Nuisance Customers: Fire Them

Businesses are entitled to dump high-maintenance consumers who constantly hector them with capricious customer-service demands. Pro or con?

Pro: Ditch the Deadweight

Sprint (S) made headlines this summer when it “fired” 1,000 subscribers whose calls to customer service were deemed excessive. Few telecom companies are known for outstanding customer service, and Sprint’s decision did little to improve its image.

But corporations must maximize their ability to effectively serve the majority of their customers. There are times when it makes good business sense to give up on extremely high-maintenance customers who are a drain on resources:

When it’s a matter of cost-effectiveness. It’s expensive to cater to customers who make excessive demands. Even retailers like Lands’ End, whose customer service and return policy are legendary, have been known to cut off customers who chronically return merchandise and incur shipping, reshipping, and processing costs that have to be passed on to all customers. Financial-services provider ING Direct deliberately operates in a no-frills mode that can’t accommodate hand-holding but raises returns for depositors thanks to the firm’s low overhead.

When it’s a matter of security. Some frequent callers have less than honorable intentions—to finagle credit out of their service providers, for example, or, as was sometimes the case in the Sprint situation, to try to get information about other customers’ accounts.

When it’s a matter of employee retention. Contending with irate, difficult customers goes with the territory for tech support and customer service personnel. But dealing with chronically abusive customers burns out employees and sends them looking for new careers. Recruiting and training new workers takes time and is costly.

Sprint may need to get its house in order with regard to how it serves all its customers. But even the best-intentioned efforts cannot succeed with those who simply refuse to be happy, or worse, are being dishonest. Parting ways with these customers may be a necessary step in the journey toward a better overall record of service.

Con: Rise to the Occasion

U.S. corporations have become the envy of the world thanks to the discipline of the free market. Companies such as Sprint that seek to close the door on so-called nuisance customers do themselves a disservice. High-maintenance customers, annoying as they may be, provide valuable information about products that are poorly designed or services that don’t live up to their billing.

Gadfly consumers do companies and other customers a favor by calling attention to problems. Rather than banning the bearers of bad news, companies should pay attention to their complaints and track them with sophisticated software. After analyzing this data, a company may decide to redesign or reprice a product or service or to change subcontractors.

Given the problems that U.S. multinationals have experienced this year with shoddy or dangerous Chinese products, it’s even more important that they closely monitor customer criticisms. Imagine if Wal-Mart (WMT) had ignored a customer’s complaint about his dog getting sick from Chinese-manufactured pet food because that particular shopper had returned lots of items last year.

And all companies that provide retail goods must adjust to doing business in the Internet era. Although losses due to shoplifting may decline as more consumers do their browsing and buying online, the rate of returns is likely to increase because a picture on a screen is no substitute for touching an item or trying it on. Some of the money once reserved to cover losses due to “shrinkage”—retail jargon for stolen, lost, or broken goods—should be reallocated to handle increased returns from e-commerce.

Dealing with vocal or even obnoxious customers is the price of doing business in a free market. If Sprint and Lands’ End ban certain consumers, these shoppers will click on the home page of Verizon Wireless (VZ), L.L. Bean, and other rivals.

Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.

Reader Comments

MITBrad

Nuisance customers are usually those who've already gotten the short end of the stick--often multiple times. Although it may make "business" sense to cut them off, these customers are usually creations of the "ethical" shortcomings of decisions made by these companies. After all, everyone knows that there isn't a single wireless provider that hasn't sold its soul.

random

There are customers for whom you could fetch the Holy Grail, the Excalibur, King Arthur's bones, directions to the fountain of youth, Blackbeard's treasure, and a chai latte in under 30 minutes, and they would still be unhappy. They would call you every day about how the Holy Grail is too old, Arthur's bones are too dusty, the fountain is too far away and they don't want to spend the gas money or airfare to get there, Blackbeard's treasure comes in a shoddy old box (well, gee, after 300-plus years), and that their chai latte was too hot, constantly threatening to bolt from your business and go somewhere else unless you give them some sort of ridiculous discount or voucher.

I've seen many customers being deemed a nuisance just because they won't roll over and accept a company's poor judgment or sloth. You can't fault these people if they don't want to pay $300 for a new nightstand, then have to call for weeks to find out that their order hasn't even been placed with the factory. But at the same time, I've seen customers constantly reject obviously good advice from consultants and threaten those consultants every day with tale after tale about how dissatisfied they are because they think that the more they try to threaten and intimidate, the more companies will cater to their whims. That second breed of customer needs to find another place to annoy. If you want to raise fully legitimate concerns (your dog dies after eating Chinese-made treats or your books haven't been shipped for two months after you ordered them), that doesn't make you a nuisance. If you want to complain for the sake of complaining and refuse to be satisfied no matter how much a company bends over for you, I as the owner of a business you're harassing and whose associates you're driving nuts, would tell you to go away.

Dealing with obnoxious customers is not a consequence of a free market. It's a consequence of some customers insisting on being obnoxious and abusing every benefit and service the company has to provide. Not every criticism is gold--in fact far from it. If you're so unhappy with a company that you have to call them on a regular basis with complaints and nothing they do ever satisfies you, why don't you go somewhere else? Here's a hint. If you keep complaining to any available customer service rep over and over again about how bad of a service you're getting and how it could possibly be made up to you over the next millennium but refuse to work with another company that would better suit your needs, you're an obnoxious nuisance and the company has every right to fire you.

Chet Brewer

I'm middle ground here. Back in the old days, Sears empowered its store managers to fix a customer problem, and as a result, when they didn't, it was the result of a value judgement and knowing their customers. Call center employees don't have the power to fix anything but a simple problem, and hearing over and over again how sorry they are only makes the situation worse. Firing a customer needs to be a careful decision. There are some who are just too toxic, but firing them for using customer service lines is both stupid and short-sighted. If they fired them for being personally abusive, OK, and told them it was because of their profanity, etc.--but for calling too much, no, very stupid. Sprint won't get my business when my AT&T contract is up.

MyDad

Many thanks to our nuisance customers, for without them Corporate America would not be the envy of the whole world and would not have owned the majority of name brands. It is time for Corporate America to trim extremely high executive salaries while continuing its tradition, namely 100% customer satisfaction.

KenRob

I agree, MyDad. As close to 100% satisfaction should be the business goal. A customer who is merely a "nuisance" can be satisfied. Dumping the nuisance customer only satisfies the employee who is irritated by that customer.

When you get to the customers who are sociopathic, fraudulent, or criminal, it's another story. You have to dump them to save your employees' sanity.

Logic

When have companies become the servants of the majority? When were they deemed the poor unfortunates that would take Atlas' position holding the world upon their shoulders? The thing with a business is, it's a business, not a service. They are there to make money, and that is done by giving you a service, and you pay them for it. If you raise a problem with them, and they are a smart company and you bring it to their attention correctly, they will fix the problem. But if it's just constant complaining or it is something the company can't change, they shouldn't have to listen to you.

andrew

Companies are well within their rights to refuse service to customers when it is not considered discriminatory by law. They are the ones who have to live with the consequences of their actions. That is the mechanism of free market--the actions of management and reaction of the customers as measured by profitability.

Companies are well aware of the bad publicity involved in declining customers, so they don't lightly make such decisions.

I agree with all other commentors here in believing that legitimate complaints are good feedback for businesses and a reasonable way of relieving frustration for customers. I have gone through "blow-up" therapy several times myself. I apologize to the customer service reps who happened to be on the other end. Yet, I have never been fired as a customer.

Most of the customers who have been fired are people who habitually return "slightly used" clothes or make false complaints of dropped cell phone calls to stay under payment-plan minutes. In other words, those people who believe they have the right to be a free rider in society. They also think playing by the rules is for suckers and big companies are too profitable.

With modern transactional technology and databases, it's very easy to find statistical outliers.

Standing up for these malcontent, freeloaders means degrading my own rights as a consumer and increasing my costs of goods.

Dubya

This issue ultimately comes back to the same thing that most customer issues do, expectations. Before the advent of multinationals, most products for which you would expect "customer service" had enough margin in them to support that level of service. In the current business environment, in many cases it simply doesn't make sense since to offer "customer service" anymore. As a result, companies have to manage the difference between customers' old expectations and the new economic realities. These realities include things folks don't want to admit. For example, if you want tech support on a $500 PC that 15 years ago was a $1,500 PC, the tech support is either going to be outsourced or it simply won't exist. The economics of having it be U.S.-based are simply not feasible. At the end of the day, the market is functioning exactly how it should. Data tells us again and again that consumers value the low price more than the service offered (see Wal-Mart). Was Sprint smart to fire those customers? The very fact that we are having this discussion says no. Most smart companies are figuring out how to provide some type of tiered service to those willing to pay for it or those who purchase a premium product. If you happen to be one of the customers who values service more than price, find a company based on that principle. If you are not, it's time to adjust your expectations. You cannot have your cake and eat it, too.

JimG

Dubya makes a good point about tiered customer service. There are many customers out there who are willing and able to pay for a lot of hand-holding, and they're not only interested in luxury goods. But good customer service is no substitute for quality. Yes, customers want low prices, but not if the item they just purchased is going to fall apart a month later. Case in point: My wife was bargain-hunting recently and picked up a made-in-China electric coffee maker sold by Home Depot under its private label--at the same time we purchased a new GE stove. When she told me it cost $14.99, I laughed and said I'd be carrying it out to the trash sooner rather than later. It had a polished metal finish and looked nice enough, but it literally fell apart over the next few weeks. Sure enough, we had to go out and buy a $40 General Electric model that's still working three months later. If my wife had been one of those nuisance customers, she would have marched back to Home Depot and demanded her $14 back. And Home Depot would have learned that low price isn't the only thing customers want: They want reliability. With the growing interest in sustainability, durability is going to become of more importance to the American consumer, who traditionally assumed this was a given.

george

I believe in the old adage that one dissatisfied customer will tell 10 others, while one satisfied customer will tell one.

Every company should be pleased to have customers complain--it gives them a chance to fix their products/services before the whole market realizes what is wrong.

After reading about Sprint's decision, and having left Sprint years ago for bad service, I can safely say that it is not a market leader due to the disdain it holds for its customers.

Over the past 10 years, Sprint's stock price has gone from 26 to around 19. Verizon went from 41 to 45, and AT&T went from 32 to 42. I think that proves my point.

Bart

One great example: Best Buy has risen from the ashes. This was mainly accomplished, in my opinion, by changing the view of customer service. Prior to 2003, Best Buy had a Sprint type attitude toward its customers. Then there was a change. I am not sure who or what was responsible for the change. It was a profound change at the consumer level. Best Buy had fallen from a high of about $38 a share in 2000, to $11 a share by late 2002.

Now that customer service has made its turnaround, it has been a steady climb ever since (trading at around $50). This, from a company I swore I would never do business with again. I now own stock in it--we fickle consumers.

tj

I was hoping to be one of those chosen to be "fired" by Sprint, because there is no such thing as customer service anymore. I was not fired, because I pay my bills on time and am a good customer. I am also a very, very loyal customer. But when I am repeatedly lied to by first-level customer service reps, not in this country, and denied the right to speak to a manager, and add to this the very poor service provided lately, I'm gone as soon as my three contracts are up. Unfortunately for me, my latest two years only started in March, 2007. Were it not for the $200 penalty per phone for early termination, I would already be gone. I spent 13 years with Cellular One until the service got so bad I couldn't complete a conversation, and finally terminated. If I am treated properly, I'm a customer for life. I will leave Sprint in March, 2009, because of its lack of customer service, unless I can find another way out before then without paying for its lack of service.

sue

Rather than dumping nuisance customers, businesses should make reasonable rules, follow them, and be willing to part with customers who can't deal with them.

Nathan

I believe that corporations have every right to dump customers who hassle them too much--especially criminal or abusive ones.

On the other hand, I would be reluctant to deal with businesses that used this practice. I would have less reason to trust their customer service and good intentions.

It usually damages trust when companies cut off customers, so they won't do it very often. The market (and human nature) has this built-in check-and-balance. Therefore I cannot ethically condemn the practice of cutting off trouble customers.

jw

I was also hoping to be "fired" by Sprint. I am also a reliable longtime customer: My first cell phone was an analog Sprint Phone.

But after having a problem with my phone upgrade due to a typo by a non-English speaking Sprint employee, I experienced incompetence, lies, and hours-long waits on the phone, Then more incompetence and sheer laziness on the part of Sprint store employees. I am gone after my contract expires. Sprint took a simple problem and stretched it out into more than a week and wasted at least eight solid hours of my time. And then it had the nerve to reject my rebate on some obscure fine-print technicality. Sprint PCS will never--I repeat never--get any further business from me after this contract has expired.

And whenever people discuss phones within my vicinity, I make sure to tell them what a nightmare having Sprint "service" really is, and what they have to look forward to if they are ever unfortunate enough to do business with these imbeciles.

David

I think the execs over at Sprint and at every company that offers a product or service should read The Ultimate Question by Fred Reichheld.

In that wonderful little book, they would learn that you cannot improve your business model in the long run simply by cutting off your "high-maintenance customers" but rather you have to adhere to a process of taking in customer feedback and finding ways to improve your product or service for those clients that matter, and then measure yourself by how many promoters vs. detractors you have created. That's a simplified explanation of the net promoter score and the process to improve it.

Although the process sounds simple, not many companies have good net promoter scores, which tells me many customers, employees, and shareholders could stand to benefit if more companies took an honest assessment and instituted these business practices.

Read the book. I think you'll agree.

Imre

Generally, American customer service has gotten disastrous. I agree with Random, above, that companies usually deem people who won't just say "OK" as some sort of nuisance. Companies generally run well if all goes according to plan. When they have to adjust after they screw up, there is a problem. Someone making a dollar an hour in India isn't equipped or authorized to make things right.

I think some business models may be best suited to dropping customers that request anything more than the bare minimum. The problem is that generally doesn't jive with corporate platitudes that emphasize customer service. Perhaps honesty is in order--if you don't offer service, but a cut rate price instead, just don't lie and market your self as customer-oriented and dedicated to service.

Fernanda

Some customers are definitely irrational, and most important, think rules are for everybody else but them. I have a speed dating company in D.C., and I had to fire two customers in the last three years. My corporation is definitely customer-oriented and I have tried everything to satisfy them, but they ended up being a burden to my company. I wish I had not tried to please them so hard; they would have left and not cost me so much stress, time, and money. Both of them demanded so much attention and they were too time-consuming and never happy--worst of all, they kept coming back. One had been to more than 20 events in less than a year, and he never thought any term or condition should apply to him.

It is unreasonable to ask a company to do everything to keep clients if they are not lucrative. Everybody is in business for the profit, and if the company is not healthy financially, it cannot provide a high-quality service for the good clientele.

A. Sukhwani

I recently closed my franchised auto repair business for good (after 15 years). One of the reasons: problem customers. The demands that they come and make will make your head spin.

The most hilarious one: Customer got car fixed, then returned back after a few days demanding her money back. Reason: Her car had been total led in an accident, and she had not utilized the full value of the money spent on repairs. Can you believe the guts these people have? You refuse them; then they file complaints at the BBB, Consumer Affairs, and the corporate office. They should be booted out of the facility.

SamB

Is this really a chicken and egg problem? Or can we figure out which came first--poor customer service or disgruntled customers doing their damnedest to take advantage of a company?

From my perspective, if a company wants to fire a customer, they better have squeaky clean hands (sounds like Lands End may be an example) but since this company is an exception, not the rule, I suspect that firing customers should be illegal.

Businesses don't have a God-given right to make a profit, and most industries before their fall display the classic symptoms that these telecommunications firms show now: arrogance, greed, and shortsightedness. Look at the railroads as an example, or the Big 3 during the 1960s and 1970s.

I suspect I'm becoming a problem customer to T-Mobile--a company I swapped to five years ago after a blow up with Verizon. Verizon insisted that they had 24 hours to deliver a message--I pointed out that a message about meeting for dinner that evening did little use for me the next day--and that's not the service that was demonstrated for me in the store. Their tactics were pure cell phone company--deny the problem exists, then refuse to renegotiate, insisting on the terms of the contract. Should we have to be lawyers to do business with these companies?

Current issue with T-Mobile: going to Europe, needed a new phone (old one wouldn't work), and the phone came with a two-year contract. Get to Europe, phone doesn't work, show up at a T-Mobile store in Berlin, they try adding a chip, and then announce that the U.S. store has locked the phone. Upon returning to the U.S., get the runaround from the store manager on the phone (I'm threatened with arrest if I show up, because I told the guy I didn't like being lied to--and he tried to deny I'd asked for a new phone for Europe) and now multiple e-mails, letters, and phone calls, I still don't have a reasonable response (they've offered to refund the cost of the phone--but no word on the contract--and one-month service rebate--but since I was in Europe for two weeks with no service, that doesn't really mean a lot--and that's taken three months).

From their perspective, they're losing money--as am I. Even if I get a reasonable settlement, it's a pyrrhic victory at best. Their perspective--probably 4-6 hours of looking for supervisors, and letter and e-mail writing--figure about $25 an hour cost--wages, building, taxes, etc. So between $100 and $150 so far and mounting. My cost is probably a bit more time than on their end. Verizon probably had a similar amount in.

This isn't a problem of the person working in the trenches in the call service center (I'm generally polite unless pushed--I don't want their job), and the people I talked with at Verizon and T-Mobile were in the U.S., but it is a management problem--basically the tactic is stall till the person goes away. Rather than offer a meaningful settlement, i.e. an offer sufficient enough to make the customer feel that paying out this kind of money is going to sting the company enough to change their ways. This tactic is from the top down; several of the people I spoke with I thought honestly sympathized with me and thought the company should be responsible. Do I want a fight with T-Mobile? No. I wanted a phone that worked in Europe--which is what I paid for. I've been their customer for five years and they've had no complaints. Nor have I till this happened. But firing customers is an easy response for the corporation when someone like me has a problem and then gets their dander up. And then we'd all suffer, because service will decline further. And in contrast to computer manufacturer, cell phone companies getting several hundred dollars a year for their services seems to be pretty profitable. And I'm one of those customers who doesn't mind paying a few extra bucks for a higher quality product not made in China; I don't shop at Wal-Mart either. I didn't pick Voicestream (bought by T-Mobile) because they were cheaper--I picked them because they theoretically had good customer service. Why not swap companies? Because it seems to be endemic to this industry, and I can't wait till something better comes along.
Sam B.
Stamford, Conn.

DaneNotDave

I am a customer of Sprint. Do I want Sprint to drop customers who are a drag on their customer service? You bet! Customer service at any cost is not a service to good customers, good employees, and good stockholders.

CS

When I heard that Sprint was going to drop customers, I thought that they were targeting me. Sprint has been the worst business to have received service from for me. I was going to drop them last time when my contract expired. Sprint's customer retention specialist talked me into staying by offering me a great package. After promising me the package at a special price, Sprint sent my bill. The bill was totally off from what I was promised. It took several hours arguing on the phone to get my bill back to what was promised.

The last way they gouged me was by not allowing me to add minutes. I knew my minutes were running short, and I tried to buy more. When I called Sprint to buy more minutes, I was told that the system was down and that the Sprint operator was unable to access my account. They assured me that the minutes would be added in a couple of days. I told them that my account was going to cycle, and the operator said not to worry, that "a note was made on the account."

When I got my bill, it was 40% over.

Sprint knew I was going to go over on my minutes and in a few days my account would cycle. Sprint also told me that I waive my rights to sue in small claims. This was never explained to me when I sign the contract.

There probably are a number of customers who don't sweat the small stuff, but as for me, I have a budget. I feel that it is my responsibility to stay within my means.
CS

John

I worked in management for years in $25 million volume retail stores. We had an in-house contractor who bought all his clothes for the season for four kids and his wife. We had a satisfaction guaranteed policy. At the end of the winter, he brought the winter coats back for a return of his money or an exchange. I took the coats, all ripped and worn, and sent them to be mended and patched up. They were not new, but the coats had obviously had a hard life. They looked acceptable when mended. There was gross abuse on his part doing the same for four years running. So I provided an extra measure of service. He stopped doing it. He complained seriously. Sometimes in individual cases, individual solutions have to be found. That takes effort, and companies are not into that today.

Cristina

I run a small luxury boutique hotel. We strive to please in every way, and in seven years of operation have had 4 guests from hell. No matter what you do, they are not satisfied, and are invariably the ones who send biased and untrue reviews to Tripadvisor.com. So I fire them online, by sending a Management Answer to the review page. I think most people know that when you have four totally nasty reviews out of 45 rave reviews, the customer is not right.

Daniel C. Prudhomme

I have no problem firing customers who cannot be satisfied. As a Realtor in an adjusted market, I find home sellers think that marketing a home is a no-brainer and that a Realtor is simply a time saver for them. How incorrect. I am quite good at taking a customer under my wing, explaining the business and what to expect. But when they think they know more than I because of a real estate Web site that they like to visit and now perceive themselves to be experts, I will politely raise the awareness that I have a decade in this business and I don't need hand holding to sell their home. If this statement doesn't put the relationship into a new perspective and get them to realize that I am not clinging to every listing, then I close my folder during the presentation and excuse myself to leave. If the relationship is already underway, then I will follow up with a polite ultimatum--you need to turn over control to me or I will discontinue this relationship, and you will go elsewhere. My family and I do not need the headache of a malcontent every day until closing. Bye, bye (waving)--have a nice life.

KT

American companies have forgotten how to serve their customers. If we keep seeing our customers by their cash value, we should not be surprised our auto industry is deteriorating faster than global warming.

Sondra Smith

Call Centers were the worst things we ever came up with. To really appreciate them, everyone should work in one. You're in a cramped space, just large enough for your body, wired to a phone for hours, and if you need to go to the restroom, you have to notify someone. This is what we have evolved to? As far as the question asked, I'm in the middle. There are customers you cannot satisfy, and those customers are sometimes best to let go in a subtle manner. You need to use judgement. However, most of the younger generation does not have the personality of a "kicked bulldog," and they simply don't care; so the kind of customer service they provide is not acceptable. However, yesterday, I met a truly remarkable young person whose customer service was great, so I called for his manager and sung his praises. So, I believe in giving a great deal of credit where credit is due.

www.businessweek.com

Nuisance Customers Fire Them -- super.

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