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How to Detect a Toxic Customer (2010)

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Re: How to Detect a Toxic Customer (2010)

#31

Post by _yosefk »

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…

BitKeeper user here; AFAIK BitMover got $0 for hosting Linux though they did get a lot of fame. And their biggest problem apparently isn't that BitKeeper "turned into a LinuxKeeper", but rather free BitKeeper clones like git and hg (the first of which was originally created for Linux). So, just curious about your interpretation of your Cokecamp analogy; to me their problems (to the extent that they experience problems) do seem very much related to losing their biggest, most visible user, but in a different sort of way.

Re: How to Detect a Toxic Customer (2010)

#32

Post by juddlyon »

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…

There is not a price that is worth dealing with toxic customers. They undermine your confidence and make you resent your job. They also distract you from delivering what you promised to your good customers.

My view is that it's healthy to say "no thanks," politely and frequently.

Re: How to Detect a Toxic Customer (2010)

#33

Post by w1ntermute »

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…

Reminds me of Mad Men and what happened to SCDP when they lost their Lucky Strike account.

Re: How to Detect a Toxic Customer (2010)

#34

Post by larrys »

swombat wrote: post #2

I 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.

Thanks for posting that.

This statement by spolsky, from my many years experience, is correct and needs to be emphasized:

"Summary: while it's fine to turn away truly toxic customers, and you are welcome to decide that you'd rather sell to the starving startup founders on Y-combinator who would rather spend 2 hours scouring your website than deal with a salesperson, the corporate customers turn out to be remarkably price-insensitive, once they make a purchase they will keep paying you maintenance for years long after the product is not even in use, and they're just as likely to leave you alone as the small guys, but they do have "multiple stakeholders" and if you want to sell to them you need a process that matches their reality."

The problem with some of the advice given on HN is that it is right and wrong depending on the circumstances. Many of the people reading that advice don't have years and years of real world experience and may take that advice out of context to their detriment. (Note I say "many" which doesn't mean "most" or "all").

Re: How to Detect a Toxic Customer (2010)

#35

Post by jusben1369 »

swombat wrote: post #2

I 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.

Thanks for posting. Joel does outline the dynamics of an enterprise or larger sales prospect or customer. But he's also highlighting the dynamics of a toxic prospect so it's not that far from the original author's point. If you're dealing directly with procurement, if you're filling out 80 questions and returning via email, if it's a 10 person team drawing it up and giving it to Junior to go chase down...............you're not going to win the business and it's going to suck out time and worse, you may get emotionally attached because it is a larger opportunity so the team will get deflated. This author is correct either way in pushing back on these requests. If your offering is truly of interest to them they will engage in the manner you want. (which is what happened here when they kicked the original guy to the curb and someone more reasonable took over)

Re: How to Detect a Toxic Customer (2010)

#36

Post by aes256 »

dotBen wrote: post #28
aes256 wrote: post #17

Earlier quoted context omitted.

> 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 (p…

I don't think it's as big of an issue as you suggest. If you've spent umpteen hours developing the product, the amount of additional time and effort required to put a simple discount system in place is negligible.

You could even set up a standard response email. If someone writes asking for a discount, just send them a ~10% discount code.

It should pay for itself in the form of (even slightly) increased conversions in no time.

Re: How to Detect a Toxic Customer (2010)

#37

Post by scott_meade »

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…

There is no price worth the headache. Life's too short and the days too few to have any one of them tarnished by toxicity.

Re: How to Detect a Toxic Customer (2010)

#38

Post by rm999 »

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…

In negotiation there is a threshold where you insult the other party. For someone you don't want to deal with this may be OK, but in general I think it's more considerate to say no than to play games with numbers.

In OP's case, if he had offered the spreadsheet guy some insane amount he probably never would have gotten any business. The more reasonable colleague would have seen the amount and scoffed, forming a poor opinion of OP's business.

Re: How to Detect a Toxic Customer (2010)

#39

Post by OldSchool »

Right-on! These scenarios are sadly straight out of real day-to-day life in a successful business.

The colleague one is classic, or worse yet, you're called by the 'expert' himself who trivializes your product yet somehow is calling to buy it.

Top of my list though is this: Customer negotiates again after delivery. "I want a refund unless I get convoluted feature X for free, or $Y off the price."

Don't be afraid to fire a customer just to improve your quality of life. Bonus points for describing your direct competitor as a perfect fit.

Finally, for sanity's sake, never give out your personal cellphone number. If you must be "reachable," use something you can block off-hours.

Re: How to Detect a Toxic Customer (2010)

#40

Post by fusiongyro »

_wesley_ wrote: post #29
fusiongyro wrote: post #22

Earlier quoted context omitted.

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...

Thank you, I never have been able to find this again since reading it.
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