We all appreciate that your greatest marketing success occurs when you can convert a one-time, one purchase customer into a recurring client; ideally one who will pay you automatically, every month, on time, for the service without even thinking about it. Better yet, if you can pull it off, your margins can be incredible if the clients don’t actually use your service or you incur no real costs in maintaining the relationships.
However, things can go very wrong, very quickly, when your clients decide to leave, either because they don’t require your services any more or (perhaps most sadly) they’ve discovered that they aren’t receiving any real value or a competitor offers much better value for the same thing.
In the local media today, I read and listened to reports of how a fitness club failed with two separate clients, in two separate situations.
In the first, the client, visiting the club, described with some enthusiasm about a competing club’s services and benefits while he was working out. Club staff rudely interrupted, told him that club policy was to not allow any competition about the competition, and asked him to stop. He went to the media instead.
In the second, a client of the same organization (different location) moved out of the country and decided to cancel his membership, which he paid through regular debit charges at his bank. Club officials told him the only way he could cancel would be by visiting the location where he signed up. When he returned to Ottawa for a visit, he went to the club location, asked for his membership to be cancelled, and discovered himself in a confrontation with a couple of security guards.
We of course don’t know the whole story here — abusive clients sometimes go to the media and the stories may not be complete. (This is one reason I never identify businesses or individuals negatively in this blog.) Nevertheless, the fitness club has achieved a double-whammy in negative branding and marketing; two incidents and two separate stories of client/club interaction override the thousands of dollars of catchy and jingly advertising the fitness club has purchased – all because of split section decisions by individual employees who presumably could have benefited from some confrontation and client relations training.
The line, the “client is always right” of course is not always true. I’ve known of many situations where we’ve been mistreated as a business by individuals trying to game the system. But I accept that we make mistakes ourselves and in any case, the negative karma of disputes for relatively small things is hardly worth the stress. (If your disputes are over large things, you really need to look at how you manage your cash, client selection, and contract language — clearly not being paid for a major job could destroy your business.)
Our business policy is always this: When a client complains, we listen, empathize and if the matter is small, immediately default to the client’s perspective and settle in the client’s favour. If the matter is larger or the problem seems to be recurring, the empathy remains, but we ask for some time to check into the situation, review documentation and then decide what is best. I’ve not yet imposed financial numbers on “small”, “larger” or recurring because again some common sense and respect underlie the situation — it is quite one thing for a client spending $50,000 a year to dispute a $1,500 ad and another who has only advertised with us once to dispute the same thing (though the latter may be more painful, because the advertiser probably just doesn’t have experience to know what results to expect and feels the pain much more severely.)
Then what about recurring clients who decide to pull up and leave? Well, fighting them, citing contract language, and obnoxious calls to the security department probably are rarely appropriate solutions. Treating them with respect and civility may not get them to return, but at least you won’t find your business name all over the radio and local newspaper. You also, obviously, need to figure out why the defections are occurring and make improvements in your business to make it much more appealing to stay.