Column by Janine Popick, Inc.com "Female CEOs"
July 24, 2009
Here at VerticalResponse, because of the nature of our low-cost, easy-to-use e-mail marketing solution, we tend to cater to a lot of small businesses. We have a pretty low risk product with a free online trial. Because of this, we attract all walks of life on the business front from the mom and pop shop, to a company that has 500 employees and umpteen thousand customers.
Over the course of the eight years we've been in business, we've had to "break up" with a bunch of customers for various reasons, and you know what I've come to terms with? It’s OK. Not every customer is right for every business.
It's really all about what type of company you're setting out to be, what your core values are, and how you handle the situation. It doesn't matter what your business is -- you could be an online software company or even a dentist's office -- from time to time you’ll have to deal with an unwanted customer. I've outlined a few break-up scenarios we've gone through over the course of our eight years that will hopefully shed some light on why it’s OK to walk away.
Problem: A large retail company outgrew our services and wanted us to use our resources to develop features for them specifically, instead of giving our thousands of other customers the features they needed.
Solution: I swallowed a tough pill (the loss was thousands of dollars per month) but decided to build features for the masses instead of the one big gun that might leave at any moment anyway. We did our diligence for a few companies that catered to larger businesses and provided them a three-month window to transition.
Problem: We had a customer who continued to use our service but wouldn't pay. I gave him five months to pay with a lot of notices, both e-mail and verbally. Not only did he not pay attention, but he also lied and every few weeks told us the checks had been cut.
Solution: I gave him a two-week notice to find another provider and a harsh date of when we'd cease service. This time I stuck to it. You don't want to send the message to customers and employees that it's OK not to be paid for services rendered. It took me a while but I finally did it.
Problem: Respect for customers, colleagues, and our company is at the core of our values here at VerticalResponse. So when a customer was berating one of the team members at all hours of the day and night for no good reason, obviously I had a problem with that. We like to think the “customer is always right,” but there’s no sense in taking continued abuse and making morale diminish internally, even at the prices they were paying.
Solution: I had a talk with the CEO of that company and gave them two weeks to find a new provider. I gave them my recommendations for a company with a more "hands on" feel so that they had a team of people to go to when they needed them and sent them on their way.
Problem: A customer was violating our Terms and Conditions.
Solution: We always approach all of our issues with an open mind, but in this instance we found that a customer was obviously in violation and would never "right their wrongs." In this case they were instantly terminated, but in a friendly way.
Like I said, not every customer is right for every business. Taking on the wrong type of customer and chasing the almighty short-term dollar may or may not be good for your business in the long run. You should always think about not forfeiting the long-term growth of your business by focusing too much on what may be an unhealthy short-term customer.