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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)

#61
post #60
post #26

maybe YOU need to stop bitching...

I know I shouldn't feed the trolls, but I find these one or two thoroughly killed comments at the bottom of threads fascinating and you actually seem to have other, mostly reasonable posts. What is this post supposed to accomplish? What actual message are you trying to convey? What about this article made you feel compelled to write a one-off insult and nothing of substance?

Maybe he's the guy in the OP. :)

Re: How to Detect a Toxic Customer (2010)

#62

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 supp…

Do I know you? I'd email but you don't have one listed in your profile, please consider adding one!

Re: How to Detect a Toxic Customer (2010)

#64

> 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…

There are some valid reasons for asking for a discount, such as plans to buy a large quantity of licenses, pay for a year in advance, the company is a charity, non-profit, school, etc. If the request for a discount didn't have some sort of justification like this then I still wouldn't write them off, but I would probably make a mental note.

Regardless of the size of their company, some customers will never be content unless they bend you over backwards so far that you're losing money on their business. They want to get more value than they paid for. Whether that's because they don't appreciate the value of resources they consume, or it's intentional, I can never tell.

On the flip-side, the weird thing is that these difficult customers can also wind up being your hugest fan. It can be a real love/hate relationship!

Re: How to Detect a Toxic Customer (2010)

#65
Am I the only founder here who enjoys the challenge of a toxic customer? Make the deal, sign a short term contract, then drop communication. A customer is only toxic when they know they have leverage. My strategy: build up a false sense of leverage during the deal cycle, then at the end DHV and threaten to pull away, close the deal, and make em feel like you did them a favor. Never say no. Never charge a higher price. Get the customer first, and then make them want you, not hate you.

In regards to the specific example of the 80 question doc, I would've simply replied "sorry, I'm not experienced enough to answer these, then tell him to wait to hear from another sales manager, then circle back in 3 weeks seeing if he got his questions answered (even though you know he hasn't). He's happier than getting a "no", and his boss will wonder why the purchase hasn't happened yet. Delay, delay, delay, and let the customer come back to you. That is the filter. No use in prematurely judging a customer and potentially losing business forever. Don't less SaaS economics ruin the salesman's tact. It's all we got left.

- god of parking and traffic

Re: How to Detect a Toxic Customer (2010)

#66
post #34

Earlier quoted context omitted.

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 p…

the corporate customers turn out to be remarkably price-insensitive, I haven't read all of Spolsky's response yet, but I find this comment interesting in light of the fact that the original article specifically calls out customers who ask for a discount with no justification. Okay, I can see that some places need to check all 80 boxes on their IT purchase approval sheet (I work for one of them), but if they are askin…

Spolsky's argument is that the sale will typically go through without a discount and thus it is not a real problem.

"Big companies often have purchasing departments actually do the purchase. They are trained to expect discounts and the people in the purchasing department know a lot more about asking for discounts than they know about software, because that is their specialized role in the organization. If you politely tell them that you have one price for everyone, they'll still purchase, because the purchasing department ususally doesn't have the power to stop the purchase."

Re: How to Detect a Toxic Customer (2010)

#67

Earlier quoted context omitted.

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…

I also run a business with realtors as customers and I know exactly what you are talking about, some are definitely toxic. That said, I'm sure it's not just a realtor thing but it can seem that way. We try to detect/filter them in the sales process. Unfortunately saying "I don't thing our product is a good fit for you" invariably seems to make them want it even more.

Glad I'm not alone. Not that I'm saying all realtors are this way but we get a lot that have the "my way is the only way" mentality. It doesn't help that the real estate industry in general can tend to be a bit old fashioned. I would say 90% of all of the MLS systems I've seen require ONLY Internet Explorer in order to use it! I've never looked at any official demographics of realtors but all of our customers tend to be woman in their 40-60's that use AOL as their email address and Internet Explorer 7.
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