How to identify toxic customers

Cristian
August 28 5 min read
how to identify toxic customers1

The last projects that I have been on got me thinking. Generally, in outsourcing, we don’t have a boss, we have many bosses. Our customers are in charge, and sometimes, their demands become unreasonable. If that happens, you’ve probably got a toxic customer on your hands. Based on my experience and on what I have been reading in the last couple of months, here are some warning signs that can be taken into consideration.

They take advantage of you

Toxic customers often start out quite normally and seem perfectly nice guys. Because they are nice and friendly, at least in the beginning of the “relationship”, you may start doing some extra meetings, work some extra hours, as favors. While normal customers would be grateful for this, the toxic ones start to take advantage of your generosity and, in a flash, he begins to not just expect, but demand, ongoing favors and freebies.

They can’t make up their minds

Indecisiveness is a trademark for toxic customers. Whether it’s a client who asks you to revise a proposal 5 times, or a customer at a beauty salon who’s not sure what she wants her hair to look like, but is sure she doesn’t like how you cut it (and re-cut it, and re-re-cut it, and re-re-re-cut it), this kind of toxic customers are always out there.

They’re never satisfied

What happens where they constantly change their minds? Well…toxic customers are never satisfied! That means work is redone over and over (to slightly new specifications each time), all for the original estimated amount of time. The product is returned, code being exchanged dozens of times, leaving you with degraded planning on your hands.

They suck up a disproportionate amount of time

Things start to tie up one to another, no? After the last two reasons, toxic customers will typically end-up on emergencies and rush requests (Don’t get me wrong, these are fine at first, until you slowly realize everything becomes “urgent”) Redoing work, changing it at the last minute, or rushing to meet crazy deadlines takes up extra time, making you and your team less able to serve the quality that you all agreed on.

They tend to be abusive to you or your team

When toxic customers don’t get things done their way, they can become angry and demanding. Another tactic they tend to use is to constantly threaten you that they’ll take their business elsewhere. Every customer knows that they can turn somewhere else if a business relationship doesn’t meet their expectations, but a toxic one is going to remind you this on a regular basis.

Researchers from Harvard raised eyebrows of chief HR officers and CEOs by stating these two sensible observations:

Customers need to be leaders, not dictators…

Customer managers, that in fact are dictators, foster a toxic culture of distrust that makes it unsafe to disclose information or work in close collaboration. For your employees the job will be a day by day survival under a dictatorship, due to the unpredictability of the environment you're team is currently in.

The human touch is lost

People are often considered to be objects rather than assets, and there is very little concern for their personal development, happiness or well-being. Their personal time gets sacrificed for the job, 50-hour-plus workweeks, as little as possible vacation time and, of course, even 24/7 availability for communication. Another pressure for your employees will be caused by the fact that they have to compete against one another internally, this being enforced by individual performance measurements rather than team performance.

How does these kind of things translate into your business over time? They’ll hit into two of the most important things, employees & money.

They will make your employees crazy

They will make your employees crazy because toxic customers are very hard to work with. Their unreasonable requests can transform even your calmest employee to go over the edge. If you’re a business owner, then it’s clearly the time to step in and rectify this situation. If not you could end up having your best team members to quit.

They will cost you money

Toxic customers usually will not pay their bills in a reasonable amount of time. They will frequently ask for extensions off due dates, discounts you initially didn’t agree to, or they might end up even ignoring your invoices. Many business owners are terrified to say farewell to any customer, even if he's a toxic one. But if you start doing the math, you’ll likely discover that the return you get on that toxic customer is not even close to the effort you, and your team puts in. If you start taking into consideration the cost of your and your employees’ mental health, the ROI is even less.

Analyze your customers, talk with your teams and if you identify this kind of behaviour keep a closer look on those projects. Mare sure you take the proper decisions and help the teams handle this kind of people.