Should you fire, rate or educate your customers?
At the end of 2014, Fred Reichheld, Bain Fellow, Author and Creator of the Net Promoter System, suggested that one of the big ideas of 2015 would be for companies to start rating their customers and to, ultimately, fire bad ones as companies focus more and more on doing business with customers that they want to do business with.
Firing bad customers is an idea that receives broad support from many businesses. But, implementing it can sometimes be harder than it sounds as firms tend to be sensitive about revenue losses and the potential risk to their reputation that comes from firing customers.
But, it does happen and once done firms tend to keep ‘blacklists’ of customers that they don’t want to do business with.
However, firing customers is not always straightforward for some firms and some have recently taken up Mr. Reichheld’s second suggestion and that is to start ‘rating’ their customers. Companies at the forefront of this include Uber, Lyft and airbnb, whose business models are to connect customers with ‘service providers’ in their respective areas of interest. Reports suggest that these companies are now starting to rate their customers as a way of protecting their ‘service providers’.
This is causing a degree of unease amongst some customers and reporters due to the lack of transparency of these ratings and the fact that they are not keen on being reviewed regarding their individual behaviour.
Their reaction is interesting and smacks somewhat of double standards, given that we are continually encouraged to rate our experiences with companies that we do business with and to use those ratings and reviews to help us decided who to buy from.
Funnily enough, their reactions also sound very similar to some company reactions that were heard when internet based customer reviews and ratings first entered onto the scene.
But, the fact that companies are starting to rate their customers points to a bigger issue and that is the behaviour of some customers.
In Singapore, Prime Minister Lee Hsien Loong at the Singapore Service Excellence Medallion Award ceremony in May echoed this when he suggested that it was not only incumbent on businesses to provide good service, but that customers should also value and treat service staff with courtesy and respect.
I think he makes a very good point.
But, that does mean that companies must trust their customers to act in the right way.
That might be fine for some but not for others. One company, in France, decided that it didn’t want to leave customer behaviour to chance and through it’s price list is both educating it’s customers on what is expected of them and will penalise them for their ‘bad’ behaviour.
The firm in question is the Petite Syrah Café in Nice, France, where back in early 2014 it introduced a different set of prices for it’s customers dependent on how polite they were to staff. For example, if you say ‘Hello, a coffee, please’ then you would be charged the normal price of EUR 1.40 ($1.58 or £1.02). However, if you are shorter, more direct and less polite and said only ‘a coffee’ then the price could rise to EUR 7.00 ($7.89 or £5.07).
According to the press coverage of this particular tactic, it was done more ‘tongue in cheek’ than anything else and hadn’t really been enforced. But, it was also making a serious point and was aiming to educate some of their customers about what behaviour was expected of them.
So, should businesses fire, rate, educate and maybe even penalise customers for bad behaviour? That has to be up to them. But, what is clear, I believe, is that customers, companies and employees should all be treated with respect and, therefore, the incidence of some customers having their behaviour rated is likely to increase until that happens.
