Are you more focused on conflict or cash?

Posted by in Customer Service, Marketing Strategies

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Don’t Sugar Coat
Unhappy Computer KeyThis was a valuable lesson to be reminded of.  I let go of a service provider on a project recently due to unsatisfactory performance and unreasonable rates. I erred in that I only let them know it was unreasonable rates, I didn’t want to belabor the dissatisfaction with their performance. When I’d raised the subject of poor performance a few times, they’d given me a defensive attitude and excuses. Not my style to indulge in energy zapping conflict so I simply let them go.

Threatening a Client is Never a Good Idea
They billed a final invoice and I was reconciling it with charges I’d incurred to redo work that wasn’t satisfactory.  The provider threatened legal action (I was their client) upon being notified that a portion of their balance would be withheld.  Hmm, what an interesting idea. I have a policy of never threatening my clients under any circumstance. If there is ever a need for legal action, I simply get the attorney involved, no threat necessary.

Going From Bad to Worse
They would have lost $1K but at least left on terms whereby I wouldn’t recommend them, but I wouldn’t avidly “yelp!” Alas with this behavior I will make sure that my colleagues know who this provider is, the substandard quality of their work, their propensity for over charging, and their lack of professionalism and courtesy.

Lose a Little or Lose for a Lifetime
This provider was more worried about losing a little money (because of unsatisfactory work) than losing a client and a source of valuable referrals. Have you ever made that mistake? When you look at your client relationships do you look at them as one time opportunities?  Or, do you see their lifetime value?

What’s Your Client’s Lifetime Value?
Bigger PictureYour client’s lifetime value isn’t just them either, it’s about the clients that they refer to you.  So let’s say you have a $5K client and that client is happy and they refer three others.  Suddenly their lifetime value has jumped to $20K with those other referrals (more if you make more with those new referrals.)

What Are You Willing to Give On?
On the other hand, what if that $5K client wasn’t totally happy with your services and withholds some portion of that bill or seeks a reduction. (Okay, I get it, you delivered but they have buyer’s remorse, it happens. Or maybe your work wasn’t up to their impossibly high standards.)

Fight Failure or Surrender to Ultimate Success?
Are you going to fight it and leave a bad taste so that they become either just a $5K client or worse a negative $10K client who costs you referrals or are you going to step up and do what it takes to resolve this amicably (no threats.)  This means that they might be a $4K client but will once again become lifetime value of far greater because you were courteous, professional, and gracious.

I want your opinion and your experience.  This is a HOT TOPIC!  How far will you go to save a client or customer?

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2 Responses - Join the Discussion!

  1. Greg

    This is great advice that is good to keep in mind, perhaps especially in the last year or two.

    If, like me, you happen to be making less due to the economy, you may feel short-term pressure to not take the small loss, but you’ve got to keep your mind on the long term.

    I have definitely had some of my smallest clients ultimately turn out to be long-term assets due to referrals.

    Reply to this comment
    • Melissa Galt

      Greg,

      Glad to hear it! Yes it isn’t how big or small they are but how big their network and ability to refer is. That lifetime value is too often overlooked.

      Warmly, Melissa

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