Maybe you should fire that customer?

This may sound crazy, but somebody gave me a good piece of advice years ago that has held me in good stead, which I thought I'd pass along to you: sometimes the best thing you can do is fire a customer. 

At the time, I was running a software consulting business, and we were constantly running around trying to please our clients by building software that they *thought* they wanted but we actually knew wouldn't produce the desired result.  Sometimes our clients were reasonable, and when we pointed out why their instructions were misguided, they would respect our opinion and rethink their strategy.  Other times, however, our clients effectively told us to shut up and do what they were paying us to do, which was build whatever they told us to build. 

This turned out to be disastrous for our company.  Inevitably, we would build what they wanted, 3/4 of the way through the process they would realize that it wasn't what they wanted, and then they would yell at us for building something useless.  In the mean time, our employees would get demoralized, the customer would want a discount on the remaining work, and the final product would be some half-baked hybrid of what we started building and the new direction.

That's when I learned that sometimes the best thing you can do is fire your customers.  If they don't get the value that you are adding, or don't appreciate your service, or have unreasonable demands, allowing them to continue being a customer can do long-term damage to the viability of your company.  First, there is the opportunity cost of what you could be working on if you were dealing with this person/client.  Second, these customers are inevitably needy and high-maintenance and therefore low or no profit.  Third, and most importantly, by forcing your employees to deal with these people, you are sending them a message that their professionalism or values or sense of quality doesn't matter.  If you tell them that the customer is always right, and to do whatever they say no matter what, you are effectively telling them that their opinions don't matter even though they are supposedly professionals in their field.  Fourth, these are the kind of people/clients that are never going to be happy, and always blaming you for problems that are beyond your control.

This is related to my previous post about customers coming third, while employees come first and products come second.  If you clearly explain to your employees what types of client behavior is and isn't acceptable, and empower them to make decisions about what customers you do and don't want, you are empowering them as owners of the business.  They feel like their time and expertise are valued, and they inevitably put it to use for the greater good of your organization. 

If, instead, you force them to kiss up to an idiot or a jerk, no matter how offensive or off-base or misguided they are, you will end up with a work force that isn't motivated to serve any of your customers with the passion and quality that is a necessity for building a great company.  So do yourself a favor, and fire the one or two customers that you know in your heart of hearts are not making you great.  It may mean less revenue in the short term, but it will pay back in dividends.

--jsk

P.S.  I wouldn't recommend doing this with a large percentage of your customers.  If you find yourself wanting to fire more than a handful of your customers, that may be an indicator of a larger problem with either your source of customers, or the quality of your product/service!

Comments

[Mel]

Why, oh why, does the CEO have a blog mapped here with Typepad and we don't have that capability yet? PLEASE give us functional blogs!!!

[Daniel Nwobi]

hey. this post is really good. really contains alot of hard facts, people should really check this out. adios.

[Bruce Bloom]

Is the customer truly being impossible, or have you failed to communicate clearly? Is it the customer who's the problem, or the person on your staff who has the responsibility for that account? The most successful businesses I know are the ones where the customer is king. It's costly to get a new customer; kissing him/her off is an admission of failure, and a last resort. In 18 years I did it only once.

[John]

I wonder what your customers are thinking about this... Those who read it, of course.

And I'm glad I'm not one of them.

[Web Design]

Great post Justin, I agree with this theory as well... I know from experience you can't please every customer, and while you should go the extra mile to ensure their happiness, sometimes you can't satisfy all the people all the time. I am a homestead customer and have been for 4 years. I simply know the limitations of the product and it's intended audience. Homestead is not my only choice of hosting, but I continue to use it to satisfy my target market of customers who need a no nonsense wysiwyg editor and homestead serves that up with continued improvements. Thanks Justin.

[Lisa]

Sir, employees over customers? In your tier, the ones who pay for their salaries and your lifestyle come third? You have a great product. You could improve it by integrating features like blogs and forums so site owners can have a feedback mechanisms, dynamic pages that will help them rise in search engine rankings, and full control over their domains so that, if they use 3rd party services (because homestead doen't have them), these can be integrated into their sites. You have to be thankful for the customers who complain: they're still giving you a chance to improve and stay at the top of your game. Be afraid of the great many dissatisfied customers who will tell everybody else about how badly they have been treated by your employees or how dissatisfied they are with your product. Maybe you should take a survey of your clients: are there really just one or two in the noisy minority, or is there a silent majority shopping around for other hosting companies?

[Dora]

Justin, I too feel you are on thin ice with this attitude towards customers, and I am a Homestead customer. While most of the time the service is very good, when things get a bit complicated I do sometimes get an attitude from the support staff. At this very moment I am encountering a huge problem with my site which will have dramatic negative effects for me. There doesn't seem to be any way of communicating this to your staff without them getting that "Oh you're now being too demanding" tone in their voice, yet I feel what I'm asking is quite reasonable.

[Justin]

Lisa and Dora,
Thanks for your thoughtful comments. Perhaps I'm not explaining myself well, or you haven't read my other thoughts on "Putting Customers Third." The whole point of this philosophy is that by putting employees first, and empowering them as owners of the business who treat our customers like THEIR customers, it actually gives better service. I believe this very deeply and have many, many pieces of anecdotal evidence to support it.

As a rule, our customers rave about our support staff, although we do of course have moments where we fall short of delivering the level of support we strive for. We record every conversation that we have with customers (over 1000 per day)and can review those recordings. If you ever feel you have received poor support from one of our employees, send me a note with your user name and the day you called, and we will review the tape and take any disciplinary (or, more often, coaching) action that we need to.

Thanks again for your comments!
--jsk

[Hostjury]

Justin,

Great post!
Several excellent points. :)

[Kirk Franks]

Can I have some of whatever drug you're on?

[luck]

I will just say, good luck my friend. What most companies don't realize and fail at horribly like this one; customer is your business. take care of them or you will perish.

good attitude though.

[Rick]

Justin has a very important point. It is vital that employees be treated with the respect they deserve. Thats not to say that customers shouldn't be treated well, but that employees should be treated more like your family or team mates. At the organization I work for I feel very confident that if I encounter a client that is too angry or misguided then my managers will support me (provided I am not in the wrong). This sign of confidence provides me with motivation to assure that each of our clients are treated as well as possible.

After all, How can you expect an employee to treat a client with respect unless you first treat that employee with respect?

[Rory]

I think you need to learn how to run a business. Start with learning PHP and HTML, that way you won't have a poser crap-ass web log.

[Jackson]

I've already heard bad stories about the Homestead customer service, things like: they are arrogant, they are often clueless and they are generally unhelpful.

How do you think your customers who are already having problems with your service are going to like being told that their problems are third on the list of your concerns? This is bad PR.

[joe dirt]

this only works if your company has an excellent performance record. Work on that side of the equation please.

[User]

Remind me never to do business with you or your company. (If they're still around that it)

[Fatty]

Butter tastes like happy.

[Kev]

"How do you think your customers who are already having problems with your service are going to like being told that their problems are third on the list of your concerns? This is bad PR."
-----------------------------------

Not really. i like an honest company. I'm sick of every other company in the world using the cliched slogans like customer is number one and all that nonsense. It's nice to see some honesty.

It's not like he said he hates customers. Just the bad ones who waste his time and money.

[Brantone]

I'm shocked at the number of posts saying that he's off the mark, or arrogant or bad advice or whatever.
Sometimes there are arrogant customers who think a company should bow to them.
I have been in many situations (and currently am in one), where we had a client who made up projects on a whim, and expected them to be done by weeks end, when in reality would take a month to do. Rahter than the boss listening to *all* his developer's advice, he told us to do whatever the customer wanted - that is _extremely_ demoralizing to a developer, because the boss is standing up for the customer, rather than standing up for the employee - which is an excellent way to make unhappy employees, and increase turnover (hint: this is not what an employer wants).

I agree with what is written - sometimes it pays to say 'no' to a customer.

[Rich]

Unfortunately none of your comments are original and were thought of by other CEO's of far more reputable companies (Southwest Airlines)
Just don't take credit this..... Like most web hosting companies, you just don't feel like hiring "good" SA's to deal with real problems.

[John]

Can someone explain to me why anyone even uses Homestead? Godaddy.com, dreamhost, 1&1, all offer 1000x more space, bandwidth and features for less money.

How does this business even exist anymore?

There is clearly a time to "let go" of bad customers, but the dumbest thing in the world is to write a blog post about how you dont have a problem doing it.
Way to go.
http://www.digg.com/tech_news/Homestead_com_CEO_Says_SCREW_Customers

[Aaron]

While the quality of employees is a factor here, the question needs to be which employees a company should be trying to protect and appease. Customers are just as much a part of a company as employees. They shouldn't be graded and prioritized separately - a company with customers and no employees is not going to do very well, and a company with a full payroll and no customers is going to fair just as poorly.

Ultimately, should a janitor and a senior sysadmin be treated equally? Are both the janitor and sysadmin more important than customers?

Regardless of your internal structure and priorities as a CEO/director/manager and the companies overall vision, customers and employees both should be treated and need to feel as if they are first priority, even if they aren't from the companies perspective. The true key to success in business is being able to keep everyone happy.

[Jonny Smiff]

The customer may not always be right, but they ARE the customer none the less. Thanks to the inept people at this company my money is being spent elsewhere.

And after my short problem filled stint with this "service" I think at least one CEO is living in denial or is so far removed from the people representing him he only gets sunshine reports telling him how great his people are doing.

[Pablo Neruda]

@ThankfulNotAHomesteadCustomer: You're missing the boat here completely. He's not saying screw all customers out there at all. He's instead saying that sometimes there's a point where there can never exist a mutually empowering relationship between a service provider and a client. I've personally been in this situation many time and on both ends, from inevitably breaking away from the client as well as keeping them on hurting your business in the long run. You actually emphasize Justin's point: if you're obviously going to be a problematic client, then your business isn't wanted anyways.

@Justin: You are dead on for a good portion of this article, and I found it comforting to hear others who have had the same plights. This is particularly common to businesses where clients tend to think of you as "contractors", and want to get their way no matter what. Specification changes 3 weeks before release, what's the problem? This looks NOTHING like what we signed off on, except for the fact that it's the exact same wireframe and screenshot ...

[Rich]

I have worked with web hosting for about 6 years in my career, and I agree with Justin completely. Keep in mind that he said you should not be firing more than a handful of your customers.

There are some people who just will never be happy with your service, no matter how good it is. They complain, they berate your staff, and they blame you for problems that are completely out of your control (like things wrong with their own computer).

I once dealt with a web hosting customer who was using an ancient version of email software that he had many problems with, and yet he refused to upgrade. My boss finally saw the light of day, and sent him packing. He told the customer in a very friendly manner that there were no hard feeling, but that obviously the customer was not satisfied with the service and should find another. My boss even recommended a couple of reputable companies. Ironically, the problem customer then argued with my boss saying he didn't want to leave.

My boss did this with maybe three customers during a three year period, and I think it was the right move. Those few people were not profitable, and were very demoralizing to deal with. He felt that we should be very real, friendly people when dealing with customers, not robotic CSRs. The flip side of that is by being a real person, you also leave yourself more vulnerable.

[The Real World]

For customers to get good service one cannot be bound by bad customers – there is such a thing and no one should act as if that is not true.

By focusing (with balance) this leverages the best (IMO) ability to take care of customers as if your being tied, bound and gagged then you can help no one not even yourself.

Been in business for over 15 years and yes, we practice very similar polices.

We have as with anyone customers who love us and customers who don’t – but then again when you’re the customer this is fact - sometimes there is not a fit and that is business better to see it recognize it and get on with business then to waddle about wringing your hands.

As customers ourselves, we find some vendors do not meet our needs, but again that comes from us spending the time to gain an understanding of what we need and take the time (which cost money) to form a plan with clear lines of the goal.

All to often and we have been guilty our selves as customers - we see something then dream of what all we can do with it after the fact – the fact that we only asked for this, then modified it to something else.

Like saying all TV shows are good – sorry I don’t like soaps and all the drama.
Or one size fits all – Not in my lifetime.

Please note, many promise the sky without limitation to “get” your money – others earn it, I’d rather earn any day then be on the take but some people buy into those who allow the clearly simple project to spiral into the black abyss by promising the moon - then only to have yet another person who has lost capital and then cannot fulfill the promises they themselves stated to their customers. My imagination is right on up there but then there is reality and the time of roll out, the down time until completed and my own responsibility to not have those collide with my business model

Business is hard I agree, but not as hard as going to court and saying “Anything goes”

Simply an opinion of a person is that not alright? Sadly many will read and take offense to this article – seems to be the way of many, forget any good and focus on the negative – it is all with balance and the past articles grant this and does show balance.

Many may see the word “Profit” and instantly think poorly – that profit also includes customers profit.

We as business people need to be honest and aware of our limitations and we as customers (as we are both) need to be honest, less full of ourselves and aware of our limitations. If you cannot handle that truth then you may not be able to handle business.

In business as Justin sited, we know we are not always right - odd others missed that - it just might make better business.

[customer]

I am currently having a few problems with my account (these problems have nothing to do with homestead, they are my own problems)....hopefully I just didn't get what you were saying Mr. Kitch, but now I'm really hesitant about calling homestead...it shouldn't be that way! In the past I had a couple of problems and I had to call, the first lady I talked to was real nice but really screwed my website up, the next guy I talked to was a lot smarter with what he did but acted like I was a real pain in the ass.

[Martin]

i have been a homestead customer for about 5 years now, and though at times the service had lacked my high expectations, its all part of the way it develops itself. No Business or product is perfect and mistakes will happen, whether that is in regards to hiring the wrong member of staff or not predicting the customers needs accurately. At the end of the day busines's learn from their mistakes the same way people learn from their own. Thefore creating a better product.

I agree completely with JSK. His staff are part of his product and although their might be one or two bad cogs in their, treating them as a whole with respect will only empowerer them to give better customer service and be more confident in themselves. Any staff who do not then fit the mold and standard of the company will also face the same fate as the 'FIRED CUSTOMER'.

now firing a high percentage of customers is just reckless and the business will suffer. However fire only the small minority who will never be happy and your staff will feel respected and protected.

You wouldnt stand for it yourself so why should others, just because they are offering you a product?

Other customers will also see this and will respect the company making it a two way relationship rather than a me me me me one.

the company then demands respect from its customers (which is all JSK is asking for) and then the company passes it back to the customer in bucket loads. Creating a strong business relationship.

Errors in the product will test this relationship but at the end of the day its the decisions of the people at the top which will keep everything stable.

so now that you have read my essay of a reply you could have just skipped to the bottom to see that I AGREE WITH JSK and would someday hope that my own superiors would think along thoughs same lines.

keep up the good work Homestead.

[Justin]

All,
Well, this has been a lively discussion to say the least. I'm going to close comments on this post now, since it's been two months. I get the final word, I suppose, since I write the blog, so here it goes:

any of you who are using this post as supposed evidence that Homestead doesn't value its customers is totally missing the point. We LOVE our customers, wouldn't exist without them, would do almost anything for them, and I spend many evenings/weekends writing and speaking to them. That doesn't mean they come first. Finally, my post was a hypothetical, mostly referring to my work at a previous company. We have only fired a handful of customers ever at Homestead, and we've had millions. Still, it's a practice that you might consider in your own business, especially if it's a service business.

Thanks for all of your comments, I'm glad I stimulated a conversation. Please try to remain respectful as we continue the dialogue.
--jsk