Although we should never think of our customers as commodities, it just a fact of business that some customers will go out of their way to make life difficult for you. You need to figure out what to do with them quickly, because clients like these can eat up time, resource and profit at an alarming rate.
So, with that in mind, I thought I'd write a post about good clients, bad clients, how you can spot the difference and how you can deal with the troublemakers.
What Makes A Good Client?
"We all know a good client when we see one. They help our business grow beautifully and they are a pleasure to deal with."
Here are some of the things that make them great:
They Pay On Time
This is an obvious one, although it's definitely part of the make-up of a great client, so it's worth mentioning. A client who pays their bills on time helps you to succeed in your business life - what more could you ask for?
They Let You Get On With It
I think that another sign of a good customer is that they let you get on with the job at hand without being too controlling. Clearly, every client will differ in how much of a hands on approach the take (and sometimes very hands on can be good), although it's good to have the breathing space to get on with your work until the next planned update arrives.
They're With You For The Long Haul
Another thing that I think makes a great customer is the fact that they are with you long term - they don't just come to you for a one off order. That's not to say that one-off orders aren't good because the are. It's just that customers who are with you for a 12 month contract or so are better because they offer more stability within your business. It's much better to know you have a handful of long term, reliable clients than it is to constantly have to find 'one-offs'.
They Understand Your Business - They 'Get' It
Something else that makes a good customer is the fact that they seem to understand you, your business and how your business operates. They love the feel of your business, the systems you use and how you operate. With these kinds of client, everything seems to run absolutely perfectly - it's a pleasure working for them and they clearly enjoy giving their custom to your business. A win-win situation.
Now, let's move on and have a look at some warning signs that may suggest your client is more trouble than they are worth.
What Makes A Bad Client? How Do You Spot Them?
Spotting a bad client can be a bit more difficult. This might have something to do with the fact that we tend to think of any client as being a good one because we need client to keep the cogs turning. However, this isn't the case.
"Here are some things that should help you identify a toxic client that should be shown the door."
They Don't Pay On Time And/Or Question Every Invoice
This is obviously a big one. If a client repeatedly pays their invoices late, then this is a good sign that they might not be the kind of customer you want on your books. If you let this kind of behaviour go unchecked - especially with multiple clients - you could easily be putting your entire business as risk.
Clearly, every client is different and there can be good reasons for the (very) occasional late payment, although if it becomes a habit it's time to re-assess. Also, the kind of client that questions every invoice in an attempt to get a discount each time is probably not worth having around, especially if you are sure that you have delivered exactly what you said you were going to.
They Continually Alter Plans, But Not Budget
This kind of client can be a nightmare. The kind of client that asks for a proposal or quote, agrees for work to start and then changes the goalposts constantly. They always want more but are unwilling to increase the budget as it had already been fixed. Again, this is definitely a warning sign that the client has the potential to be a problem - by acting in this way, they simply don't respect you or your business.
They Are Verbally Abusive
This is a really obvious one too. If your client swears at you, or unfairly puts you or your business down in any way, then it's simply time to get rid of them. As a small business owner, you definitely don't need to add new stress in the form of rude clients - just show them the figurative door.
They Play You Off Against A Competitor
This is a very annoying situation to deal with. Your problem client has asked you to do a job, which you duly complete for them before invoicing. However, your client takes your work to a competitor for review, who of course finds holes in it. Your client then uses this as a bargaining chip for a discount or free work.
Yep, this happened to me - only once in my career, but it was grating enough to remain forever in my memory! The project was completed exactly as promised - this was just a cheap shot to try and save some money.
Needless to say the client was canned - if this ever happens to you, you should do the same.
You Spend Way Too Much Time 'Hand-holding' Them
You probably know this client - they question everything you do, they need everything explained to them three times and they call you during evenings and weekends too 'to check how things are going'. These are not really bad people, but can you afford the extra time in dealing with them? Imagine if all of your clients were like this - you'd be working for way less than minimum wage and you'd never get any sleep!
Although this might be a difficult one to call and you might feel guilty about it, I'd say this kind of client is not worth having around - not because they are nasty, but because they are simply too draining for a small business to handle.
What Should You Do When You've Identified A Bad Client?
This is a tough one, although if you're sure that you have a problem client on board, you really just have to put your business head on and get tough. Just think that every week you continue to do business with them is a week that you are holding yourself back.
However, you want to be as diplomatic as possible with them. Here are a few ideas as to how you can handle the 'termination':
- Do it in person when at all possible - emails can be taken the wrong way and can come across as very impersonal. If you can't meet, a phone call is next best
- Prepare for you call - write notes to make sure you stay on track
- Try not to come across as aggressive - adopt the mindset that you are trying to help you, your business and your customer find a happier place
- If your customer is under contract, decide whether you can wait it out, then tell them you are flat out and won't be able to renew. However, you will help them find a new supplier
- If you really can't wait it out, explain that you don't think the partnership is working and ask them how they would feel about moving to another trusted partner if you took care of a seamless, same cost switch?
- If your customer is on a rolling contract, even better - you can tell them you don't have the capacity at the moment for another project
- The key is to make sure that you don't come across as if you are attacking your client, or that you don't value or respect them
So, if you are wondering how to spot a bad client, I hope this post has helped you a bit and also that it has given you some food for thought as to what you can do about it.
Just remember that you are under no obligation to keep serving a bad client - it's much better for you and your business if you just let them go. They'll be a distant memory in no time.
Thanks for reading,
By Alan MacDougall
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The Revenue Builder Blog is a small business marketing strategy and tips blog designed to help small business owners and startups maximise sales revenue.