Our last undesirable trait or sin, is science without humanity. Technology can be an awesome tool. We have grown incredibly reliant upon it. Have you ever stood next to a microwave oven wondering why we don’t have something that can cook food faster? Or, don’t you smile when you see two teenagers sitting on the ground perhaps 10 feet apart texting each other and wonder why they don’t simply converse?
Technology is a tool, or rather a set of tools, but it is simply that. One of the reasons customers prefer to deal with small businesses rather than larger ones is personalized service. A trend we have all noticed is that we are now customer service for most larger enterprises. Have a question about your credit card or health insurance? Dial an 800 number and go through an extensive menu of “press 1” or “press star”, and 10 minutes into the phone call, you still haven’t found the answer to your simple question. Years ago that question would’ve been answered by a representative who we would’ve reached immediately. Checking out at the supermarket or hardware store? You now have the option of a self-service lane where you could scan, bag and pay for your items. Unless you only have one or two things to purchase, you will find, however, the human cashier faster than self service.
So does this mean you forgo technology and run your business like it’s 1980? A better idea may be to treat technology and human interaction as tools to implement as needed. Some entrepreneurs offer tiers of services to customers based upon importance or revenue generated by a particular client.
For example, many businesses find that the 80/20 rule applies to customers. In other words, 80% of the firm’s revenues will come from 20% of its customers. For these customers, service should be as personalized as the customer himself desires. Some may wish to deal only with technology — e-mailing orders to you or doing a click and ship on your website — but they should always have the option of dealing with a human being.
Then, we have another group of customers, who are pleasant to deal with, are not so labor-intensive so that your business still earns a profit on doing business with them, who make up your second tier of customers. While you will still offer them the best customer service you can, they will likely receive less personalized attention than your top-tier.
Finally, we have our bottom tier. The brutal reality, that most entrepreneurs do not want to face, is that this group shouldn’t be customers at all. You spend way too much time servicing them, and they contribute little to your bottom line. In fact, if you analyzed this group of customers, you may find that you actually lose money doing business with them. Many entrepreneurs will hang on to these customers like grim death. The reasons for this are many. First, it’s ingrained in our entrepreneurial DNA that a customer is a customer and you never want to lose a customer. Second, we always feel that although the customer isn’t providing much in the way of revenue, they may in fact one day come in with that big order. The sad reality is that the small, high-maintenance customer rarely turns into the big dog. Finally, it’s hard to fire our customers. It can be awkward to cut someone loose.
Whether declining to assist someone in the first place, or terminating the relationship after one already exists, eliminating clients that you couldn’t help is not an easy task. Nevertheless, there are graceful ways to do so.
And sometimes it’s not necessarily the clients as it is the type of work you do. There may be an area of your business which is not profitable and for whatever reason it’s difficult for you to let it go. In my law practice, this was residential real estate closings, which entailed a lot of time for very little remuneration. Eventually, I got bold enough to stop doing that part of my practice. I never regretted it.
The bottom line with respect to the third tier of customers is that there are other businesses which will be able to service them, businesses that will be a better fit for that client. Law firms that concentrated exclusively in residential real estate closings did them much more efficiently than I could, and were able to give the clients good service. You may find an area of your business where certain customers may be better off going elsewhere for their needs.
Being honest, both with yourself and with a potential or current customer, and turning them down or “firing” yourself, is more humane. Moreover, the customer now has a better chance of finding a service provider that is a better fit for their needs. If handled properly, looking at clients or potential clients who don’t fit your business’ vision using the skills of emotional intelligence rather than viewing them as simply numbers clicking through your website, should afford both sides the opportunity for the classic “win-win”.