Swiss hotelier Cesar Rita, found of the Ritz Carlton hotels, believed that “If a diner complains about a dish or the wine, immediately remove it and replace it, no questions asked.” He was famous for saying “Le client n’a jamais tort” which translates as “the customer is never wrong.” It’s not surprising that when we think of quality dining establishments and hotel rooms today, Ritz Carlton is one name that stands out.
I grew up around the time of Star Wars and The Terminator, and I remember learning a similar phrase – “The customer is always right.” However, in writing this article, I was surprised to learn that it was popularized by successful retailers such as Harry Gordon Selfridge, John Wanamaker and Marshall Field in the early 1900s.
As far as catchy slogans go, these are two of the better ones. However, in building two businesses from the ground up, that in today’s world, sometimes the best thing we can do is to fire our customers.
Anyone who has ever run a business will understand that no two customers are alike. They each have different personalities, needs and, most importantly, expectations. However, experience has taught me that customers tend to fall into one of four types.
The Misers – they buy on price.
As the name implies, these are the customers that focus on price, and price alone. They, unfortunately, don’t understand the concept of “You get what you pay for.” They are the ones that are simply looking for the best deal they can get. The Walmarts and Dollar Stores of the world know that they can make a lot of money serving these people, the only problem is that it’s the most competitive area.
The Tire Kickers – they aren’t serious about buying.
These customers aren’t really serious. They’re the window shoppers of the world. They aren’t really sure what they want or if they want anything at all, so they hem and haw, eating up your valuable time which could be better spent on other customers.
The Kings – they are very demanding.
These customers are not necessarily cheap, but they are difficult. They want a lot for their money. They are often the loudest customers. They want to know they are being taken care of well.
The Keepers – they appreciate your product and service.
These are the clients you really want. They understand that quality comes at a price, and they are willing to pay for it. Some of them want a good deal, but the key for them is the experience they get from your product or service.
Over the past 20 years, I’ve run into all of them. Heck, I’ve been all of them. Personally, when I’m picking up canned food at the supermarket, I become a Miser, but if I’m shopping for a car, I become a King.
As a business owner though, I’ve learned that you have to clean the deck of those bad seeds. I’m talking about those Misers who think they are Kings. Too many of these customers will have you closing your doors before long. I’ve found they aren’t worth the trouble.
The Miser-Kings as I like to call them, want the best of the best, for next to nothing. They will literally suck you dry.
One night with my business partner I remember sitting down to look at the numbers of our business. Things just didn’t add up, but quite quickly I realized the problem. Our Miser-Kings had found the loopholes in their contracts and were taking full advantage. Instead of raking in $12,000 a month, we were averaging between $5,600 and $7,200 and were barely making rent.
While my partner was gun shy, I could see the writing on the wall and knew changes needed to be made. I simplified our policy closing all the loopholes and at the same time increased our prices. People were NOT happy.
We lost 10% of our client base overnight and another 30% over the next month. However, after the dust had settled, our company was making $9,000 a month while reducing our working hours by half. It allowed us to focus more on marketing and getting new clients. If that wasn’t good enough, we had also cleaned deck of those customers who had been causing us the most stress.
I have learned to live by believe the motto, “Underpromise and overdeliver,” but I don’t buy into the concept that all customers are created equal. If you’ve run a business, chances are you don’t either. It’s never easy to turn customers away, but there are times when it could be the best decision you ever make.
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