Fire the Customer

In our housing business we worked hard to identify, locate and bring leads to the table. Often as we were negotiating the contract and sometimes even after we went to contract things would not feel right or even begin to go wrong and we would recognize that a customer would be more problems than the contract was worth. Firing a customer is hard emotionally and can be difficult legally.

The saying goes eighty percent of your problems come from twenty percent of your customers. I always thought the ratio was more like 90/10. The sooner you identify problem customers the easier it is to disassociate. As good as it might feel to "fire" them that process can have legal and public relations consequences that you may not want.

A real bad sign of problems was when one of or the other of a couple took complete control of the process particularly if the lead partner was condescending to the other partner. If they argue openly in front of you it is also a bad sign but in my experience not as bad as only one controlling the process because it often means the disagreements are going on outside of your presence and you can be caught in the crossfire.  You cannot be a marriage counselor so do not try. If you get bad feelings that the customers are not on the same page it is often better not to even go to contract.

There are other signs of problems. The "researcher" was one of my favorites. He would often start out a conversation by saying "I know you are the expert but," and then would launch into a monologue on what he had found n the internet or at the library. As we were moving through the process he informed me that he had purchased a CD that had contract forms he intended to use for his new home purchase which included a penalty clause if we were late on completion which he had needed to use on a previous new home purchase.

I told this customer that we had a standard purchase agreement prepared by our attorney and that we did not use third party contracts particularly ones purchase off the internet. His response was "We'll see."

The process of selecting a lot and completing final drawings was usually a two to three month process for us but with this customer it took us nearly six months to finally get to the contract signing.  We completed the contract and sent it to his attorney for approval. The Contract came back with his penalty clause written into the pre-printed form. When I told him we would not accept this clause he told me he had done his "Due Diligence" on us and although we had an excellent record of on time completion so had his last builder and he had need to enforce that clause on that builder. In the process he told me the name of the other builder who I happened to know through the builders association.

I called up the other builder and when I asked him about this customer he said "RUN." Turns out the project was delayed because the customer kept changing his color selections while the home was being built. When it was finished the builder had paid him the "penalty" just to get rid of him.  We told this customer we would not be building him a home.

Most of our customers were great.  Living through the bad ones is a nightmare. Identifying a bad one before you get involved is financially rewarding and great for your mental health.

Original Content copyright 2011 Thomas Robinson