Your business has a problem: predatory customers.
You know the ones; the self-absorbed customers who do their best to squeeze huge amounts of time, money, resources and benefits out of your business. These customers are disloyal, demanding and difficult to please.
20% of your customers create 80% of your problems.
Most of us recognize a toxic customer once they're in our business, but what about when they're prospects? It's common for business owners to treat this as a customer service problem, or a product problem.
But it's actually a marketing problem.
And most businesses have no idea their marketing attracts toxic customers. Even worse, these customers seem to be focused on squeezing as much as they can out of you - even if it ruins your business.
Haphazard marketing ruins your business. But which customers do this kind of damage? Should you work with them or weed them out? What sort of marketing attracts these nightmare customers?
You'll need to find these customers before deciding what to do with them. They come in 5 toxic flavors, but their goal remains the same: to take from you.
Related Article: 4 Diabolical Customers (And How to Deal With Them)
The Arranger: Tries to Adjust Deals, Circumstances and Events
They always want things to be win/lose in their favor. Arrangers change terms and agreements; they demand options that don't exist and push for concessions that only benefit them.
Cautionary tale: Mitchell ran a temp agency. His company had just won a major contract with a well-known business. If all went well, this contract would 10x his revenue, in one year.
But things didn't go well. The Arranger had him sign a contract forever waiving his right to take legal action if something went wrong.
Not realizing his mistake, Mitchell hired hundreds of workers; he took out a loan to cover payroll while he waited for The Arranger to pay. But The Arranger decided they weren't going to pay. The bank demanded payment. The Arranger's refusal to pay meant Mitch's business was forced to shut down.
Dangerous marketing that attracts this customer:
The Arranger looks for flexibility. While the specifics in each situation are different the general idea is the same. Arrangers are drawn to marketing that communicates one of two things:
- Fear of losing their business. When we've got plenty of options and lots of prospects we're usually more focused on fairness than being "flexible". Experienced Arrangers know your inability to walk away gives them leverage. They use this leverage to get the terms and conditions they want.
- An unhealthy willingness to be flexible. You can afford to be inflexible when you have lots of options. When you're feeling desperate, it's easy to do whatever it takes.
Offering free estimates to anyone who asks, including concepts in your marketing like "we're here to make you happy," or "the customer is always right" attracts Arrangers.
The Corrupter: Reliably Dishonest and Consistently Unethical
They'll say or do anything to get what they want. They'll lie to you, pester you to do things you're not comfortable with, or ask you to lie for them. They're always trying to erode your morals and values.
Cautionary tale: Jan sells cupcakes online. Her business is new but things are going well.
Along comes a Corrupter. She places an order with Jan; 336 cupcakes for an upcoming birthday party. They request a custom design, fresh strawberries, German chocolate, the works.
Jan completes her order and delivers the cupcakes herself. A week later The Corrupter initiates a chargeback with her credit card company claiming she never received her order. She posts a nasty review on yelp.
Her credit card company believes her, giving The Corrupter a full refund. Jan loses a ton of money. Her business suffers as potential customers take their business elsewhere.
There are two major things that attract The Corrupter:
- Poor boundaries. It's common for The Corrupter to try and feel out their targets. The last thing they want is to take the fall for their bad behavior. Questions about hypothetical scenarios involving "grey areas" are red flags. Questions about what you're willing to do to earn their business or their loyalty are red flags.
- No quid pro quo (this for that). If you're negotiating with a customer and they ask for a concession, they need to be willing to give you one in return. If you give them a discount, they should be willing to do something for you.
Corrupters are attracted to marketing that conveys you're willing to accept a one-sided relationship or that you're willing to accept abuse.
Strong boundaries and the ability to say "no" gives you power and protection against The Corrupter.
Related Article: The Impact of Customer Reviews
The Disrupter: All About Control
These customers demand special treatment; they want to be in charge. They throw tantrums when they don't get their way and refuse to use your products as intended. They boss your employees around and hoard access.
Real-life example: Apple’s design focus comes from a strong control/perfectionist culture. They know their way is the right way. Those that don’t like it shouldn’t buy their products.
Microsoft, on the other hand, has a strong peace-making culture. Customers threw a collective tantrum about the Windows 8 design. Microsoft announced they were fixing the problem with Windows 10.
Dangerous marketing that attracts this customer:
Businesses with peace-making or fun loving cultures are most at risk. If your marketing tells customers that you prefer to avoid conflict, or you're all about fun, you’re an easy target for The Disrupter.
Disrupters are far less likely to get their way with businesses that have a strong perfectionist or control culture. Businesses unknowingly attract Disrupters with marketing messages like:
- “Designed around you”
- “Have it your way”
- “The customer is king”
Messages like these are music to a Disrupter’s ears. And a cash flow disaster when you’re missing the right systems.
The Slanderer: Uses Guilt and Shame to Control or Punish You
They'll tell you that you've let them down. They'll lie on you or call you names, whatever it takes to get you to lose your cool. When you do, they have the justification they need to renege on their commitments.
Cautionary tale: Fitz treated his vendor like "the help"—because they were. There were a thousand other firms that could do the same job they did for less. Fitz made sure his vendor knew it.
"I'm your biggest client. My company pays your bills."
His vendor suffered for it. They struggled to keep employees and constantly discounted their price in order to "earn" more work.
Dangerous marketing that attracts this customer: if your business lacks measureable uniqueness, you're leaving yourself open to The Slanderer.
Businesses that lack uniqueness feel the sting of being beaten by competitors and passed over by customers.
They realize there's no compelling reason (besides price or terms) that compels a customer to do business with them. So they send marketing signals telling customers that they're willing to abuse themselves to make the customer happy.
You've seen the marketing pieces:
- "We care about our customers" (aren't you supposed to do that?)
- "We never stop working for you!"
- "The customer is king!"
The Slanderer believes that there's nothing special about the businesses they target and they remind them regularly. It’s how they get what they want.
The Schemer: Looks for Loopholes
They use their resourcefulness to find a way over, under, around or through your rules. These customers use creative ways to game the system and manipulate you.
Real-life example: A man in China purchased a first-class ticket on Eastern China Airlines and used it to scam a year's worth of free meals at the VIP lounge in Xi'an airport.
He arrived before his flight and ate at the lounge. After he finished, he changed his flight's departure to another day.
He repeated this process over and over and over, eating some 300 meals in a year. Then when China Eastern Airlines started investigating, he cancelled his ticket before it expired and received a full refund.
Dangerous marketing that attracts this customer:
- Does your product or service come with a guarantee?
- Do you make promises to your customers?
Businesses often make promises without adding conditions. A Schemer typically targets these areas first.
If you're offering a money-back guarantee, Schemers want to see that your guarantee gives them the right to demand a refund indefinitely and keep your product. It's ideal when there are no conditions they have to meet. It's a bonus if you give them cash or incentives.
We make promises because we want to build trust with our customers. Schemers look for ways to exploit those promises. If you make a commitment or create an expectation it should be fully formed and complete, without loopholes.
Related Article: How to Turn an Ordinary Client into Your Biggest Fan
These Customers are Disasters Waiting to Happen
If you get any of these customers, you should show them the door right away? It depends.
If you're unprepared and unsure about how to deal with the kind of behavior we've covered here, it's a good idea to move on.
On the other hand, getting a new customer is expensive. It takes time, money and effort. If you're able to turn them into all-stars these customers often spend as much as 10x more than your average customer.
What if these customers are already in your business?
Your decision is the same.
If you make the marketing changes we've talked about, customers will have to decide if they're interested in changing with you. If old marketing habits brought these customers in, they won't be happy. Expect things to get worse before they get better as these customers try to put things back to the way they were.
If they accept the changes, their behavior will change. Those that refuse will leave (on their own or with help).
Your Marketing Shouldn't Attract Customer Predators
All-star customers trust you, so they're more understanding; and insist on giving you control. You're no longer expected to bend over backwards or take abuse for a chance to earn their business.
They don't fight, bully or manipulate you for the best deal. They realize you're unique, that you're the only one that can offer that one thing you provide.
Getting customers is so much easier when they're loyal, trusting and easy to please.
How do you attract and train the loyal all-star customers that spend 10x more money with your business? What are the specific steps you should take to turn Nightmare Customers into All-Stars?