None of us wants to walk away from business. But those of us who have been in this industry for a while recognize that sometimes that’s our best option. When a customer or account becomes so demanding that it cuts into your profitability, it’s probably time to issue a polite ultimatum.
At Carolina Pest Management, Monroe, N.C., our toughest accounts have been restaurants — not every restaurant but many restaurants. Why? Poor sanitation practices. Our technicians go in and provide top-notch pest management services, but if the restaurant owner and staff disregard the sanitation practices we’ve prescribed, we end up going back two months later and practically starting from scratch again. It’s demoralizing for our technicians, who succeed in getting the pest situation under control, only to have their efforts undone. Then they are often criticized as customers assert that the problem lies with the treatment. In these accounts, callbacks snowball to the point where the price we initially negotiated no longer offers us a profitable margin.
Of course, residential customers can prove to be a bad fit as well. You know who they are; their names come up over and over again as technicians share their frustrations of the day. In fact, sometimes you can tell from the initial phone call that a customer is going to be difficult. They can be demanding in a number of ways: insisting that you apply a product or handle a treatment in a way that’s inconsistent with your corporate protocol or calling you to come out every time they see one dead roach on the floor, for example. Whatever their issue might be, the callbacks, just as in the restaurant accounts, become so numerous that the customer ceases to be profitable.
During my first few years as president of Carolina Pest Management, I believed that any business was good business and so accounts like these continued to serve as profit leaks. Then I got smart. I sat down with the management team to discuss the possibilities of severing ties with the worst offenders. Since then, we have increased our profitability as well as technician morale.
The Red Flags.
It’s not difficult to identify accounts that might be worth losing. They typically exhibit one or more of these warning signs:
- The customer is inconsiderate of the technician. I was a technician. I know what it’s like to be treated with disrespect or barraged with overly demanding callbacks. When I discover this type of abuse, I have no problem picking up the phone and telling the customer we are not a good fit.
- Profitability wanes. Whether we are dealing with a difficult commercial or residential account, we review the history to see the number of calls, callbacks and challenging situations associated with the customer. We talk with the technician about the relationship to gain additional insight. Then we come back to the customer with a new price, explaining exactly why the increase is necessary. If they are willing to pay the higher price — the price that makes the account profitable for us again — then we stick with them. If they refuse to pay our rate, we go our separate ways.
- New (potential) customers place a higher priority on price than quality. Everywhere consumers go, we are being told to negotiate a better price. Challenge your phone company, look for online deals, take competitive quotes to service providers. If a customer wants to haggle over price, we let them go to the cheaper company. Very often, they come back to give us a second look because they find out that the “better deal” they got wasn’t better, or a deal, at all. They paid less, but they still have a pest problem. We’re happy to have their business — at the appropriate price point.
Carolina Pest Management was built on our commitment to providing superior service and building mutually beneficial relationships. We never want to lose a customer over service, but if we lose them over price or lack of profitability, we don’t lose any sleep over it. This philosophy has kept us going strong for 75 years and will take us generations into the future.