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How to Detect a Toxic Customer (2010)
11–20 of 67 posts
Re: How to Detect a Toxic Customer (2010)
#12I don't see why asking for a discount is so toxic. We ask for a discount on every transaction with a 3rd party our business makes and more often than not we get one. It seems like most business to business transactions start with the "dummy price" out the gate.
That's why the article talks about looking for "2 or 3" warning signs rather than just one. Just about any customer can show one of those warning signs and be a perfectly acceptable customer, but when they have several, they're almost certainly toxic.
Re: How to Detect a Toxic Customer (2010)
#13I don't see why asking for a discount is so toxic. We ask for a discount on every transaction with a 3rd party our business makes and more often than not we get one. It seems like most business to business transactions start with the "dummy price" out the gate.
> We ask for a discount on every transaction with a 3rd party our business makes
I'm curious to learn why you do that? On "contact a sales person" type sales I can understand but you use the term 'transaction' which implies you are doing this on self-service purchases.
Most self-service businesses are setup to streamline (ie avoid) human-interactions which would also suggest they are honestly pricing their goods/services. By contacting them for a discount you're already increasing their CAC before you then ask for a discount too.
If you have sticker-shock on the price because it's not offering a return value to you or you cannot afford it then you're probably not a target customer. That's why I don't go into the Ferrari dealership and ask for 10% off.
Re: How to Detect a Toxic Customer (2010)
#14Never say no. EVER. I mean it. Not one single time, not under any circumstances ever. Make them say no. The way you do this is by determining just how much you would have to be paid in order to deal with the customer. It doesn't matter if it's a completely unreasonable number. Name it. Don't just presume they will refuse and turn them away. Tell them that your product which would normally cost $1k is going to cost th…
It's funny we've thought about doing this in a startup I run in the real estate industry where most of our customers are realtors.
Unfortunately it's not always easy to arbitrarily raise your prices for the difficult customers because they complain even more and ask "where does it say that there will be a charge or fee for this on your website?"
I always thought it would be nice to have an extra line on my pricing page that stated "Difficult Customer Fee: $TBD" :)
Re: How to Detect a Toxic Customer (2010)
#15Anyone who has worked selling...anything, can understand where you're coming from. There are some real d-bags out there, and some will end up as potential customers. But as a guy who has been on the other end of these calls, far too often, I can sympathize with wanting some directness. I can't tell you how many times I write an inquiry to a company with some basic questions, and next thing you know I'm bombarded by r…
I've experienced this both ways. Usually when I'm looking for business products or services they are more likely to want to do an annoying "sales call" but I've also experienced this as a business owner. We try to offer a very simple service where customers can sign up online and find all of the information they need on our website. However we still get customers that will literally email us and ask us to call them (as if they can't call our toll-free number) so that they can literally ask the most basic questions.
The worst is when they ask us to "send them a proposal" or "when you can have a conference call with us?".
We work with clients in the real estate industry, real estate offices, builders, etc... I think certain industries are accustomed to working certain ways or just follow the traditional "corporate attitude" of meetings and conference calls.
If you really want a low-touch, low pain customer base I think the industry you choose is also very important.
Re: How to Detect a Toxic Customer (2010)
#16>But asking us to drop our price by 25% or 30% just for kicks is not typically a sign of an outstanding customer.
Disagree completely. Repeatedly asking for a discount over a long period of time for no reason, maybe. But just asking for a discount at the beginning or out of the blue seems to be a wise tactic in financial transactions.
If I ask for a discount the worst they can do is say no, and very often they say yes and I pay less. If I ask and they say no I and I push it and they're firm about not giving a discount, great - I'm paying a fair price that we're both happy about. If I ask and they lower their price, great - they lowered their price and now I'm paying a fair price that we're both happy about. Just seems to be part of the game you play...
Re: How to Detect a Toxic Customer (2010)
#17I don't see why asking for a discount is so toxic. We ask for a discount on every transaction with a 3rd party our business makes and more often than not we get one. It seems like most business to business transactions start with the "dummy price" out the gate.
> We ask for a discount on every transaction with a 3rd party our business makes I'm curious to learn why you do that? On "contact a sales person" type sales I can understand but you use the term 'transaction' which implies you are doing this on self-service purchases. Most self-service businesses are setup to streamline (ie avoid) human-interactions which would also suggest they are honestly pricing their goods/serv…
> Most self-service businesses are setup to streamline (ie avoid) human-interactions which would also suggest they are honestly pricing their goods/services.
This doesn't follow. It shows they are concerned with reducing their costs, not that they will pass those cost savings onto the customer.
Don't ask, don't get. If you are going to be a solid, profitable customer for a business, they have a clear incentive to get you on board by sweetening the deal.
Re: How to Detect a Toxic Customer (2010)
#18> But asking us to drop our price by 25% or 30% just for kicks is not typically a sign of an outstanding customer. Disagree completely. Repeatedly asking for a discount over a long period of time for no reason, maybe. But just asking for a discount at the beginning or out of the blue seems to be a wise tactic in financial transactions. If I ask for a discount the worst they can do is say no, and very often they say y…
Whether it's "part of the game" is probably regional, but he does say it takes the presence of several to really pinpoint the toxic ones.
Re: How to Detect a Toxic Customer (2010)
#19I feel like I read about some of our customers in post and comments. 10% of our customers generate 1-2 percents of revenue, and 70-80% of support emails (all urgent), phone calls, complaints to quality of service, requests to implement tons of custom features for them, e.t.c, e.t.c.
Re: How to Detect a Toxic Customer (2010)
#20I presume this came up because it was auto-tweeted from swombat.com (this got retweeted today: http://swombat.com/2010/12/9/how-to-detect-a-toxic-customer ). If so, it's worth pointing to Joel Spolsky's response to this: http://news.ycombinator.com/item?id=1987223 Definitely worth a read alongside this article.
It's not true that large companies will form the bulk of your revenue. It all depends on what you are doing. If you are making something that every company in the world needs one of, than you will sell a lot more to the 501 through 5000th biggest companies in the country than to the top 500. (You might be able to charge those big companies a 50% or even 100% premium on various add-ons, but it won't come close to matc…
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