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Performance & Growth

Dealing with Difficult Customers

Dealing with customers is an art-form. Here’s how you can be an artist.

Dr. Thommie Burger

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The importance of knowing how to deal with difficult customers during the infant years of your new start-up company can’t be overstated. Being equipped with this knowledge and interpersonalskills can assist in ensuring your company’s long-term survival. As cited by Dr David Freemantle, “To create a relationship and therefore a likeable connection with a customer, physical energy is required”.

I would like to introduce you to five customers you have either encountered in the past or will encounter as soon as you open your company’s doors for business.  They are mean!  They are arrogant!  You will require a great deal of physical, mental and emotional energy!  They are your customers! But are they always right?  You decide…

1. Mr Dictatorial Derrick and his girlfriend, Mrs Pompous Priscilla

Derrick and Priscilla are demanding for a number of reasons.  Let’s first take a look at Derrick.  His domineering behaviour is part of his personality.  It may also be his reaction due to a past bad service experience.  Overbearing customers such as Derrick feel the need to be or stay in control and often, such customers are insecure.

How to handle him…

Be professional, don’t raise your voice or fight fire with fire by retaliating verbally.  You are not a child and don’t have to resort to name-calling or shoving matches.  Unfortunately, some adults like Derrick miss their childhood years so much that they regress to childish behaviour.  Demonstrate respect but remain firm and most importantly, calm.  So, even though you may have a vision of lying on a beach somewhere far away like Mauritius where you don’t have to listen to Derrick carrying on and on, aim to work positively towards the resolution of the problem.  Remember to focus on his needs by trying to look past the aggressive behaviour.

Now, let’s take a look at Priscilla.  Unfortunately in life, some people seem to go out of their way to get attention or to be offensive.  She may seem poised and self-assured on the outside, but believe me, she is insecure and defensive.   Priscilla will raise her voice, demand to speak to the manager, use profane language, ignore what you say, attack you personally and like her boyfriend Derrick, go out of her way to be offensive and remain in control.

How to handle her…

If you are anything like me you may want to ask Priscilla whether she forgot to take her “chill pill” this morning.  Fight the urge to say that!  Remain professional and whatever you do, don’t exhibit the same inappropriate behaviour although you may feel the situation warrants it.  Don’t retaliate as you will only pour oil on the fire and embarrass Priscilla, which is the last thing you want.  Remain calm and focus on the problem at hand.  Remember, the reason for her inappropriate behaviour is probably due to some past mediocre service experience she had.  See if you can provide her with an exceptional experience through mending this bad situation.

2. Mrs Chatty Christine

Ever met Christine?  She would phone or meet with you and spend excessive amounts of time discussing immaterial matters such as the grooming of her dog, the weather, her family, her accomplishments, other customer service experiences and what she had for breakfast.

How to handle her…

Refrain from falling into the trap of becoming talkative yourself.  Try to remain warm and amiable but focused.  Appreciate the fact that Christine has an expressive personality and predominantly her natural inclination is to connect with people.  She probably draws her motivation from social encounters and in my opinion, may be the life of the party in less formal social gatherings.  Remain friendly by acknowledging her comments as you continue the conversation to establishing her real needs.  Asking specific open-ended questions and using close-ended questions will assist you in determining her requirements and give the conversation direction.  Remember that she is not your only customer and that your own personal time management is vital.  Keep in mind that you should be diplomatic but to the point.

3. Mr Expectancy Edward

You may know Edward as Uninterested Uma.  They want as little involvement as possible with as little effort on their part… but they expect results.  Both Edward and Uma are uninterested but expect things to get done with very little or no involvement from their side.  They will very seldom provide requested information and will often ask you to complete tasks that are either outside your area of expertise or not within the allowed price they’ve paid.  Edward and Uma’s most favourite excuse is that they don’t have time.  Phrases such as “I paid you for this so I expect it to be done” and “If I knew I had to do all this work myself I wouldn’t have hired you to do it”.

How to handle them…

This is where it gets tricky.  As a service provider, you need to get pushy with Edward and Uma.  Get used to calling and emailing them repeatedly.  Make sure you are transparent about your costs and although you like it not, becoming a nagging supplier is inevitable.  Focus on the facts and explaining the importance of the customer’s involvement in ensuring the success of your service delivery.

4. Mr Know-it-All Newton

Probably one of the most difficult customers to deal with is Newton.  Even though he approached you, he always knows better.  Newton will tell you about his knowledge, experience, accomplishments and why he is the best thing since sliced bread.  He has a very specific idea about what he wants and he has very little interest in your thoughts and your experience as the service provider.  Beware!  Newton has pre-conceived ideas and expectations.  Tread carefully when dealing with Newton because chances are that you will never meet his expectations.

How to handle him…

Some service providers are happy to do exactly what Newton wants no matter what they feel or think of it or whether it is the best thing to do.  If you feel you have an ethical responsibility to point out the pitfalls in Newton’s expectations, you are most probably heading for some degree of conflict.  Newton secretly believes that he could do your job much better and that you have little or no specialist knowledge you can convey.   In some instances, if you agree to do it Newton’s way, he may very well turn around feeling very unhappy about the fact that he had to do all the work himself.  Be very careful to commit to Newton’s expectations and way of doing things.  Be explicit and clear about what you can do, what expertise you can offer and what will be included in the service.  Set the correct expectations before doing the work.  Under promise and over deliver!

5. Mr Wheeler-Dealer Wesley

Wesley doesn’t believe in the price you see is the price you pay.  Phrases like “I’m sure you can sharpen your pencil a bit more,” “how negotiable are you” and “your competitor quoted me 40% less,” is common when dealing with Wesley.  He believes that your first price is just an invitation to start the negotiations.  They like the “buy 1 get 4 free” scenario.  But remember!  If you cut on price you can’t cut on the quality of the service delivery.  Wesley will still expect the same high quality service.

How to handle him…

Firstly, consider the following:

  • Do you want to get involved in price wars?
  • Do you want to be known as the cheapest service provider or rather the service provider with the finest all round service delivery?
  • Can you justify your pricing if you charge a premium for your value-added services and expertise?

The best way to deal with this type of customer is to focus on the facts and reasons for your pricing.  Focus on your sales ability and convincing Wesley that your service has various value added benefits that he won’t find anywhere else.  Never badmouth your competitors by focusing on their flaws and your subjective and/or negative opinion of why they are cheaper.  This is not good business ethics.

Focus on what YOU can offer.  Provide examples and testimonials of past satisfied clients.  Highlight the fact that you offer an exemplary service.  But remember; don’t promise or claim something that you can’t deliver on.  If you fail, Wesley may very well come to haunt you!

Dealing with different customers and different personalities can be very challenging.  But you decide… Is the customer always right? Perhaps not, but saying that to him or her won’t necessarily be the right thing to do.  Your ability to dealing effectively with such conflict and difficult situations will in most cases win you the loyalty of these customers.

Remember, always give your customer quality at the point of contact; in the event of encountering an unhappy customer, use bad experience recovery as your key strategy to turn the situation around to your benefit.  Bad experience recovery is vital!

Founder of JTB Consulting, a leading Business Plan Consultancy that provides practical, unique and affordable Business Consulting and Business Plan Solutions to entrepreneurs, start-up businesses and existing companies. Founder of Animazing, a Marketing Agency that designs unique animated videos; a communication and marketing medium clients use to deliver their messages in an effective, engaging and memorable way. Thommie is a Summa Cum Laude MBA Graduate and holds a PhD in Entrepreneurship and Business Management.

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1 Comment

1 Comment

  1. Deidre Tavares

    Feb 29, 2012 at 08:49

    @Thommie
    Great article thanks, Ive just dealt with a wheeler-dealer client, wish I read this before I dealt with him. Thank you

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Performance & Growth

Benefiting From The 80/20 Principle In Business

It is by leveraging the compounding effect of focus that entrepreneurs can enjoy exponential success.

Gil Sperling

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By our very nature, entrepreneurs are explorative, often traversing a multitude of paths to success at any one time. While this approach is invigorating, the truth is that the lack of focus cannibalises new businesses before they have a chance to take off.

I have found that honing in on what really matters is imperative for success, an approach that aligns well with the 80/20 rule, or Pareto Principle. While initially an economics ratio that 80% of all wealth is owned by 20% of the population, the notion that focusing effort on the important aspects leads to more significant results, rings true in my business and personal life.

Letting Go of the Other 80%

The catalyst for utilising the 80/20 principle to manage my focus, was a meeting I had with a potential investor. At the time, my partners and I were involved in 7 or so businesses, in addition to ad-tech company Popimedia. These ranged from systems to manage doctor appointments to a social network for new parents. The investor we met with was enthusiastic about us, but would not provide funding due to our lack of focus on a single venture.

It was sobering feedback. We decided to cut chords with the other businesses and focus solely on Popimedia (the golden 20%), a decision that I believe lead to the company’s success.

Related: 7 Steps To Master The 80/20 Revenue Model

The Compounding Effect of Focus

The differentiating factor was focus. If we had chosen to pay attention to one of the other businesses instead, then that would have become the successful venture.

Focus works like compounded interest on an exponential curve; the more you centre your energy on something, learn, and reinvest your knowledge back into it, the better it will perform over time. Subsequently, any endeavour that is not receiving focussed attention from those heading it up is doomed to fail.

I use this principle in my VC investments too; I will only back someone who has unwavering focus on their venture, along with the ability to embrace failure.

Implementing it Day to Day

Being selective in what to focus on not only applies to those big business-defining decisions, but, perhaps even more importantly, to the day to day activities too. There are several ways in which the 80/20 principle can be utilised to guide the investment of focus:

1. You Cannot do Everything

Entrepreneurs are great at what they do, but we need to accept that we cannot do absolutely everything, on account of limited time. Choose the most impactful 20% of the tasks and focus on those.

Related: Bob Skinstad On Making An Impact With The 80/20 Principle

2. Delegate to Smart People

I find it useful to accept that not everything has to be perfect. While you may not receive the same quality when you delegate, the freedom you gain from having time to focus on the important things provides a much higher return. And if you have surrounded yourself with people who are smarter than you, you may be surprised.

3. Make a Bad Decision if You Have to

I have one rule when it comes to decision making: “Rather make a bad decision than no decision”. When you have a solid vision-based framework, making quick decisions to prioritise (or omit) tasks becomes easy, and having the ability to embrace failure allows for quick adjustments if it turns out to be a bad decision.

As entrepreneurs, we need to continuously recalibrate our focus by asking ourselves; “Am I pouring this energy and effort into the right 20%?”

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Performance & Growth

Your Organisation’s Values Must Generate Value – Otherwise Why Have Them?

Your values have to be the foundation of your organisation’s present AND its future if you are going to ensure sustainable value for your stakeholders.

Brian Eagar

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In the modern world of business, where social media compels organisations to tell the truth, transparency and ethics have become essential. Consumers no longer only care about getting value for money, but also about what your company values and how that transpires in what you offer.

Defining a set of values that describes your organisation’s heart, i.e. your organisational culture, is immensely personal and, if lived, immensely powerful. Successful leaders realise that an important factor in building brand loyalty is getting their organisations to wear their proverbial hearts on their sleeves and to authentically honour it in the way they do business. Sadly, many organisations define their values as a tick-box exercise that serves as mere decorations for their website.

Just think of infamous examples like KPMG, SAP and Steinhoff as well as more recent culprits like Bain and Gartner: Besides the millions many of them had to pay back, their severely tarnished brands are still costing them dearly. It is clear that if the values you proclaim to espouse are not overt in your client-facing staff and the way you do business; this lack of integrity will eventually catch up with you. As what happened with KPMG, this not only leaves you with less clients, but with a diminished team too. High potential employees do not want to be associated with leaders who don’t honour the organisation’s values.

Related: Here’s How To Value Your Business

For the organisation’s values to truly become visible in how they engage and do business, it has to start with the leaders and their message. Those we lead must see it in our example on a daily basis. Our organisation’s values serve as a moral compass, but if the leaders responsible for steering the ship do not abide by this compass, our crew can’t get us to where we want to go. Our team members either follow us, become disengaged or abandon ship. They will not make an effort to uphold the values within a business where the leaders themselves disown it.

As a business, we make a certain promise or commitment to our clients. However, if our values do not underpin this promise and if we, as the leaders, don’t role-model our values to achieve this, it remains an empty promise. Therefore, it is important to keep the following aspects in mind when selecting or re-viewing your organisation’s values:

  • Before defining your values, you should ideally define what kind of culture you want your values to underpin. Consider what is important to you and what is important to your customers: Is your organisation’s culture customer-centric, as it aims to exceed customer expectations, or quality-centric because of its strong focus on excellence? Perhaps your organisational culture leans more toward being cost-centric, as providing real value for money is important to you. A service orientated organisational culture, on the other hand, implies that providing your customers with the best possible experience is top of mind for you. Your organisation’s culture could be one of the above, or your culture could consist of a bit of an eclectic mix.
  • Once you have defined the above, choose values that will help your desired culture become a reality and that your team members and customers will buy into. Again, ensure that it captures the heart of your organisation.
  • Values are personal and we all interpret them in our own way. Although we don’t want to promote a homogeneous culture, we do have to communicate what we mean by our values. Therefore, the next step is to craft a set of behaviours that describe how the individuals in your organisation will live these values. Again, it is important to emphasise that the example must be set by the leaders but that it is the responsibility of every team member to role-model these behaviours.
  • Finally, your organisation’s values must come alive and inspire, as they are intended to, and it is your responsibility as a leader to make this happen. Ask your team and your customers to tell you how they will feel if these values are lived authentically, and then measure the organisation against their feedback. If your team and your customers do not experience your values in this way on a daily basis, chances are your values are probably still dormant.

Related: Harnessing Value-Based Delivery To Create Customer-Centric Solutions

It is the responsibility off all leaders to inspire hope and trust in the organisation’s future in good times as well as bad times. To keep your team engaged, you constantly have to paint an emotive picture of what the future looks like for your organisation. If you connect this picture to your values and role-model them as a leader, they become a powerful tool for fostering the emotions and engagement that will help your team members buy into your vision.

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Performance & Growth

How You Can Achieve Growth Through Access To Markets

If your goal is to scale your business, you need to increase your sales and access to markets. We found the best way to do that was through key strategic partners whose existing clients were our target market.

Dov Girnun

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Many sales-led organisations have come to the same conclusion at some stage in their business growth life-cycle: In order to build a sales-led business for scale, you need to adopt a multi-channel sales distribution strategy. In our world, this means a combination of direct sales (boots on the ground), digital marketing and strategic partnerships.

After five years we had grown Merchant Capital as far as we could organically. We needed a much larger sales distribution channel. Understanding the need for a multi-channel sales distribution strategy is one thing, execution is something else entirely. After paying significant school fees, our strategic partnership distribution strategy was crystallised, and off we went to bring our chosen partners on board.

1. Finding strategic partners

Re-calibrating our sales strategy led us to the conclusion that we needed a strategic partner who could bring us ‘one-to-many’. In other words, we needed to identify potential partners (‘one’) who have ‘many’ sweet spot clients who are also our target clients, and whom they are already servicing with other products daily.

The end result of this three-year process has been strategic partnerships with Standard Bank and Discovery Insure. In the case of Standard Bank, every business that utilises a Standard Bank point of sale (POS) system can apply for a cash advance from Merchant Capital. Thanks to the partnership, Standard Bank POS merchants can access a cash advance within less than 24 hours of application.

It sounds incredibly simple and straightforward, but the process of identifying the right partner, creating the value proposition and then building a relationship that can result in such a partnership is anything but.

The most crucial element in this process was identifying partners who could benefit as much from a relationship with us as we could from them — in other words, ensuring a strong mutual value proposition.

When you have a business need, it’s easy to convince yourself that your prospect or potential partner needs you as much as you need them. Unless you are absolutely sure that this is the case however, there’s a strong possibility that you end up having a life-changing initial meeting and then never hear from them again.

This can happen for one of two reasons: Either you haven’t found the right partner who will also benefit from a partnership with you, or you haven’t been able to adequately distil that value. If this happens, very often you’ve missed your opportunity and won’t get a second chance.

Related: How Merchant Capital And Retroviral Were Built To Sell

We therefore had to be extremely disciplined in identifying which partners we wanted to approach. We focused on removing any subjectivity from the process by building an objective ‘partner scorecard’ that allowed us to weight certain attributes of the partner (such as a large client base, deep client relationship and mutual value proposition) with what we could offer them. This empowered us to make educated decisions.

2. Making first connections

Identifying the right partners is only the first step — now you need to make contact. By design, the partners we had identified were behemoth corporates with much larger priorities than meeting us, and convincing them on the upside of a strategic partnership needed to be robust and well-articulated.

Step one is getting your foot in the door. We began the process by identifying ‘champions’ within the partner organisation. This process takes time. We were able to secure meetings and found that running pilots was a good way to provide demonstrable evidence of the proposed ‘win-win’ proposition.

Early on in a business life-cycle (before any traction and brand equity exist), we found that leveraging off our network of shareholders and mentors to make introductions to the appropriate decision-makers within the organisation was of great assistance.

When we signed our previous investment deals, this was actually a key consideration for us. For obvious reasons, growth funding holds value, but the network and mentorship that the right board and shareholders bring to the table can be much more valuable.

Until you’re able to build brand equity and gain traction with a partner (or client), the right networks, introductions and referrals help you secure the meetings you need to prove yourself. And then you need to start small. Don’t expect a meeting with the CEO. Start with someone who could be your champion within the organisation.

3. Finding your champion

Finding a business sponsor to champion the partnership within the corporate partner is fundamental to your overall success. They will understand the internal friction and potential hurdles in navigating the naysayers within the organisation.

There will always be people, and rightly so, who challenge the partnership and ask why they can’t just do it themselves. If you don’t have an internal champion who is engaged and passionately buys into the partnership, then the initiative will most likely fall over and die.

Being the first mover in a partnership with an innovative start-up has many advantages if the product takes off. Often, these people want to be involved on the ground floor.

That said, big corporations are still taking a chance teaming up with young companies (brand risk and financial losses, to name a few). The upside of having already landed a smaller partner where significant traction can be demonstrated goes a long way in softening the initial concerns and risks from the large corporate’s perspective.

4. Nothing worth having can be rushed

The one word that comes to mind when thinking about this journey and the past three years is grit. In our experience, landing great partnerships takes many years of relationship-building and demonstrating solid business metrics and track record.

Related: 5 Lessons for Entrepreneurs from the Most Famous Sling in History

As I’ve already mentioned, our discussions with Standard Bank began three years before doing the deal. What we found useful in the early days of the partner discussions was communicating that in the next quarter we were going to achieve certain results and then coming back the following quarter and presenting the fact that we had hit our milestones, or hopefully exceeded them.

Just as you would do with an investor, this built a track record and credibility. The rhythm of checking in every few months and reporting back on progress is a great way to build the relationship over time without being too pushy as well.

Pulling it all together

There are two types of growth: Organic growth and scale. We’re an organisation that wants to scale. We’re aiming for exponential growth. This wouldn’t be possible without exponentially increasing our access to market.

We identified that the best way to do this was through the right strategic partner, but there are many channels that business owners can consider.

The important thing is not to just do what you’ve always done, unless you’re comfortable with organic growth. Evaluate your current model, and critically examine what you need to do to increase your sales, distribution and access to market. There is no one right way to do this. It took us time, and we needed to learn a few tough lessons before we were confident in the direction we wanted to take.

Related: My Business Is Growing… What Now?

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