When to Say No to the Customer

One of the most difficult customers to deal with are the Negotiators.  The Negotiators are on a mission. Sometimes to get a specific item they want but just as often to get as much as they can.

There are a number of books on negotiating that all tell the reader how to get whatever they want by negotiating. In reality they are not negotiating as much as trying to manipulate someone to get a desired result.  One example given in one of these books is if you are looking to buy a car always tell the car salesperson that you like the car you are looking at but hate the color, even if the car is your favorite color.  The strategy is to make the salesperson think you do not like the car so he will lower the price to induce you to buy the car you wanted all along. The trouble with this particular tactic is every car salesperson has heard it a hundred times and all the good ones have read the same book.

In our housing business we had customers who had read these books and when they wanted something they were not entitled to by contract would express displeasure over some item then try to turn the expressed displeasure for what they really wanted.  We had a customer call us about a scratched cabinet after they moved into the home. The "scratch" had not shown up on our list of incomplete or damaged items on the walkthrough and upon inspection the "scratch" was on the side of a cabinet and nearly invisible.  We could repair the item with a dab of touch up wax but the customer wanted the entire cabinet replaced which would have been costly and disruptive to the family.

After a few minutes of discussion he said "You know what, we really do not want to put up with the hassle and put you through the expense. How about you give us a wine rack for under our counter as compensation?"  I discussed the issue with my superintendent and discovered there had been a number of similar "trade offs" during the construction and the customer was talking bad about us to other home buyers in the community but was telling all the neighbors how he got us to give him free stuff.

I called the customer and told him that because the item was not on the walkthrough list we would not be doing any work on the cabinet. We told him we would give him the touch up wax if he wanted to make the repair himself.

He asked me if I was sure that I did not to make him a happy customer by giving him the wine rack. I told him that it was unlikely we would ever make him happy. I told him I knew what he had been say about us to his neighbors. I also told him that giving in to a made up warranty claim was unlikely to make him happy.

If your customer has a legitimate complaint deal with the complaint even if it is more expensive and time consuming than the proposed alternative. Giving in will only open you up to future similar claims. If your customer does not have a legitimate complaint tell them so politely but firmly. If the customer threatens to withhold their satisfaction or happiness it is more often time to call their bluff.

Original Content copyright 2011 Thomas Robinson

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