In the December issue of Harvard Business Review, Denish Shah and V. Kumar made the case for why cross-selling to problem customers was a money-losing proposition. These problem customers, their analysis shows, put too much demand on the organization. They call the customer service number too often, complain too much, and ask for help on things like online banking when that should be self-service.
The irony, of course, is that the very companies who now have the burden of these customers are the ones who marketed, discounted and targeted them at the start. They sent catalogues, locked them into multi-year contracts, and then became thoroughly annoyed when these customers had the audacity to use the services for which they thought they were paying.
The problem with problem customers is they are, indeed, a problem. There are certain customers who make a practice of returning items to stores to try to game the system and cheat the retailer. Other customers will rely on the friendly customer service rep at the end of the 1-800 number for basic instructions they should be able to decipher on their own. There is no doubt they are, well, problems.
But what does this mean for companies who are focused on increasing customer loyalty, and the benefits it can bring them? After all, cultivating your loyal customer community can bring in more revenue, reduced costs and even higher prices.
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Back in 2007, Sprint made headlines by sending “Dear John” breakup letters to 1000 customers. They were problem customers, and Sprint told them so. But it makes me wonder, what could Sprint have done to not only keep these customers, but make them profitable? (I’m sure there are some that are just out to be annoying…but I don’t think most humans operate that way.)
- Problem customers are often defined as those who call the Customer Service line too often. If you look at the comment about the Sprint debacle here, you’ll see many customers asking what to do if they have the same problem over and over. If you are overbilled as a customer, often it takes several calls to rectify the situation.
- Other customers don’t use the online self-service features as they should. If banking customers are (heaven forbid) walking into the bank and bothering tellers, why not charge for that, as Bank of America does to its online customers?
- The Harvard Business Review article highlights all the ways customers cheat the companies, but doesn’t really account for the times the customers are forced to call or frustrated by the processes.
Before dumping customers, calling them problems, and waiting for the inevitable public backlash, why not take a magnifying glass and examine that part of your customer experience? Is there anything proactive you can do to make the experience better, even for those who are the outliers? A few thoughts on approaches I’ve seen that can work:
1. Make sure you are getting the right feedback from the customer service reps. Frustration has a way of bringing out the worst in people. Customers are guilty of being rude, inappropriate, and mean. It’s difficult to hear past the curse words and understand what’s really bringing this on. Really pay attention to patterns. In one case I witnessed, the over-complicated process to retrieve login information caused more cuss words than anything else. Identifying what the broken process was allowed us to redesign and test it the right way.
2. Communicate and communicate again. I’m not talking about pages of letters informing customers of yet another fee increase. I’m talking about proactive communication about ways to make things easier. Don’t wait for the customer to NEED to know. Help them know what they need to know before they need to know it!
3. Think like a human. It’s not a surprise people don’t like when they are suddenly overcharged or told the way they WANT to do business with you isn’t allowed. If you wouldn’t like it, your customers won’t, either.
I realize I’m oversimplifying things some here, but what if we approached customers like, you know, people? What if we valued loyalty and rewarded it with some understanding? I would argue by dissecting the real problems and improving the customer experience for a few, you actually improve it for many. And by doing that, overall loyalty will increase and you won’t HAVE to break up with customers. Alas, I know this viewpoint is naive, but I hope it can be so.