Acceptable losses

I had a boss once who talked about some customers who had a lot of complaints as "acceptable losses."  His feeling was that if the number wasn't too high, having some irreconcilable customers (or former customers) was just the cost of doing business.

My first instinct was, and is, to resist that philosophy.  Every customer is golden.  Every customer is worth fighting for.  The customer is always right.  I questioned, in my naivete, how my boss could be so cavalier about letting a valuable customer slip through our fingers when with more effort we probably could repair and save the relationship.

What I failed to realize at first was that my boss wasn't rejecting customer services altogether.  Actually, he was a strong proponent of it and a skilled practitioner.  Rather, his stance on "acceptable losses" was my first experience of Pareto's Law being put into practice.  You know Pareto, who told us that 20% of the customers cause 80% of the problems or, similarly, that 85 % of the profits come from 15% of the purchasers  and so on.  If you aren't familiar with Pareto and his principal, you can read more here.

What my boss was really doing was trying to get a team of relatively naive sales people to focus their finite customer service resources where they would do the most good, both for the company and for the morale of that relatively naive sales force!  There are customers, he would contend, that we would never satisfy, or only satisfy with herculean effort.  Better, he would suggest, to let those customers move on and take up the time and resources of someone else, perhaps our competitors. We should spend the same effort we would have spent satisfying one customer to satisfy 5 or 10 or 50 customers.

Seems like 20% of the bosses teach 80% of the lessons worth learning.