Online sellers, including business-to-consumer retailers and business-to-business wholesalers, need to occasionally fire a bad customer, if for no reason other than to benefit good customers.
In ecommerce, a bad customer can cost your business money, time, and energy that would be better invested serving better customers.
Happy and loyal customers might spend as much as five times more than a new customer on each purchase and will almost certainly spend more over time. Plus, your good, repeat customers will also tell others about your store, spreading positive word-of-mouth that will lead to even more sales.
Identify a Bad Customer
Not every customer who returns an order, complains about your website, or even calls you can idiot is necessarily a bad customer. In fact, these customers — call them complaining or challenging — might actually be some of your most profitable.
Zappos, which is famous for its stellar customer service, says that its best customers (in terms of return on investment) are often those customers who have the highest return ratios. And customers that point out weaknesses in your site design or order fulfillment can help you streamline your processes, to improve.
Bad customers are not necessarily customers who complain or return products. They are the customers that drain your business of resources or harm your business reputation. Often they will not have a legitimate complaint or concern, and, frequently, they will try to get something for nothing.
I offered an example of a bad customer in an article I wrote in 2013, “5 Things I Wish I Knew Before Opening an Ecommerce Business.”
I’m aware of a retailer that recently started processing an order for a closeout item, only to discover that the product was damaged and not worthy to be shipped to the customer. Although the item has sold for less than the retailer’s cost because it was discontinued, a store representative contacted the manufacturer, which was no longer making the item, and even tried to find one at competitors’ online stores, only to learn that there simply were not any more to be had. The retailer contacted the customer, explained what had happened, and offered a $50 gift card for her trouble. The customer — in response — yelled profanities over the telephone and placed a visceral message on the retailer’s Facebook page. At one point, she even asked the retailer for $1,000 in damages.
This woman was a bad customer.
The retailer might have been going well beyond what one should normally expect. But the customer responded with an attitude of entitlement. It was the retailer’s duty to sell her just the product she wanted at the price she wanted. She was also vindictive — slandering the merchant. She is the sort of customer you fire.
Although there may be no end to bad behavior, you can classify three types of bad customers that your ecommerce business should fire. And one of these will likely stand out more than the others.
The cheater is always looking for a way to cheat the system, and get more — a bit more product, a little more discount, just a little more.
Here is an example to help describe a cheater.
First, it can sometimes make sense to ask a customer to simply keep an item rather than have that item shipped back to your warehouse. This is usually the case with relatively inexpensive products that cannot be resold or return to the manufacturer.
Imagine a product like dog treats. Your wholesale cost is $3.75. You offer free shipping, which is $5.35, and you offer free, albeit slower, return shipping that costs $4.00. So if you refund your customer and accept the return, your loss is $13.10. But if you refund the customer and tell him to just to keep the dog treats, your loss is only $9.10. You saved $4.00.
|If Returned||If Not Returned|
|Cost of Free Shipping||-$5.35||-$5.35|
|Cost of Return Shipping||-$4||$0|
|Loss to Your Business||-$13.10||-$9.10|
When you provide this sort of service to a good customer, that customer will often respond with praise and loyalty. A bad customer might act differently.
One retailer had this very problem when a woman ordered two bags of dog treats. Then shortly after placing the order, she used the retailer’s website to initiate a return. She said in her message that she’d found the treats at a lower price on another site. The retailer’s customer-service person ran the math, refunded the order, and told the customer she could keep the dog treats which had already been shipped.
This bad customer then ordered more dog treats, waited a couple of days, and requested a return. The retailer responded just as before. A month passed and the customer ordered dog treats a third time, waited a few days, and initiated a return. For a third time, the retailer simply told her to keep the order. But this time, the retail also fired the customer, canceling all subsequent orders.
The abuser is the bad customer that rains profanity, insults, or even innuendo on your business and your customer-service representatives.
Be careful to remember that not every customer who calls you an idiot is a bad customer, and not every customer who uses profanity is necessarily a bad customer or a bad person. But you do not need to accept abuse and you cannot allow your employees to be abused.
This customer will have unreasonable and unachievable expectations that your business will only fail to meet. What’s worse, this bad customer will do her best to call every perceived shortcoming to your attention because she “cares about your business” or “doesn’t want this to happen to someone else.” She may also frequently talk to you about what is “fair.”
Here again, you’ll need to be careful, since a complaining customer can also be a valuable customer. The difference is subtle.