Sprint Nextel seems to be taking some flack for cancelling the contracts of about 1,000 of its wireless subscribers. Now while this would be no big deal if the contracts were cancelled due to non-payment, in this case Sprint decided they simply weren't customers they wanted anymore.
Their crime? They called customer service too frequently. Well, not just a little more frequently, but a lot more frequently - an average of 25 times per month, or 40 times more than the average Sprint customer. So Sprint elected to ask them to use a different phone service.
Although deciding to fire customers is a controversial move, it is also a smart one. Every customer is not necessarily going to be one you want to do business with, for a variety of reasons. They may demand too much of your time or attention, request discounts or special pricing, bad mouth you to others, or simply not appreciate all that you offer.
Savvy business owners regularly review their customer base and rate or grade their clientele based on factors that are key to the company's growth and success. Some entrepreneurs may put a premium on profitability while others may appreciate customers who refer others their way. You can create your own set of grading criteria to help you assess each customer's fit with your business and where it is headed - an A, B, C, and D scale works fairly well.
Once you've identified your lowest grade customers, the D group, the hard part comes next - firing them. Of course, you can simply make it less attractive for them to do business with you, by raising your prices, for example, or changing policies so that you don't have to spend as much time on them. Or you can send them a letter, as Sprint did, thanking them for their business and letting them know you will no longer be able to sell to them.
While you may be nervous about taking this step, no business owners - none! - I've spoken with have ever regretted jettisoning a bad customer. Your stress level with go down and your profitability up. So follow Sprint's lead and give your worst customers to your competition.
Saturday, July 7, 2007
Wednesday, July 4, 2007
Need a Bigger Shopping Bag? Don't Go to the Gap
When you make a purchase at a clothing retailer, do you expect to receive a bag big enough to hold all your items? How about a bag that is slightly larger, so you can stash the bags containing merchandise you've purchased from other stores?
To me, asking for a slightly larger bag from a retailer is not a major request, especially when you've just handed over a decent sum of money for a boatload of polo shirts and shorts. But when I did today at The Gap, I was told the clerk "was not allowed" to give me a larger bag. Now, mind you, I was not asking for a gargantuan carry-all, just the next larger size bag so I could throw in some smaller bags I had been carrying around. But I was told "no."
So not only did they irritate a loyal customer with that response, but the store lost the opportunity to showcase its name on a larger bag. If I had been given a larger bag, I could have effectively helped promote The Gap to other shoppers in the mall, who would be able to see where I had been shopping, not to mention hiding the fact that I had just come out of Gymboree, Ralph Lauren, and Harry and David. (My plan had been to cram all the other bags into one from The Gap.)
Now you may be rolling your eyes, I know, but think about the marketing opportunity The Gap just lost, and make sure you don't do the same thing in the interest of saving a few pennies.
When a customer makes a reasonable request, especially after they've just made a decent-sized purchase, your goal should be to keep them happy. If they'd like a larger bag, you give it to them and suggest they put their other bags in it. Maybe you even give them two bags, so that all any other shoppers see is your store's name.
When shoppers see other people with several bags from a store, it suggests to them that there must be great merchandise at that particular store and they should go check it out. So be generous with your bags and watch your business grow.
To me, asking for a slightly larger bag from a retailer is not a major request, especially when you've just handed over a decent sum of money for a boatload of polo shirts and shorts. But when I did today at The Gap, I was told the clerk "was not allowed" to give me a larger bag. Now, mind you, I was not asking for a gargantuan carry-all, just the next larger size bag so I could throw in some smaller bags I had been carrying around. But I was told "no."
So not only did they irritate a loyal customer with that response, but the store lost the opportunity to showcase its name on a larger bag. If I had been given a larger bag, I could have effectively helped promote The Gap to other shoppers in the mall, who would be able to see where I had been shopping, not to mention hiding the fact that I had just come out of Gymboree, Ralph Lauren, and Harry and David. (My plan had been to cram all the other bags into one from The Gap.)
Now you may be rolling your eyes, I know, but think about the marketing opportunity The Gap just lost, and make sure you don't do the same thing in the interest of saving a few pennies.
When a customer makes a reasonable request, especially after they've just made a decent-sized purchase, your goal should be to keep them happy. If they'd like a larger bag, you give it to them and suggest they put their other bags in it. Maybe you even give them two bags, so that all any other shoppers see is your store's name.
When shoppers see other people with several bags from a store, it suggests to them that there must be great merchandise at that particular store and they should go check it out. So be generous with your bags and watch your business grow.
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