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How to Detect a Toxic Customer (2010)

softwarebyrob.com

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Re: How to Detect a Toxic Customer (2010)

#21

Post by deltaqueue »

Sounds like this guy has never dealt with any Indian prospects, which notoriously exhibit many of these characteristics. Our most recent lead, which was a subsidiary of one of the largest companies in the world, involved dealing with one of the most painfully disrespectful employees in procurement that we've ever dealt with. After giving them an ultimatum that we weren't going to sign their agreement and that they could take ours or not sign at all, another employee at their company finally stepped in, apologized, and signed.

Fortunately, the more qualified leads we've encountered and close in the area tend to exhibit only a few of these traits and are generally much more respectful, but prosecting is still quite different from the US.

Re: How to Detect a Toxic Customer (2010)

#22

Post by fusiongyro »

otakucode wrote: post #10

Never 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…

37signals had an article a few months ago that essentially argued you should never do that. The argument went that if your biggest customer is only worth $200/month, it prevents you from getting confused about who you work for. If Coke paid 37signals $2,000,000 a month for Basecamp, it would turn into Cokecamp. When Coke takes their business elsewhere they'd be stuck with a weird product highly customized to Coke which nobody else wants. This does happen in practice--it's certainly one view of what happened with BitKeeper and Linux.

I think both perspectives are worth considering.

Re: How to Detect a Toxic Customer (2010)

#23

Post by Devilboy »

otakucode wrote: post #10

Never 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…

Yea this is what we do. Estimate how painful and time-consuming this client will be and price the sale accordingly. That $200 a month product we sell? For you, just $50k upfront for setup and training and $100k per year for support and licensing. Sometimes they turn out to be good clients after the initial pain.

Re: How to Detect a Toxic Customer (2010)

#24

Post by dwj »

BryanB55 wrote: post #14
otakucode wrote: post #10

Never 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 pa…

The other issue is that many of my good customers have done some of the things on the 'difficult customer' list. You can't easily pigeon hole customers as 'bad'. I have only had one REALLY bad customer - he tended to swear in his email (and his password was "fuckyou"), he used various aliases, and lots of people on forums said he basically scammed them. Also he was very rude and dumb. Anyways, I decided to charge him about 5x the normal rate (and he was too dumb to notice). This is the only time I've ever done this. Anyway, he paid for a year or two and then (thankfully) went out of business.

However even my best (and nicest) customers do some of the things here...sometimes they give me a big long list of questions at their first contact, or persistently call if they have what they think is an urgent problem or question. Usually as long as they're not rude I don't have a problem with it, and they're normally pretty happy if I send an email saying I'll reply after the weekend or whatever.

Re: How to Detect a Toxic Customer (2010)

#25

Post by halcyondaze »

benihana wrote: post #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 y…

I work with a SaaS product, and we've noticed that almost every customer that asks us for a discount right off the bat tends to 1. Have a low LTV and 2. Not be a good fit for us support and headache-wise. Just our experience.

Re: How to Detect a Toxic Customer (2010)

#27

Post by BuckNasty »

otakucode wrote: post #10

Never 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…

I've found that dealing with certain situations/people is not worth any price that a person might pay.

There are people who are just unbelievably unreasonable, mistrusting, and impossible to satisfy. These types can take you off course, reduce morale, harm your reputation, and generally almost "break" your company. As a small boot-strapped, but profitable company, I would rather expend our efforts on finding and supporting good lower-paying customers who are happy with our service and with whom there is a mutually beneficial relationship.

As they say, "money isn't everything", but even to the extent that one focuses solely on money, it's not always more profitable longer-term, even with a customer who's willing to pay an outsized price.

Re: How to Detect a Toxic Customer (2010)

#28

Post by dotBen »

aes256 wrote: post #17
dotBen wrote: post #13

Earlier quoted context omitted.

> 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…

People build self-service businesses because they don't want to build a sales team and/or be able to keep their price point competitive.

If everyone emailed in wanting pre-sales and discounts the price would go up because there would need to be a sales team to service the requests.

I'm telling you that as someone who runs such a business that has both self-service and sales-led products that are priced differently (partly) for that reason. (that business is hosting the OP site as it happens)

Re: How to Detect a Toxic Customer (2010)

#29

Post by _wesley_ »

fusiongyro wrote: post #22
otakucode wrote: post #10

Never 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…

37signals had an article a few months ago that essentially argued you should never do that. The argument went that if your biggest customer is only worth $200/month, it prevents you from getting confused about who you work for. If Coke paid 37signals $2,000,000 a month for Basecamp, it would turn into Cokecamp. When Coke takes their business elsewhere they'd be stuck with a weird product highly customized to Coke whi…

Here's that article:

http://www.inc.com/magazine/201206/jason-fried/huge-accounts...

Re: How to Detect a Toxic Customer (2010)

#30

Post by DavidPlumpton »

otakucode wrote: post #10

Never 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…

Don't forget to require them to pay in advance.
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