What To Do When A Customer Makes Unreasonable Demands

In “Are Customers Stupid?”, we discussed how important it is to listen attentively to customer complaints and inquiries even when such feedback seem negative or trivial.  As business owners, we can improve our business system by listening to such feedback and possibly make more money.

One reader commented on that post, saying

“Sometimes (not often), they (my note: customers or prospects) do need to be put in their place for consuming too much time and resources, even to a point of letting them go from your business. But I would hope this is the exception rather than the rule.”

Another said,

“There are just some people out there who will complain for the sake of complaining. There are also those who are just trying to get something for nothing and play the system.”

This is a critical issue all businesses are aware of but not very willing to discuss.  There are customers who make unreasonable demands.  In this post, I’d like to explore this sensitive issue with the highest level of honesty and integrity I have in order to help other entrepreneurs.

(Hey, I’m keeping my promise to write a post on this issue.  Although writing this now, after almost five months may not qualify as “soon” )

Which demand is reasonable and which is not?

I fist started thinking about this issue when I read about Nordstrom’s customer service training in Made to Stick: Why Some Ideas Survive and Others Die.  For those of you outside North America, Nordstrom is a major department store chain that is famous for its excellent customer service.  It’s a high end department store.

On page 73 (BTW this book itself is a great read.  A must read for writers), there are some stories that are meant to illustrate the extraordinary customer services by “Nordie” (Nordstrom’s customer service representatives) such as:

• The Nordie who cheerfully gift wrapped products a customer bought at Macy’s
• The Nordie who refunded money for a set of tire chains – although Nordstrom doesn’t sell tire chains

Now as you can see in my aforementioned post, I take customer service seriously.  I don’t really know if it’s Japanese thing like some commenters pointed out, but anyway, I do.  I believe money follows when I deliver value, and customer service is a significant part of any business offer.

But these examples are a bit different.  Why does Nordstrom refund money for something it didn’t sell?  Is it because this customer makes other lots of purchases?  Or is it because he made a fuss?  Do they do this to anyone who wants money for unwanted tire chains?

And where does that money come from?  From other customers, of course.  So Nordstrom is spending their profit made off from honest customers and making dishonest customers happy.  Is this really an example of outstanding customer service?

In my opinion, this is the case of unreasonable customer demand.

How about gift wrapping Macy’s products?  This is less of a problem . . . wrapping paper cost is pretty negligible. Still, Nordstrom is using their employee time to do this.  And their paycheck comes from – again, from the money customers pay.  I think this is a borderline demand that is very close to being unreasonable.

Where is the healthy boundary?

I like Nordstrom, but after reading this story, I was baffled.  And I think twice when I buy anything there.

Personally, I think Nordstrom is making a mistake.  There is great customer service, and there is brown nosing.  I’d be happy to pay for great customer service, like sales reps helping me find the right stuff, but I don’t want to pay for some jerks who make money with lies.

As a business owner, I understand the fear you may have when dealing with the kind of customers who make unreasonable demands.  It’s not just the loss of sale to that customer.  They can spread bad words about your business.  These days, they can post unreasonable reviews on the internet and affect tons of unsuspecting prospects.  And people who make unreasonable demands are likely to write unreasonable reviews.  They are good at pushing people’s buttons.

I still think businesses are better off in the long run to have the healthy boundary and make that clear to everyone.  Like clear refund policy.

What we can do as customers to promote and protect good businesses

And I think, as customers, we are better off to protect good businesses that treat all customers fairly. When you see or hear negative reviews, be sure to check the facts.  Contact the business to check if the said problem is true.  Like in any dispute resolution, hearing both sides’ stories is important.  By doing this, you are ultimately protecting yourself and your money from being spent on the few unreasonable customers the businesses have to deal with.

If you automatically sympathize to all the stories of “OMG I got ripped off by that business, they are horrible.”  watch out.  Check if it’s true.  Likewise, don’t just trust the reputation that Nordstrom is a great place of shop.  Check it out for yourself.

The dark manipulative energy

And then, there are people who are not customers, not really prospects, but just want to make fuss.  People who likes to use the dark manipulative energy.

In online world, one way this happens is negative comments.  By negative comments, I don’t mean comments that disagrees.  That can be constructive feedback and I love them.  What I mean is comments with name-calling.

For example, check this out in which the proud Lord Chartland got called prostitute. (It’s the second comment there.)

This is the post James talked about money, and because the word money pushes many people’s buttons, it wasn’t a surprise he got some difficult comments.  Most, however, were trying to come up with good ways to deal with the sensitive issue of pricing.  For example, Tony showed off his peacock feathers and took the side of free offer.  He was disagreeing James but with great logics = great feedback.  But calling James prostitute?  That’s just pointless name calling.

What is this person’s motivation?  He does seem to have bought anything from Men with Pens.  Doesn’t sound like he ever wanted to hire them.  Subscribers are kinda like customers, but still losing one subscriber probably didn’t hurt Men with Pens.  So why is this person doing this?

To make people feel bad?  I guess.  There are souls like that.  Watch out.

The line between seemingly negative feedback and really negative feedback

Knowing the difference between the complains / inquiries we discussed in “Are Customers Stupid?” and the unreasonable demands discussed in this article is wisdom.  As an entrepreneur, we need to be mindful about this.  When you encounter difficult situations, refrain from reacting it – whether the reaction is the “No way” kind of rejection or “Whatever you say” kind of brown nosing.  The first step to solution is to keep your calm.

So what do you think?  If you are an entrepreneur, will you please share how you handle with customers who make unreasonable demands?  And as customers (which, we all are), what do you think about this issue?  Have you ever stood up to protect your favorite business? Do you think some (few, hopefully) customers who make unreasonable demands are hurting you indirectly? (Photo by Denis Collette)

How To Improve Customer Service By Spending Far Less Time

(Photo by Sleestak66)

The customers are demanding attention. You address them the best you can, but there are so many that you can’t keep up with them all.

The bigger your business grows, the more customers are asking questions and complaining about more and more issues. You want to treat your customers well, but you just can’t stretch any more . . .

Believe me, this will happen sooner or later when you become an entrepreneur and your business takes off. Even when you offer outstanding service or products, there will be inquiries and also complaints about perceived problems. What do you do?

It seems the majority of business owners choose one or both of the following two options:

1. Work longer hours
2. Get other people’s help (ie, their time), starting with your family members and then hiring others

Both approaches above are based on linear thinking.

You are addressing each problem one by one, and each problem solving takes certain amount of time, so the total time needed to solve all problems is the sum of time each individual problem solving takes. Obviously, you need more time to solve more problems this way. So you either work longer hours yourself or, realizing your human physical limitations, you get other people’s time. The quality of your personal life, your health, your relationship with family, and the bottom line of your business suffer when you approach problem solving this way. You started your business with passion and lots of wonderful dreams, yet you find yourself dreading . . .

It doesn’t have to be this way.

There is another approach that radically shortens the time needed to address customer service problems while keeping the level of your service high, even higher than before. And you can learn and use this approach right away even if you are currently an employee. In fact, I strongly recommend we all practice using this approach as it is so effective that it will change your work life.

It is to learn systematic thinking and implement effective system.

Let me explain with real-life examples, one by Christine O’Kelly at Self Made Chick and another my own experience.

In How to Achieve Ridiculous Goals, Christine explains how she, as a new Operation Manager of a start-up company, cleared 80,000 customer email backlogs in 3 weeks. She says it took more than a year for the backlog to build to this level. There weren’t enough number of customer service reps to answer these emails one by one. Just demanding them to work faster didn’t work, either. So what did she do? She says:

I created a system analyzing the most common customer service questions, creating pre-made responses for each of the main types of questions, ran the 80,000 emails through a series of keyword-based filters to identify the topic of the email, separated them each into different “buckets,” and then had the CS team run these through a rigged up process that would send out back the correct auto response to each person. In exactly 3 weeks, the backlog was cleared.

This is the power of system. It leverages time and effort. Instead of addressing one problem at a time, you create a system that can address bunch of problems all at once.

Another example . . . I used to work for a large bank (now part of JP Morgan Chase) as International Banking Coordinator. One of my main responsibilities was to take care of Japanese expatriate businessmen, who were not familiar with American banking system. It was in the 90s, and they had never used debit cards, didn’t know the difference between credit card and debit card, not to mention being unfamiliar with various security restrictions used for credit cards. My predecessor’s day was all about answering customer calls. Several months after I took the job, the angry or panicked calls were gone and I could focus on sales calls and learning about other banking services for my own growth.

How did I do it? I figured most problems can be tracked down to certain causes, and addressed them proactively in a systematic manner. As a starter, I added some info on the brochure we were using, educating them about the differences of American banking products and how they can take advantage of them. When I opened accounts for new clients, I took a few minutes explaining them, referring to the brochure, and this system of educating customers pretty much eliminated their confusion and complaints. Further, I would ask my new clients about their function as part of relationship building process, and if they were in sales or senior management, I would ask them if they travel on business to meet their customers. If they said yes, I asked them if I may remove one of the restriction on their credit card that blocks out-of-area usage. My clients loved me for being so attentive and helpful, and I became free from calls like, “ Aaaargh, I am at dinner with the president of my biggest customer and my credit card doesn’t work! What do I do!?”

To sum up, here is the basic procedure to build a good system:

1. Find pattern and categorize the problems
2. Identify the root cause(s)
3. Build system that addresses problems by the categories. Implement and verify the system.

Many people are so used to linear thinking that it will take some conscious learning to understand system. We are conditioned to just jump at the problem and “deal with” them. It takes fundamental change in thinking to sit back first to design and build the system. However, the rewards are huge. As I wrote in 5 Qualities I Find In Successful Entrepreneurs, I think this is one of the most critical skill for entrepreneurs. It is so important that I will write more about this in future posts.

Do you have your story of building your great system?

Thanks to Brad for including this post in Carnival of Sales & Management Success.