If they are dishonest
- Most people are basically honest, but even the best of us can succumb to temptation. Are you making it too easy for people to act criminally? Is your security tight enough? Are your terms of business crystal clear?
- Inevitably there will be a tiny majority who will act criminally come what may. It never looks good to start legal action against your own customers – even dishonest ones. Often a word in their ear can be sufficient to dissuade them from further dishonesty. Or you may simply choose not to do business with them. But, before you call in the boys in blue, remember, legal action can be costly and you can lose even the most watertight case. Use it only as a last resort.
If they are mistaken
- The first rule of customer satisfaction is to always assume your customers are telling the truth. Does your staff trust your customers or are they making a meal out of your returns policy/customer support and back up?
- One of the most common forms of customer 'error' is late payment. Do you make it as easy as possible for people to pay?
- Is your product as simple to use and reliable in its functions as it could be? Budget airline Easyjet saved a small fortune when it stopped putting its phone number on the side of its planes and started putting its website. The simpler and better made the product, the fewer costly queries you will have to deal with.
- And are you explaining your products and services properly? Have you tried following assembly instructions or technical instructions yourself? Are they really idiot proof or are they unnecessarily/unfeasibly complex? Can they be simplified?
If they are unprofitable
- Profitability means making lifetime revenue exceed costs to serve. If customers are unprofitable, your options are to sell them more or reduce their costs to you.
- You can increase lifetime value by locking customers in with loyalty programmes and other service incentives.
- Many high-cost customers are not even aware that they are high-cost customers and certainly don't want to be viewed that way. Often all it takes is training and education to turn them into low-cost customers.
- Try to 'migrate' unprofitable customers to new terms of business. For instance, you may start charging light users for help lines or withdrawing privileges from certain groups of customers.
- In the end, though, sometimes you just have to tell people that you can no longer do business with them. One US utility company recently increased profits by nearly a million dollars a year by 'letting go' thousands of unprofitable customers.
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