30 May 2006

Golden Rule on Worst Customers

The Golden Rule suggests "treat others as you want to be treated." It is an important moral truth, yet it is difficult to put into practice in the real world.
It is almost impossible to observe the Golden Rule in the case of worst customers, because everything they demand is unreasonable.
What are worst customers? Gary Ahlquist, a senior vice president of Booz Allen Hamilton, defines them as "those who do three things: they order rarely, they pay slowly or not at all, and they make unreasonable demands."
Should enterprise keep worst customers? If profit maximization is the objective, then it is quite obvious that the enterprise should let worst customers go. Firing worst customers is too aggressive an action. But should the enterprise ask why there are worst customers, instead of thinking whether or not to fire them?
Are the worst customers born worst, or become worst? If they are born worst, why does the enterprise acquire them in the first place? If they are developed, what has the enterprise done to turn an originally good customer into a worst one. The reasons behind should be what the enterprise really focuses on. Letting worst customers go does not really solve the root problem, and without solving the root problem, it is almost impossible to sustain profitable growth.
As the old saying goes, "prevention is better than cure."

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