The ‘ABCD’ concept of 4 different types of customers is pretty well known:
A – Awesome
B – Basic
C – Can’t deal with
D – Dead
Everybody knows that, at the top of the scale, businesses should do all they can with their customer service strategies to nurture the A customers, to make sure that they never leave. These are the real foundation of the business, and every effort has to be made to retain their business. Systems need to be put in place to ensure that the A customers never feel neglected, and, in fact, always feel special.
The B’s – well, businesses try their best to convert them into A’s. They are also important, and need a fair amount of attention.
The C’s are problematic, and probably give more trouble than they’re worth. And yet – we always live with the hope that they will improve, and become, if not A’s, at least B’s, and provide value to the business.
But it’s the D’s that give the most trouble. Yes, we know they’re dead, and don’t really provide value to the business. They complain a lot, they don’t pay their accounts, they buy only when there are specials, they make returns, and they are generally very small, and expensive to service. In short, they’re a pain in the butt, and every book will tell you they should be told that their business is no longer welcome.
But very few business owners have the courage to tell the D’s to take their business elsewhere. The excuses are many and varied. They represent too much turnover to lose. Kicking them out will alienate too many people, and attract bad reviews on Google and Facebook. And so the D’s remain on the books.
But by remaining as customers, the D’s are doing damage. Let’s look at a couple of examples.
D customers – Reducing Small Business Profit
In our town, there were 3 pharmaceutical wholesalers – our company and two others. The two others were large, and had a good list of A’s and B’s. Our company was small, and had a small number of A’s, and a long list of D’s. The D’s were generally the A’s of the other two, who used our company only when the others were out of stock. Their purchases were small, they were expensive to service, they were a pain in the butt – but their combined purchases represented a fairly large proportion of our company’s turnover.
The management of our company was advised to stop servicing these D customers. They resisted mightily. They would lose too much turnover, they said, and they would alienate all the pharmacies in town. There was too much to lose.
Eventually they were “persuaded”. They closed all the D accounts.
All hell broke loose. The pharmacies in town were incensed. The other two wholesalers were incensed. The turnover of our company plummeted, and the management went into hiding.
Then a strange thing happened. The other two wholesalers accepted that our company had made a smart decision, and expressed admiration to them for having had the courage to do the right thing.
But most importantly, our company’s profit soared. They were able to give their A customers more attention and love, and they were able to manage their stock much more effectively without the pesky D customers depleting their stock whenever the other two wholesalers ran out of stock. As a result, the level of service to the A customers improved to such an extent, that turnover soon reached the previous level. And without having to service many small D customers, the expenses dropped like a stone.
Kicking the D customers out works. It allows the business to run better, A customers get more attention and better service, and expenses are reduced.
Will you have the courage to kick your D customers out?
D Customers – Ruining Small Business Ambience
Sometimes, D customers do damage by ruining the character of a business. They may spend money, but by behaving badly, they keep away the kind of customers the business was courting in the first place.
Dining establishments are taking action against diners behaving badly. They found that diners were using iPads during dinner to watch anything from the footy to Married at First Sight, and a bunch of diners yelling at the iPad when they didn’t like the referee’s decision was ruining the atmosphere. Kids using crayons to colour in, and people moving cutlery around to take pictures of the food, was interfering with the service. Some patrons had the cheek to smuggle in MacDonald’s, and left chewing gum under tables.
Some dining establishments are fighting back, and have banned iPads, crayons, colouring books and building blocks that made the tables look like an arts and crafts center. They don’t allow people to take photographs, and refuse to entertain the so-called “food influencers” who demand free meals so that they can post critiques on Instagram.
When they banned iPads and other entertainment for kids, there was an uproar. But the owners of these dining establishments had decided that these were not the customers they wanted. And the result? One owner says that his restaurant has been “busier than ever” since the ban. Parents are delighted that he’s made families engage with one another at dinner, and the customers they’ve lost are “not the customers we want anyway”.
The message is that not all customers are good for business. The money they spend is preventing other, better customers from using the facilities.
D customers are truly dead customers and should be shown the door. It takes courage to let them go, but practice has shown that it works – it allows the business to attract more A customers, and to grow in the right direction. Want to put customer service strategies in place that will get you the customers you want and that are much better for the business? Book a chat with Lex Tannenbaum today