As a marketer and writer you’ll notice that the vast majority of my articles deal with connecting with your customer and doing everything possible to provide them with great solutions that enhance their life or business.
I have almost never spoken about how to handle ‘the customer from hell’ and preserve your public image. However it is a necessary part of business.
It is sad, but you’ll always find someone out there who is so focused on getting an all time bargain that they’re quite prepared to see the supplier go bankrupt in the process.
It seems that difficult conditions bring out the best and the worst in people and over the past few months I’ve heard of some real humdingers.
Here are some suggestions as to how to handle those customers whose mission in life seems to be to take their suppliers for whatever they can get.
Let’s face it, we all love a bargain. Consumers and businesses alike. When you face increasing pressure to drop prices and increase value what do you do?
First of all, take a good look at your customer base, it could be that you’ve been concentrating your efforts on a marginal market. Who are your best customers? Who supports you the most? Who believes in you and is prepared to pay a fair price for value? It’s those types of customers you need to profile so that you can attract more who have this mindset rather than spend time and energy courting those who will leave you for a competitor at the drop of a hat.
Usually I find that the ‘bargain-at-all-cost’ customers are the minority. They are the ones who take the most time and effort to cultivate and bring in the least profit. When you’re faced with a customer who’s bent on beating you down, your best policy is to restrain your impulse to react in anger, or to find some way to accommodate them that will hurt you in the long term.
I’ve found it much more effective to explain to this type of customer that by cutting your prices to such an extent they will eventually be the loser because
- you are unable to provide the level of service to which you are committed – you simply have to increase your turnover in order to stay in business and thus, the customer suffers in the end
- you provide a product / service which offers fair value at that price
- you provide a guarantee / warranty on what you sell and therefore must be able to maintain your organization in such a way as to be able to offer this long term
- competitors offering lower prices are able to do so for the following reasons:
- they may be offering a lower quality product / service which may well not compare point for point with what you offer
- they may be offering a loss leader to gain market share and the customer will soon discover that the rest of their prices are higher to compensate
- some unethical suppliers use a tactic known as ‘bait and switch’ which essentially means that they supposedly offer a product you want at a very low price, but, when it comes time to buy, you discover that you actually need a far more expensive product to do the job – or that you are required to pay extra for essential features.
I have also found that many of the die-hard bargain hunters are wont to complain bitterly about job losses at home due to lower costs of off-shore outsourcing, so I will often mention that paying a fair price for fair value helps keep jobs at home.
I will often end my argument by assuring the customer that you are not ‘ripping them off’ and are working hard to offer them the best possible value at the best possible price.
At the end of the day, the customer will make up their own mind as to whether they will stay with you or not. At times, their demands are simply fueled by the need to let you know not to take them for granted. Those who are 100% price driven are usually not the kind of customers who will be with you long term anyway.
Giving customers this type of explanation allows you to courteously deal with the issue, maintain your dignity, as well as theirs, and keep the door open for those who initially opt for lower prices only to be disappointed later.