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Client ROI -- Why Is It The 'Thinnest' Deals Are the Most Demanding Customers?

Mandoline I noticed early in my career that the clients who paid the least for whatever was being sold were all-too-often the clients that became the most demanding, the most particular, and the greatest time-wasters in my Rolodex. Why is it there seems to be this inverse relationship between time spent with a client and overall margin of a transaction? The customers that bring the 'thinnest' deals are also the most difficult to make happy!

Case in point: as a favor to a vacationing associate here I started assisting a client with an unusual job-- a small production. The job is nothing fancy-- a specialty product the client hopes will catch on as a new type of business card-- but it's just atypical enough that it required a little 'hand-holding' to make sure it was produced correctly. All told, the client's initial production was about a $125 order-- frankly something that warrants 5 minutes attention. All told now I think we're approaching a combined 2 and a half hours of telephone discussions, 43 emails back and forth (as of this morning's 4am voice mail and email), and the involvement of two other people here to make sure the client's needs are met adequately. And, lest you think I'm being unfair because this is a small job, the client repeatedly asked for discount upon discount because this was such a great opportunity that would most certainly lead to enormous orders in the future after the idea caught on with the general public. I hope it does.

In the meantime, I'm plotting ways of getting even with my vacationing associate...! If you have any ideas on how, send 'em along!

Chris Hendricks

Posted by Chris Hendricks on 09/29/2007 12:23 AM

Comments (27)

margin, demands, chris hendricks, discount

27 Comments on Client ROI -- Why Is It The 'Thinnest' Deals Are the Most Demanding Customers?

SEP

2007

So true, so true. I don't know why but it's a guarantee that the cheapest houses cause the most headaches (well, I do know why, that's rhetorical). =)

At times it's a close race between commissions earned on a deal and money spent on aspirin....

Like they say if you pay peanuts you attract monkeys! People who don't see value lose more than they gain. Same way with Luxury Real Estate vs. first time buyers for sure! We do have to treat everyone the same, because as they say...what goes around comes around!

Chris: Right you are... and thus the 2 and a half hours of 'talk time' and 43 emails....

Replace the candy dish with veggies!

SEP

2007

It might have been better to run after the first request for a discount

The needy client is the one who requires the most hand-holding during the process. You're going to get calls at night and on weekends. It helps to remind them that your time is worth something, just as theirs is.

Chris.........I think the reason that the hardest transactions are the lowest paying is karma.......for giving us really great pay for easy transactions.

Duane Hosek in the Black Hills of South Dakota

You have the freedom of choice. I tend to qualify and see how I feel about what they want me to do.

Chris, I think the customers who are most demanding, especially in real estate, are sometimes the ones who have less money to spend overall AND have a lot to lose if the transaction goes south. Even with a print job, the person may have limited funds to spend and $125 probably feels like a lot of money, especially if the job goes wrong. Just my opinion...

Long ago I learned that he who pays the most has the greatest appreciation. I don't know why this is but I have over the years seen this proved over and over. The cheapest skinflint in the world expects the most, why I wish I knew? I work hard to please each of my clients regardless of the final pay but like you I have noticed that I spend an inordinate amount of time pleasing those who reward me the least. Do I appreciate them less?? No in truth I hope that by my stepping beyond the limits of reason for them that some day in the future I will incur the just Karma of a bountiful reward for my efforts.

I think it all boils down to the person. Generally people that go with the flow and put trust into their salesperson ar easier to work with and most of the people that constantly question are more along the lines of the cynical with trust issues. The comes a time when you need to look at the maintainence to profit ratio and go for more people involving less pampering and more money.

Sometimes those needy clients bring return business through referrals or themselves down the line. It then somewhat evens out, or at least it has for me.

Great post. I say make the consumer pay whatever you believe you or your product is worth. That way, they will value what they receive and you are not upset about what you are earning.

You speak the truth. I am convinced that the deals with the thinnest margins are the most demanding because you are dealing with someone who has a grossly overvalued sense of worth. The client who demands a discount for my services will be the guy that calls me at all hours, wants me to drop everything at a moment's notice, etc. Why? Because he is so convinced of the value of his business to me that I will accept any fee and jump through every hoop to keep him satisfied. Wrong.

Reminds me of an old saying that goes... "The thicker the file, the thinner the deal." :-)

You are right --- its interesting how things seems to work out this way.

Thanks all, for the comments.

Darleen: In particular, yours caught my eye because I always trained my sales teams to understand and be sensitive to the fact that the 'Mom and Pop' deal was harder and thinner-- simply because it was 'their money!' All too often we forget that it's easier to spend the company's money than our own-- so when it's Mr. and Mrs. directly deciding to spend with us versus buy dinner (or shoes for the kids, or whatever) they tend to be a little more demanding.

"...and the greatest time-wasters in my Rolodex."

Chris, It sounds like this customer is still in your Rolodex (or database). WHY? Does this mean that you are continuing to send him marketing materials, etc? So that your next job for him can be a time-waster too? Or are you expecting to reform him? Fire him as a client, and do not keep in touch with him. Hopefully, he will tell all of his like minded cheap time-wasting friends how bad your service was, that he never heard from you again, etc, and then you will not need to waste your time on them either. OK, maybe that's harsh, but sometimes it seems that we are not proactive enough in avoiding problem clients.

Truth be told, Rolando, it's because I made a commitment to my associate to handle this in her absence... and she's not back yet!

Chris, yes, you've hit the nail on the head, as you say. When I have customers who appear to be asking for the pie in the sky, I step back and ask "why?" What is really going on here? And usually, the demanding attitude is based out of either fear and the fact they have a lot to lose if things don't go as planned. I can tell that you and your team go the extra mile for clients based on how well you've trained them to respond to customers.

SEP

2007

I tend to agree with the comments that speak to how much money it is in the clients eyes. Selling a 80K house is a real hassle. It involves quite a bit of negotiation because we have to get the payment right for the client and negotiate numerous repairs. In sharp deviation is the selling of a 200K house. Very few repairs and generally people that are easy to qualify. The 80K house almost always, in the long run, makes me more money, however. They send their friends and family. They may not articulate the appreciation as much, but they are there when referrals are in mind.

As hard as it is sometimes, we adopt the mantra that "every customer was small at some time"in their history.

Chris: The referral component and their likelihood of being able to "deliver" the referral in a way that almost assures you the next deal is a point often lost with these folks. Thanks for sharing!

That is funny, I experience the same thing and I am sure most of us do.

Related to this, I was on a road trip lately with a friend and we took turns driving and sleeping. This friend listened to some very highly rated executive level management training CDs while I was supposed to sleep. The main theme I got out of it was Manager, spend 90% of your time with your top producers, and 5% to 10% with the losers that you should fire. This will make you much more successful they said. I Think it applies here as well.

James: That was good advice. Think of it this way... if you 'invest' time in employees and get a 10% productivity enhancement from doing so, wouldn't you be better off raising the productivity of a $500K producer by 10% instead of 10% more from a $50K person?

We have to take the good with the bad. It stinks - nobody likes do deal with problematic clients but they are customers.

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