“Check out this case study, from a Computer Business client.”
- Dave Smith

This Computer Business knew something was wrong when his sales team was busier than ever, but his revenues were taking a nosedive.

This is a successful Computer Sales and Repair Company called IMJ Computers (changed the name to protect my former client), which has been operating for about five years. Recently, they noticed that their sales team seemed to be run off their feet on the sales floor, but that conversion rates were staying level and revenue was dropping. Returns and service claims were on the rise, eating into overall revenue targets and costing the company money.

They thought that a 15% returns or claims figure was high for IMJ Computers, even though
the company has an accommodating return policy. The figure had been at 5% or 10% for the last few months. They were puzzled by the jump in claims.

"I was struggling to figure out why this was happening, since I knew that I had hired a strong sale team and that my products were rock solid", The Owner said. "We even have an incredibly accommodating return policy and are proud of our high standards for customer service".

They decided to use the strategies in my lessons to monitor what was currently happening, and set up a system to track and manage claims.

The Owner (my client), worked through the lesson on sales scripts and chose to record himself and his sales staff in action throughout the course of the day. He also asked his staff to log all the sales they made in a day and submit their log to him at the end of the week. This showed him how his sales team was spending their time, and how many sales they were closing.

Then, we created a system for handling returns and claims, that he could refer to
and review on a regular basis to identify patterns and irregularities.

We created detailed claim forms to gather information on who was making the claim,
as well as why they were dissatisfied with the product ...

After two weeks of monitoring his staff and reviewing claim forms, the Owner realized several things were happening in his business:

Sales staff were spending at least 50% of their time working with dissatisfied customers, handling returns, and trying to make the customer happy. The same customers were
returning with claims on a repeated basis.

Many of the dissatisfied customers had spent less than $200 in store, while the average sale was $1,000. New customers were returning their purchases because they had bought products that did not match their needs.

"I finally saw the big picture and realized how much time and money the people in my
business were wasting on impossible-to-please customers. Their time on the sales floor
was being eaten up by difficult customers, and our true customers were suffering as a result".

IMJ Computers needed a new customer service strategy, and to
review customer service priorities with existing sales staff ...

The company also needed to implement a system that would retain
ideal customers, so a Customer Loyalty Program was created …

The Owner was nervous about firing customers at first, but once he
saw the increase in sales and decrease in hassle, it was a lot easier …

In the three months after implementing the new customer service standards and Premium Customer Program, IMJ Computers saw a 30% increase in revenue, and a 15% decrease in returns and claims. Their conversion rate was also boosted by 15%, which was not much of a surprise to me ...

The cost of keeping difficult customers is often too high for your business to afford, and you need to know when to let them go.

Catering to consistently difficult customers will waste your time, and ultimately cost you money and conversions. Some people will never be happy, no matter what you do! Always give every customer a high level of service but remember the 80/20 rule: 80% of your revenue comes from 20% of your customers. That 20% is comprised of easy-to-deal-with clients that are a pleasure to serve, and their patronage should be nurtured.

PS: Be careful not to sacrifice an opportunity to keep a “20% customer”
because you are busy trying to make a difficult customer happy.

Do you have a policy, or implement strategy
like this for YOUR business?