Not All Customers Are Good for Business
The old saying, “The customer is always right,” has a fatal flaw—it assumes all customers are worth keeping. In reality, some customers are costing you more than they’re worth. Ignoring this hard truth can derail your business.
The Warning Signs of Expensive Customers
Imagine getting a red-alert email from your payment processor about a dispute filed by a customer. It feels like an earthquake beneath your feet. But often, these disputes are less about your business failing and more about certain customers looking to exploit your services.
These customers—dubbed “expensive customers”—don’t just cost money; they drain time, resources, and morale. Left unchecked, they can wreck your business.
The Three Types of Customers
- Target Customers: Your Ideal Allies
These are the customers who truly value your offering. They see your product or service as worth more than they pay, offer constructive feedback, and sometimes even advocate for your brand. Treat them like gold—they’re the cornerstone of sustainable growth. - Regular Customers: Your Bread and Butter
Regular customers are transactional. They make up the bulk of your revenue. You’ll work hard to keep them satisfied, relying on data, feedback, and intuition. While they’re essential, they can occasionally create friction. When they’re reasonable, they’re worth retaining. - Expensive Customers: Your Business’s Hidden Threat
These are the ones you need to watch out for. They demand everything but refuse to pay fairly. Their tactics range from disputing charges to exploiting loopholes. Their entitlement is not just frustrating—it’s costly.
Why Expensive Customers Hurt
Expensive customers disrupt operations, burden support teams, and undermine the morale of employees who feel unappreciated. Worse, they drain resources that could be used to serve your loyal base.
A Real-Life Example of Cutting Losses
A customer purchased a high-end kitchen appliance from an online store and left a glowing five-star review shortly after delivery. Over the next few months, they used the product extensively, as confirmed by follow-up surveys and usage data from the connected app. Yet, six months later, they filed a chargeback, claiming the product was defective, and the return process was unsatisfactory—despite never initiating a return request.
The response? The full amount was refunded, and the customer's account was flagged and deactivated to prevent future transactions. This wasn’t done out of malice, but as a strategic move to protect the business from further losses and focus on loyal, genuine customers.
How to Handle Expensive Customers
- Identify Them Early: Look for patterns: frequent complaints, excessive demands, or chargebacks. Use data to spot these customers before they escalate.
- Act Decisively and Generously: When you recognize an expensive customer, let them go. Refund them fully, close their account, and move on. This approach saves your energy for customers who genuinely appreciate your work.
- Set Boundaries: Establish clear terms and policies to minimize abuse. Transparency and firmness go a long way in deterring potential troublemakers.
The Takeaway
Your business thrives when you focus on customers who value your offering and align with your mission. Don’t let expensive customers derail your growth. Be proactive, decisive, and generous in cutting them loose—it’s an investment in your future.
Not all customers are good customers, and not all revenue is worth pursuing. Sometimes, the most profitable decision is to let go.
