Commentary

4 negotiation strategies for managing difficult retail customers

Dean Kaplan, president of the Kaplan Group, shares insight on how to prevent the angry retail customer scenario and what to do if it can't be avoided.

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November 29, 2018

By Dean Kaplan, president, The Kaplan Group

Everyone who has worked in retail knows the saying "The customer is always right." Although, the full saying really should be, "The customer has a bizarre, unshakable belief that the customer is always right, and you need to work around that."

Difficult customers can cause stress for employees, damage to the bottom line, and thanks to social media, harm to the reputation of your business. These four strategies will help you negotiate with even the most unreasonable customer.

Use active listening

Active listening doesn't mean sitting quietly while the other person talks. Nor does it mean saying, "I understand," every few minutes. Active listening is a process that involves letting the other person know that you have heard and understand the concern, and that you are offering a logical solution based on that concern.

For example, let's say you have a customer who is unhappy with a recent purchase. Active listening would allow you to paraphrase her complaint, "It sounds as if you like the shirt, but you are upset that we put it on sale one month after you bought it. I understand your frustration." Then offer a solution, "Would you like to be put on our mailing list so that you're informed of upcoming sales?" or "Can I offer you the difference in store credit?" Without active listening you would be tempted to simply point to the return policy and the customer would not feel heard or valued.

Train your staff

The best way to handle a difficult negotiation is to finish it quickly. The faster a customer gets their problem solved, the happier they will be. Set clear guidelines for your staff on what problems you'd prefer them to handle, and how you want them to do so. For example, consider allowing refunds under a certain amount to be approved by employees, even if the item has been used. Or, authorize store credit as a go-to solution for unhappy customers. Encourage your staff to tell you what kinds of solutions they'd like to be able to offer. As the people on the front line, your employees have a different view of what people want. You may also want to consider hiring an outside company to offer negotiation training for managers, manager trainees and other key staff members. Empowering staff and providing professional development will not only help you handle difficult customers, it will also help decrease employee turnover.

Practice empathy

Whether you are negotiating a new lease or negotiating with a customer who wants a refund, understanding the needs and feelings of the other party is important. In the case of a business deal, this often takes research. With customers however, it often takes a little psychology. It's important to understand what motivates customers to complain. Some customers are difficult because they know that part of what they're paying for is service and they want to get their money's worth. Other customers are difficult because they want to be heard. Some customers are simply bored, while other customers truly feel wronged. Knowing who you're dealing with and what their motivators are can help you solve a problem quickly. We tend to think of negotiations as straightforward win/lose propositions — one person wins, the other loses. But it doesn't always have to be that way. If you think of negotiation as a way to find out what the other person needs, as opposed to getting what you want, you'll go a long way toward making even the most difficult customer happy.

Stay calm

Yelling never helps. Whether your company is at fault or you're trying to negotiate someone else's mistake, the best way to handle a difficult situation is to stay calm. Emotions are easily read in tone of voice and physical mannerisms. If you feel anxious or angry about the situation the other person will know. Difficult customers may try to bully or strong arm you. This sometimes works for them because they have a one-time problem to fix. But you can't practice the same tactics because attempting to bully or strong arm someone won't solve a difficult situation over the long run.

Before negotiating with any customer, it's important that you have a strong understanding of your business needs. Store credit is a great solution to many problems because it keeps customers loyal and most people with store credit will spend more than the amount of the credit. Remember that the reputation of your business is its most important asset. Although it may be satisfying to turn down a request for a refund, the truth is that it may cost you less in the long run to simply give in to the request.