Successful small business owners recognize that customer satisfaction is one of the essential elements of organizational prosperity. After all, providing quality service that clients appreciate not only ensures repeat business from them, but also encourages future "word-of-mouth" sales. But virtually all small business operations will sooner or later encounter customers who prove troublesome in one respect or another. Customer service experts counsel small business owners who encounter this situation to: 1) determine whether the difficult customer actually has a legitimate complaint; 2) determine whether the business can take steps to mollify the client's concerns (regardless of their legitimacy) and improve the relationship; and 3) in cases where the customer is being unreasonable, decide whether the customer's value is sufficient to warrant continuance of service.
In most industry sectors, the vast majority of customers are fairly easy to work with. They understand the basic rules of commerce, in which they pay your business an agreed-upon amount to render a service or provide a product to them under certain terms that are also mutually agreed upon. But a minority of customers—experts place the number at anywhere from 5 to 10 percent—qualify as difficult. Sometimes these customers seem more prevalent, however, simply because they can take up so much of a business's time and energy.
Nonetheless, small businesses need to learn to differentiate between truly difficult customers that are ultimately of questionable value to their operations and those customers that may be annoying for one reason or another but who are ultimately solid, valuable clients worth keeping. Often, the difficult customer is someone who has simply taken an annoying habit to an extreme. For example, Richard F. Gerson, author of Great Customer Service for Your Small Business, listed ten types of customer behaviors, only one of which—The Perfect Customer—was wholly desirable to the small business owner. But the others—customers that are "know-it-alls," unduly dependent, argumentative, indecisive, chronic complainers, monopolizers of time, etc.—sometimes comprise the majority of customer types. These are the individuals that your establishment depends on for long-term success, and as long as their quirks do not become formidable obstacles to business transactions, your business should continue to do its best to satisfy them. It is when these and other characteristics become excessive that the small business owner needs to intercede and decide how his or her business will interact with that customer—if at all—in the future.
Customer service experts contend that many difficult customers are behaving in that manner because they have a legitimate gripe with the product or service that they have received. Indeed, the chances are very good that a poorly run business operation is apt to encounter a far greater number of so-called "difficult" customers than will an establishment that is efficient, competent, and dedicated to ideals of customer service. "Many 'bad' customers are the result of a bad situation," stated Jenny McCune in Nation's Business. "A salesclerk is surly; your company doesn't respond quickly enough to a request; a product defect ruins the customer's day; or an order promised for Wednesday doesn't arrive until Friday."
Small business owners and managers, then, need to determine whether the customer has a legitimate complaint before taking any other action. The client is obviously the individual that is best equipped to explain the reasons for his dissatisfaction, so he or she should have a full opportunity to express the grievance. From there—provided that it is determined that the customer was poorly served in one respect or another—the small business manager should gather all the pertinent facts from his or her staff to determine where the error occurred and to figure out how best to mollify the client and prevent the problem from occurring again. If the customer—who, after all, may have provided a service to your company by alerting it to an operational weakness or personnel problem—is convinced that you are genuinely sorry for the slip-up and genuinely interested in solving the problem to his satisfaction, preservation of the business relationship is often possible.
In addition to making apologies and moving to address problems in performance, small business owners can take several other steps to improve their relationships with difficult customers. For example, firms that take preventive measures—such as regular inquiries into customer satisfaction—are often able to address minor grievances before they erupt into major spots of contention. Instituting such proactive arrangements gives businesses the opportunity to prevent attitudes that eventually grow into problem attitudes from ever taking root.
There are occasions, however, when even a company's best efforts to address or anticipate customer complaints are fruitless. In other words, a small but significant percentage of customers that your business deals with may prove to be extremely unpleasant, no matter what measures are taken to satisfy them. Few businesses are exempt from this reality. After all, the convenience store owner confronted with a disruptive customer is essentially grappling with the same problem as the owner of a small manufacturing company who is treated shabbily by a corporate buyer. In both cases, the business owner is dealing with a customer/client who makes conducting business a distinctly unpleasant experience.
When confronted with difficult customers who appear unlikely to change their stripes, then, small business owners have to decide whether their business is worth the aggravation. Several factors should be considered:
Impact on Business. This is generally the single most important consideration in weighing whether to continue doing business with a difficult customer. Is the customer one of your major clients? How difficult would it likely be to replace the revenue from that customer? Is the client a possible conduit to other potentially valuable customers? Is the client a major opinion-shaper in the community or industry in which your company operates? What is the nature of the difficulty? This latter consideration is an important one, say customer service experts. For example, a customer that is an indecisive or impossible-to-please sort, and whose demands result in extensive drains on your business's resources, may be far more problematic than a client who is difficult simply because he is woefully lacking in interpersonal skills. If your business can handle the loss, it is perfectly acceptable to sever ties with a difficult customer. But small business owners should do their best to end the relationship decisively and as civilly as possible. "It is impossible to please unreasonable or marginal customers on all occasions, and it's best to consider leaving them to other vendors," summarized Jack Falvey in Sales and Marketing Management. "It's far better to expend your efforts in further satisfying already satisfied accounts. The return on investment is almost always far greater."
Impact on Staff. This consideration is sometimes overlooked by small business owners, to their detriment. Unhappy employees are far more likely to secure employment elsewhere than those that are content, and few things can make an employee unhappy more quickly than the spectre of regularly dealing with unpleasant customers. Abusive treatment of staff at the hands of clients must be dealt with firmly and speedily. Otherwise, internal morale—and performance—can deteriorate quickly and dramatically.
Impact on Business Owner. Small business owners are more likely to be personally affected by difficult customers than are corporate executives, who may be insulated from such unpleasantness. And since small businesses tend to rely on their founders for a sizable share of their direction and management, the feelings of those founders need to be considered. A small business owner who approaches encounters with a given customer with dread needs to carefully consider whether such meetings are having an adverse impact on his or her ability to attend to other needs of the business without feeling stressed or distracted.
Mitigating Circumstances. Finally, in some instances there may be reasons for difficult behavior that are not immediately apparent. "Most difficult customer situations are complicated by all kinds of subjective judgements and seemingly mitigating circumstances," said Falvey. For example, changes in personnel at a client company can have a dramatic impact on inter-company relations. If the new representative is insecure about his or her capabilities and knowledge, that may manifest itself in a variety of undesirable ways. If the small business owner takes the time to figure out why the customer has suddenly become a problematic one, he or she may be able to devise a strategy to repair the relationship rather than end it.
Evenson, Renee. "How to Deal with a Difficult Customer: A Positive Solution to a Negative Situation." American Salesman. July 1998.
Falvey, Jack. "Dealing with Difficult Customers: When Customers Become Unreasonable in Their Demands, It may be Time to Cut Them Loose." Sales and Marketing Management. April 1995.
Gerson, Richard F. Great Customer Service for Your Small Business. Crisp, 1996.
Gordon, Josh. Tough Calls: Selling Strategies to Win Over Your Most Difficult Customers. AMACOM, 1997.
Kroskey, Carol Meres. "It's Okay to Fire a Customer." Bakery Production and Marketing. October 15, 1997.
McCune, Jenny C. "When Customers Are Bad Apples." Nation's Business. February 1998.
Plagakis, Jim. "Persona Non Grata." Drug Topics. September 15, 1997.
Sewell, Carl. Customers for Life. New York: Doubleday, 1990.