buckle to consumers on a large scale or turn away individual clients. "It's a learning process," says Rickey Gold, president of Rickey Gold and Associates, a Chicago-based marketing communications firm. "Initially, you're so excited to get work, you might take stuff you wouldn't normally take-especially with the economy the way it is now-but when you're more established, you can start turning away problem customers."
The advantage for you as a business owner is that you can deal with problems on an individual basis. Your competitive advantage is the personal attention you're able to pay clients. Make customers feel valued. Always listen to complaints, then suggest alternative solutions. But in the end, remember that losing one problem customer isn't going to make or break your business. If nothing else, getting rid of that one bad apple will save you the valuable time and energy better spent on pleasing good customers.
"Be comfortable with what you're feeling and seeing, and know when to say no," says Gold. "If you see there are unrealistic expectations or you have a feeling you're not going to be able to satisfy them, let them go and cut your losses."