
How to Detect a Toxic Customer (2010) - craigkerstiens
http://www.softwarebyrob.com/2010/12/09/how-to-detect-a-toxic-customer/
======
swombat
I presume this came up because it was auto-tweeted from swombat.com (this got
retweeted today: <http://swombat.com/2010/12/9/how-to-detect-a-toxic-customer>
). If so, it's worth pointing to Joel Spolsky's response to this:

<http://news.ycombinator.com/item?id=1987223>

Definitely worth a read alongside this article.

~~~
danielweber
It's not true that large companies will form the bulk of your revenue. It all
depends on what you are doing.

If you are making something that every company in the world needs one of, than
you will sell a lot more to the 501 through 5000th biggest companies in the
country than to the top 500. (You might be able to charge those big companies
a 50% or even 100% premium on various add-ons, but it won't come close to
matching the other revenue.)

~~~
jlarocco
But that's not how software works most of the time.

With most software licensing schemes large companies are, for lack of a better
phrase, gold mines.

They have more money, more users, more computers, more servers, require more
support, and require higher up time. All of which you can charge them for if
you license your software appropriately.

Not to mention it's usually easier to jump through hoops for one or two huge
customers than it is for a hundred small customers.

------
otakucode
Never say no. EVER. I mean it. Not one single time, not under any
circumstances ever. Make them say no. The way you do this is by determining
just how much you would have to be paid in order to deal with the customer. It
doesn't matter if it's a completely unreasonable number. Name it. Don't just
presume they will refuse and turn them away. Tell them that your product which
would normally cost $1k is going to cost them $50k or $100k. What have you got
to lose? Worst case scenario they will pay you a giant amount of money, and
you'll have a bit of a headache, but one that you have already determined you
are willing to take on for the price you named.

This applies to customers, potential employers, and basically everything in
life. There is ALWAYS a price. So take the gamble. Let them decide if it's
worth it from their own perspective... maybe you'll get lucky!

~~~
fusiongyro
37signals had an article a few months ago that essentially argued you should
never do that. The argument went that if your biggest customer is only worth
$200/month, it prevents you from getting confused about who you work for. If
Coke paid 37signals $2,000,000 a month for Basecamp, it would turn into
Cokecamp. When Coke takes their business elsewhere they'd be stuck with a
weird product highly customized to Coke which nobody else wants. This does
happen in practice--it's certainly one view of what happened with BitKeeper
and Linux.

I think both perspectives are worth considering.

~~~
_yosefk
BitKeeper user here; AFAIK BitMover got $0 for hosting Linux though they did
get a lot of fame. And their biggest problem apparently isn't that BitKeeper
"turned into a LinuxKeeper", but rather free BitKeeper clones like git and hg
(the first of which was originally created for Linux). So, just curious about
your interpretation of your Cokecamp analogy; to me their problems (to the
extent that they experience problems) do seem very much related to losing
their biggest, most visible user, but in a different sort of way.

~~~
rst
That's true, but it's something of a self-inflicted wound.

The release of git and hg was a direct response to McVoy yanking BitKeeper
away (withdrawing the free-beer licensing terms that had previously allowed
gratis use for free/open source projects); both were initially announced on
the Linux-kernel mailing list as responses to McVoy's move, and each had had
only a few weeks' worth of work at that point.

Before that, there had been a good deal of grumbling about the ever-shifting
terms of the "don't piss off Larry license", whose increasingly draconian
terms were designed to prevent the development of competitive software. (The
last available version purported to bind all users to a non-compete preventing
them from contributing to another SCM; I'm not sure California law would have
allowed McVoy to enforce a non-compete on his own employees!) However, so long
as these difficulties remained theoretical, there was not, in fact, much
serious work going on to develop such competition. But when Larry revoked the
license, effectively forcing the kernel developers to come up with an
alternative damn quick, they did --- and damn quick.

So, the clones aren't something that the customers did when they got
dissatisfied with BitMover; they're something that happened _after_ BitMover
chose, on their own, to end the relationship. Which makes them, as I said, a
self-inflicted wound, that BitMover could have avoided through better customer
relations management.

------
sarah2079
One thing that has really surprised me is how little you can tell about a
customer based on their initial email. When I get an angry or rude email,
about 95% of the time they will turn into a polite human being once I respond
calmly with help for their problem. A lot of people just do not expect to be
able make contact with an actual human or to get any useful help, and are
angry from the get go because of this. The article mentions "disrespectful &
abrupt" emails. For me this extends this to include "angry and hateful." It is
truly amazing the 180 people can do once they are talking to a person instead
of an anonymous customer support address.

~~~
josephlord
I think it is that they have usually reached a high level of frustration
before they email and it all comes pouring out. The lack of expectation puts
them off writing until they have reached the edge.

------
radley
We got one yesterday. Had a list of changes he expected us to make for our
app. Most were really redundant and outdated ideas. I wrote responses to each
portion of his email: yes, no, maybe...

I got to the last paragraph: if we made all of the changes he'd be happy to
bump up his rating of our app to 3 or 4 stars. At that point I deleted
everything I wrote and instead politely brushed him off and offered a refund.

~~~
sarah2079
I get this all the time. My strategy is to respond honestly about whether any
of the changes they are suggesting are coming and why I have decided not to
add them if they are not, and when it comes to the rating bribery just ignore
the fact that they mentioned it. Also popular: "I will buy your in app
purchase if you add/change X" (So tempting! A whole 99 cents you say?).

Interestingly with this treatment I have not noticed these customers being any
more trouble than usual as a group. They usually seem very happy to get an
honest response from a real person. Even though behavior like this irks me, I
think it is mainly a symptom of the fact that you often have to try so hard to
be heard by customer support these days.

------
deltaqueue
Sounds like this guy has never dealt with any Indian prospects, which
notoriously exhibit many of these characteristics. Our most recent lead, which
was a subsidiary of one of the largest companies in the world, involved
dealing with one of the most painfully disrespectful employees in procurement
that we've ever dealt with. After giving them an ultimatum that we weren't
going to sign their agreement and that they could take ours or not sign at
all, another employee at their company finally stepped in, apologized, and
signed.

Fortunately, the more qualified leads we've encountered and close in the area
tend to exhibit only a few of these traits and are generally much more
respectful, but prosecting is still quite different from the US.

------
Negitivefrags
I don't see why asking for a discount is so toxic. We ask for a discount on
every transaction with a 3rd party our business makes and more often than not
we get one.

It seems like most business to business transactions start with the "dummy
price" out the gate.

~~~
dotBen
_> We ask for a discount on every transaction with a 3rd party our business
makes_

I'm curious to learn why you do that? On _"contact a sales person"_ type sales
I can understand but you use the term 'transaction' which implies you are
doing this on self-service purchases.

Most self-service businesses are setup to streamline (ie avoid) human-
interactions which would also suggest they are _honestly_ pricing their
goods/services. By contacting them for a discount you're already increasing
their CAC before you then ask for a discount too.

If you have sticker-shock on the price because it's not offering a return
value to you or you cannot afford it then you're probably not a target
customer. That's why I don't go into the Ferrari dealership and ask for 10%
off.

~~~
aes256
> Most self-service businesses are setup to streamline (ie avoid) human-
> interactions which would also suggest they are honestly pricing their
> goods/services.

This doesn't follow. It shows they are concerned with reducing their costs,
not that they will pass those cost savings onto the customer.

Don't ask, don't get. If you are going to be a solid, profitable customer for
a business, they have a clear incentive to get you on board by sweetening the
deal.

~~~
dotBen
People build self-service businesses because they don't want to build a sales
team and/or be able to keep their price point competitive.

If everyone emailed in wanting pre-sales and discounts the price would go up
because there would need to be a sales team to service the requests.

I'm telling you that as someone who runs such a business that has both self-
service and sales-led products that are priced differently _(partly)_ for that
reason. _(that business is hosting the OP site as it happens)_

~~~
aes256
I don't think it's as big of an issue as you suggest. If you've spent umpteen
hours developing the product, the amount of additional time and effort
required to put a simple discount system in place is negligible.

You could even set up a standard response email. If someone writes asking for
a discount, just send them a ~10% discount code.

It should pay for itself in the form of (even slightly) increased conversions
in no time.

------
jasonkester
This kicked off a nice long discussion last time it showed up here:

<http://news.ycombinator.com/item?id=1987146>

Well worth a read just for Joel Spolsky's comment at the top of the thread.

------
tatsuke95
Anyone who has worked selling...anything, can understand where you're coming
from. There are some real d-bags out there, and some will end up as potential
customers.

But as a guy who has been on the _other_ end of these calls, far too often, I
can sympathize with wanting some directness. I can't tell you how many times I
write an inquiry to a company with some basic questions, and next thing you
know I'm bombarded by requests to get me on a sales call. I don't have time;
phone calls are inconvenient, emails are not. I've done my research, please
answer my questions so I can decide whether to buy your product or not.

That's my approach now. I try to be as cordial as possible, but I ask direct
questions, usually via email. If you can't answer them, I _can't_ buy what
you're selling.

~~~
BryanB55
I've experienced this both ways. Usually when I'm looking for business
products or services they are more likely to want to do an annoying "sales
call" but I've also experienced this as a business owner. We try to offer a
very simple service where customers can sign up online and find all of the
information they need on our website. However we still get customers that will
literally email us and ask us to call them (as if they can't call our toll-
free number) so that they can literally ask the most basic questions.

The worst is when they ask us to "send them a proposal" or "when you can have
a conference call with us?".

We work with clients in the real estate industry, real estate offices,
builders, etc... I think certain industries are accustomed to working certain
ways or just follow the traditional "corporate attitude" of meetings and
conference calls.

If you really want a low-touch, low pain customer base I think the industry
you choose is also very important.

------
danielweber
It looks like internal politics at the prospect were at play here. The guy
didn't want to be doing this and decided to take his bad attitude out on the
vendor he was assigned to deal with.

~~~
wtracy
Now that you say that, that brings up the possibility that the guy was
actually hoping to sabotage the purchase.

------
bryanr
The point about asking questions you can get from the website definitely rings
true. We had a customer ask us about 15 questions, the answers to which were
all on the website on our features page. He then asked for us to walk him
through the installation of our app and a demo. After 30 minutes, we had to
cut him off.

We'll definitely be on the look out for these types of customers going forward
- and the cost definitely outweighs any sales we would get from these toxic
customers.

------
andrew_wc_brown
The customer did sound like a hassle, but by the sound of the author I think
he could have admitted ways he could have improved his customer support.

\- Multiple Questions that Can Be Answered from Your Website

Improve the accessibility of the questions, educate the lead/customer on its
location.

\- Asking for a discount

Whether you like to haggle or not, there are people that think part of the
buying process requires a haggle. Have a trivial bonus you can award to your
haggler so they feel like a winner.

\- Carpet bombing info@ sales@ questions@ support@ and etc..

These emails are impersonal, people want to talk to real people. If you aren't
a big company use your name or if you want a generic account that everyone can
use just make up a name: jason@yourcompany.com

\- Calling your cellphone multiple times

If you don't want to phone support. Don't list your cellphone on your website.
If you have to list a number go buy one that goes to an answering machine.

\- Email Ping Pong

If you're lead/customer is getting frustrated with every back paddle of an
email you send back its possible you aren't communicating in a way they
understand or your not giving them an answer they'd accept. You don't have to
give them the answer they want just one they get.

------
OldSchool
Right-on! These scenarios are sadly straight out of real day-to-day life in a
successful business.

The colleague one is classic, or worse yet, you're called by the 'expert'
himself who trivializes your product yet somehow is calling to buy it.

Top of my list though is this: Customer negotiates again after delivery. "I
want a refund unless I get convoluted feature X for free, or $Y off the
price."

Don't be afraid to fire a customer just to improve your quality of life. Bonus
points for describing your direct competitor as a perfect fit.

Finally, for sanity's sake, never give out your personal cellphone number. If
you must be "reachable," use something you can block off-hours.

------
melanchton
I feel like I read about some of our customers in post and comments. 10% of
our customers generate 1-2 percents of revenue, and 70-80% of support emails
(all urgent), phone calls, complaints to quality of service, requests to
implement tons of custom features for them, e.t.c, e.t.c.

------
nickesh_23
Am I the only founder here who enjoys the challenge of a toxic customer? Make
the deal, sign a short term contract, then drop communication. A customer is
only toxic when they know they have leverage. My strategy: build up a false
sense of leverage during the deal cycle, then at the end DHV and threaten to
pull away, close the deal, and make em feel like you did them a favor. Never
say no. Never charge a higher price. Get the customer first, and then make
them want you, not hate you.

In regards to the specific example of the 80 question doc, I would've simply
replied "sorry, I'm not experienced enough to answer these, then tell him to
wait to hear from another sales manager, then circle back in 3 weeks seeing if
he got his questions answered (even though you know he hasn't). He's happier
than getting a "no", and his boss will wonder why the purchase hasn't happened
yet. Delay, delay, delay, and let the customer come back to you. That is the
filter. No use in prematurely judging a customer and potentially losing
business forever. Don't less SaaS economics ruin the salesman's tact. It's all
we got left.

\- god of parking and traffic

------
awayand
"can we hit the reset button on this please?" I like this expression

------
benihana
> _But asking us to drop our price by 25% or 30% just for kicks is not
> typically a sign of an outstanding customer._

Disagree completely. Repeatedly asking for a discount over a long period of
time for no reason, maybe. But just asking for a discount at the beginning or
out of the blue seems to be a wise tactic in financial transactions.

If I ask for a discount the worst they can do is say no, and very often they
say yes and I pay less. If I ask and they say no I and I push it and they're
firm about not giving a discount, great - I'm paying a fair price that we're
both happy about. If I ask and they lower their price, great - they lowered
their price and now I'm paying a fair price that we're both happy about. Just
seems to be part of the game you play...

~~~
halcyondaze
I work with a SaaS product, and we've noticed that almost every customer that
asks us for a discount right off the bat tends to 1. Have a low LTV and 2. Not
be a good fit for us support and headache-wise. Just our experience.

------
af3
maybe YOU need to stop bitching...

~~~
eropple
I know I shouldn't feed the trolls, but I find these one or two thoroughly
killed comments at the bottom of threads fascinating and you actually seem to
have other, mostly reasonable posts.

What is this post supposed to accomplish? What actual message are you trying
to convey? What about this article made you feel compelled to write a one-off
insult and nothing of substance?

~~~
ben0x539
Maybe he's the guy in the OP. :)

