Posted 08-04-2008
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Conclusive Advice
by Stephen Cuff

Is the customer always right?

I hate the saying for a number of reasons

1. It is a generic statement that is not always true.
2. It misleads staff and sales people.
3. People don’t believe it anyway.

What you can say for sure is the customer is a customer. You can’t even say that the customer is always the customer because some of them you actually should get rid of. Some customers are so much hard work that they become unprofitable.

What you should have are some clear guidelines of what represents a good customer for you. To find this out, the first broad question is:

What do customers do?

1. They pay money for your product or service.
2. They receive the product or service.
3. They use the product or service.
4. They buy more of the product or service.
5. They have friends and contacts that they might talk to about you.

They really are not a customer until they have paid (at least the deposit).

So the next question is:

What are the good, bad or indifferent ways that they do the things they do?

1. They pay money for your product or service.

Good: They pay what they should, on or before the due date.

Indifferent: They partially pay or fully pay, but are late in paying and need to be reminded.

Bad: They refuse to pay or need to be chased up to the point where it is simply costing more money to chase than it would to simply write off the money as a bad debt.

(By the way, you can have your own definitions for these things, but these generics can give you a starting point).

2. They receive the product or service:

Good: They take delivery of the product or service as agreed, on time and under whatever conditions or terms of trade have been specified.

Indifferent: They are not reliable at delivery time and some of the terms and conditions are debated or refuted.

Bad: They send a perfectly good product back due to some whim or change of mind. (You can think up some more like this.)

I could go on regarding the final points, but you get the idea by now. 

This is not hard to do but you still need to do it for your business.

The final stage is to set acceptable limits for the Bad and Indifferent points so that you can discontinue your service or selling to those customers who represent more cost than they are worth, and you thereby free up your time to increase your service for your good customers and increase your chances of retaining them and also getting good quality referrals from them, to similar good customers.

As a broad generality, good people tend to congregate with each other and do business with each other. Bad people tend to hang with people like themselves.

So, if you are worried about a bad customer spreading bad news about your business to others you have little to fear. The truly bad customer hangs with others of the same kind and you want to repel those types anyway.

 

Stephen Cuff is the Managing Director of Conclusive Consulting Group, specialists at increasing the productivity of organisations and individuals. Coaching, consulting, mentoring, planning, implementation of business success frameworks. Contacts: www.conclusive.com.au or call 0413 049 070. Free subscription to monthly tips e-news also available.

 

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