When is it time to dump a customer?

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We’ve always heard that “the customer is always right.” Why, if I look back at old blogs, I undoubtedly wrote those words, too. But when I did, I was wrong. The customer isn’t always right — or good for business.

Heightened by the agonizing recession, we’ve been forced to put extra emphasis on customer retention and satisfaction. But in doing so, have we been blind to the fact that there are times when good business says we should walk away from a customer? Here are some things to seriously consider.

Every dealership has mostly good customers — and a few others. When the best attempts have been made to address a customer’s complaints and that customer still isn’t happy, it’s natural to feel compelled to go “the extra mile,” adding more time, perhaps free products, more service and manpower to try to placate the customer. When that still doesn’t get it done because the customer is a serial complainer, is it time to say “it’s best we don’t do business anymore?”

It’s just good business. To be pragmatic, every dealer has limited resources available to add extra manpower, products or services. It’s clearly not good business to use up those resources on customers who never seem satisfied. After all, customers who are always there, but repeatedly cause problems, aren’t loyal — they’re abusers.

In addition, a dealership’s employees are an important part of the equation. Every dealership’s goal is always satisfied customers, of course. Everyone on the team should support that philosophy. However, putting “the customer is always right” above all else really means siding with the customer over employees by default. That’s destructive.

In his book “Happy Hour is 9 to 5,” Alexander Kjerulf puts forth the idea that happy employees lead to the best possible customer service. “Believing the customer is always right is a subconscious way of favoring the customer over the employee, which can lead to resentment among employees. When managers put the employees first, the employees will then put the customers first. Put employees first and they will be happy at work,” he asserts.

Put another way, backing up employees whenever possible is good policy. Respect their judgments and views and, when faced with siding with the employee or an unreasonable customer, always choose the employee.

To be clear, there’s no suggestion here that anyone quickly gives up trying to resolve a customer’s complaint. But a customer who consistently brings problems triggers a different consideration. In the larger business picture, it’s worth asking if repeatedly trying to please a customer who can’t be satisfied is a good business decision?

Cutting ties with such customers does have another benefit, according to Bill Gates. He contends that customers that are unhappy are a great source of learning what might be done differently to avoid a similar problem. That said, it’s still best to walk away from that customer.

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