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How to Deal With 7 Types of Bad Customer

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John Norton - Expert Author

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Customer Service

Professor Merlin Stone the leading expert in customer management, identifies seven types of bad customer.

Here we briefly look at each of these types of bad customer, and consider what can be done to nullify the drain they place on the resources of small businesses everywhere, by encouraging them to go elsewhere or by getting them to pay for their bad habits.

Late Payers

Youíre not running a bank and nowadays there is much more acceptance of businesses which donít offer credit terms. See if you can change your payment strategy to take payment in advance or automatically from customers, at least until theyíve earned the right to a credit period. Increase your prices for bad payers or charge interest or a penalty fee.

Unpredictables

These characters cause you extra cost by changing their mind at the last minute, or wanting something done differently with every order. Think about whether you can keep records which will let you second guess them, or if possible charge them more by having a range of optional extras which cover their needs.

Irresponsibles

If you run an internet shopping site you know these well. They return most or all of what they order every time. Try to educate all of your customers on the costs of additional services such as order returns, or penalise wasteful customers by making returns or order changes expensive.

Complainers

Firstly ensure you have an excellent customer service regime and put right any genuine complaints quickly and effectively. Make sure though, that you keep records of complaints, and once you identify a persistent moaner take appropriate action to charge them more or encourage them to shop elsewhere. Remember the longer they shop with you the more chance they have to spread bad press to their friends.

Low Spenders

Whilst you donít want to discourage this group, you do want to identify them so that you can avoid putting too much resource into them. Remember that some low spenders will go on over time to become prime customers, which is why banks put up with students for 3 years, hoping they will go on to become high earners. If you have a group like this, monitor them separately so you can encourage their development over time.

Fraudsters

Wherever possible make sure that you investigate your customers as appropriate. If you can share data within your industry or by using a reference agency you should do so. At least ensure you are keeping records which let you monitor customer patterns and take action if you see what you suspect to be fraudulent activity.

Low Responders

Donít waste your marketing budget on these customers. If they never respond to mailers, or take up their vouchers, spend your promotional pounds elsewhere.

So by keeping accurate records of your customersí activity and spending habits, you can take action to make sure that your resources are not wasted on your bad customers, so they can be used to encourage your good ones.


About the Author

John Norton, is a senior business and finance professional with a big four, blue chip, software and technology background, and board level leadership experience in finance, IT, operations, customer service and general management.

He is owner of No Worry Web, which creates and manages small business web sites and social media presence, for an all-inclusive monthly fee. For further details see www.noworryweb.co.uk or call 0845 5191 275.

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Article Published/Sorted/Amended on Scopulus 2013-07-29 13:08:20 in Marketing Articles

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