I was talking with the owner of a small rental car company. He was the owner, manager, and full-time front counter person so he saw it all. Our conversation started out on the topic of keeping customers happy in a highly competitive situation but then we found ourselves on a tangent and the conversation moved around to the topic of customers who demand more.
We SHOULD spend a lot of our time and effort on keeping customers happy and on building relationships with them. Unfortunately, some customers have a different idea about our relationship and make demands and set expectations that may start off reasonably but end up becoming problematic or even unprofitable.
He spoke about one regular corporate client (who rents weekly) who started by eagerly thanking him for a free upgrade from a compact car to an SUV. The following week that person said that they liked the SUV and wouldn’t mind taking it again. He tried to charge them the SUV price and they balked. Apologizing for the misunderstanding, he gave it to them at the compact price. The following week the corporate client returned and refused to take the compact car, demanding the SUV at the compact price.
This is not a case of “fool me once, shame on you; fool me twice, shame on me,” this is a case of letting a customer dictate how you do your business.
In this case, the rental car company owner was just trying to keep a customer happy. Soon that became an expectation. The rental car company owner knew that if he “turned off the tap” on the customer, that customer would go to the competition, and the rental car industry is highly competitive and arguably a zero sum game of customers.
He reluctantly gave the corporate customer the SUV each week because he was still earning a tiny profit. Then the customer started expecting additional things for major discounts, including insurance and gas charges. Then he started sending his friends in to get the same discounts.
This could happen in your business if you are not prepared. It might look differently, but it could happen. After this conversation I spoke with people in the consulting, home building, and manufacturing industries and found that they all experience the same problem.
How do you avoid this from happening? Manage expectations. If the car rental company owner had told the corporate client “this upgrade is a one time event” then it may have been avoided. If, the following week, he simply stood his ground, he wouldn’t have this ongoing problem today.
Be willing to let customers go if their demands get out of hand. It’s not easy to do but it will save you a lot of time and pain when you have to scramble on a regular basis because this customer makes demands that interfere with the rest of your business.
Ignore the tiny profit you may get from this customer: consider the fact that you’re potentially losing that profit from other deals you simply don’t have time to make anymore.
Always keep in the forefront of your mind that you are the professional. The customer may think that they are always right, but you’re in charge.
Yes, dealing with this situation is not ideal but it can happen in any business. Be prepared and stand firm.