Problem Customers: How To Deal And When To Cut Ties
Savvy business owners know how much easier it is to keep a client than to acquire a new one. However, every building service contractor has had what might be considered problem customers: those that don’t put time, effort or respect into maintaining their end of the business relationship.
Whether it’s with excessive complaints, refusing to pay or being consistently tardy with payments, or an overly demanding attitude, a small percentage of customers prove to be more of a hassle than an asset by draining a BSC’s resources. The hard truth is that occasionally, a contractor may have to make the difficult decision to sever a business relationship.
If BSCs are in the start-up phase, they may decide that for now, the cash flow is worth the aggravation. But established businesses have bills to pay, and greater expectations about their own performance. The entrepreneur, his or her family, supervisors, and front line staff can suffer quietly for months or years as a difficult, demanding, and even abusive customer erodes resources, confidence and morale before a “last straw” event brings the situation to critical mass.
No one plans for these types of situations, yet they inevitably occur at one point or another.
Can it be saved?
Taking a proactive stance on customer satisfaction should be the first line of attack. If BSCs are in a questionable relationship, the challenge is to turn the situation around by taking an interest in satisfying their needs, and hopefully even making that customer their biggest fan.
That was the case for Thomas Stavro, president of the retail division for ISS Facility Services, a BSC in Tarpon Springs, Fla., with 10,000 national employees. He says that in 30 years he has never had to walk away from an account. His four-phase client satisfaction plan, developed after a point-by-point analysis he conducted to remedy an unstable client relationship, now helps protect that track record.
The plan consists of improving synergy with a new liaison on the account, conducting constant employee reorientation and training, discerning improvements and implementing the resolution process, and following up by meeting frequently and consistently with the customer.
“Now I’ve got a closed loop,” says Stavro, adding that with that initial client, he reached phase four within a timely 90 days. Upsides to the plan have been greater continuity with internal practices and customers, and added efficiencies and effectiveness across the board.
“The formal training process keeps the team fired up, has enhanced everybody’s relationships, and has reduced costs because we’re more effective doing what we’re supposed to do, and not putting out fires,” Stavro says.
“It’s extremely humbling,” he adds. “I’m highly competitive, highly passionate, and never want to lose. I’ve learned that if you shut up and listen, the answer is there. In six months, we took that account from questionable to stronger than it’s ever been.”
Bradley Edstrom, owner of Whistle Carpet Cleaners, Superior, Wis., has also turned troubled accounts into loyal customers.
“Keep talking, build the relationship with them, and solve the problem,” he explains. “Then they become your best friend.”
Edstrom considered canceling a government account when the key contact became a chronic complainer: knit picking and insisting that he wasn’t spending as much time on the job as he should.
“I went out and bought ISSA’s cleaning specifications on CD for calculations of time and energy to clean specific spaces, but she still didn’t get that I could do it in 1.5 hours,” says Edstrom. Stretching time spent there to three hours per day, per her expectations, wasn’t an option in his mind, based on the amount of money he was receiving.
He rescued this relationship not by putting in more hours, but by putting two people on the job instead of one, which made for higher visibility, and greater perceived value. The personnel selections also eliminated turnover — which turned out to be one of her hidden objections.
“Try to find out what the real problem is, not the one on the surface,” advises Edstrom. “Not moving a piece of furniture back on the right spot might be the problem but that’s not what they say. Or they’re vague. Interview the client about what the problem is, in order to solve it. I now have a meeting with her once per month. We do a walk through, and she’s having a harder time finding things that we’ve missed. That’s a statement of improvement of performance.“
But sometimes, enough is simply enough. For founder and president of Milwaukee-based Eagle Enterprises Ltd., Rick Gottheardt, that time came during the first quarter of 2008, when he let a client go that was a bringing in over $10,000 per month. Even after many months of frustration, it was still a highly emotional decision.
“The customer was not forthright in telling us what he wanted completed,” explains Gottheardt. “After we priced, he said, ‘You have to throw this in, and this, and this.’ He’d call my salesperson, who would come to me and say, ‘What do we do?’ You can try to negotiate your way out, but if sales has trouble selling the price you want to begin with, chances are you won’t get more money. I offered to give them a major credit on the bill, and that didn’t phase them either.”
Push finally came to shove when the client began literally yelling at Gottheardts’ staff in public, and his saleswoman returned to the office near tears.
“After I calmed down I wrote a letter, and then rewrote it four, or five times over the course of a week,” says Gottheardt. “In the first couple letters I was very angry, and it came across in a cutting, personal way, so I toned the rhetoric down, and admitted we had made mistakes, but that with his unprofessional dealings the situation was beyond repair. I left it at that, and said, ‘We won’t leave you high and dry, we’ll stay until you find a replacement.’”
Some contractors may feel giddy after removing themselves from a client like this one, but Gottheardt says he experienced a huge sense of loss, even though he had no contract to void, didn’t have to downsize his staff, and at 15 years in business, was well-established.
“It’s very traumatic to someone like me who has invested everything. When the decision was made, I felt sick. I was depressed for a week at least, after I sent the letter,” he says.
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Smart Podcasts For The Commercial Cleaning Industry
While any customer can become troublesome in time, certain clients should be passed over from the start. Dick Dotts and Carole Thorsell of DMS Facility Services explain why in the podcast, Avoiding Problematic Customers.
Lauren Summerstone is a freelance writer based in Madison, Wis.
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