Customers are key to a profitable business:
If you’re a new entrepreneur, it’s possible that you might be happy to land any job or project. Those first deals might feel like they are life or death — because in the beginning when you’re getting the word out that you’re open for business, it’s likely that customers aren’t instantly knocking down your door just yet. However, while there is a need to secure new jobs to sustain a healthy business, it’s always important to select your customers carefully.
In the best case, a customer is a breeze to work with. They pay on time. They refer you to others for good jobs. But in the worst-case scenario, a bad customer can take up a lot of your time and energy (or your team’s time and energy!) that you could put to profitable use on another project.
If you can identify a difficult customer at the start, you might be able to adjust quickly, or if none of your proposal measures keep them in check, reject the project altogether before it comes to any agreement. Here are three warning signs that you might be about to sign a difficult customer.
1. The customer is rude:
How did the customer treat you during your first meeting? We all have off-days, but it shouldn’t lead to the mistreatment of others. If your contact isn’t having a bad day (like someone accidentally crashed into their car on the way into work bad) it could be that it’s just that particular person who gives the final sign-off is difficult to deal with. Meanwhile, the contact person for getting the work done might be a friendly and highly competent project manager or assistant.
If the project appears to be a good match in terms of the project scope, you can point out to the customer your firm believes that a collaborative approach makes working together even more productive and enjoyable. It’s important to not let yourself be intimidated by unfriendly manners.
If you feel uncomfortable around the customer from the start, or if your polite attempts to reign in any behavior you see as disruptive fail, sometimes it makes sense to pass on the job. A lack of mutual respect and trust can negatively impact an entire project. Every situation is different, so you might have to decide if the collaboration is worth perusing if the customer is rude.
2. The customer doesn’t want to pay for anything:
While you might decide to work with someone who is rude, going into business with someone who doesn’t want to pay for your work should usually be a deal breaker.
Did your potential customer talk about money first from the moment they contacted you? Are they trying to lock you into a set rate while also trying to bargain down that same rate during your first phone call before you’ve even discussed a project scope? This is a huge red flag! Or maybe they try to offer a compensation switch where you’ll earn a profit share on your work instead of a payment?
All business owners want to make sure they’re getting value for money, but at a certain point, it can become clear that this customer isn’t actually interested paying for your services at all (but they will happily take your tips and work for free). Pushing too hard for unfair discounts can also be a sign that the customer is just looking for a bargain or that they’re not actually serious about the project. Being strung along for months by someone who is still ‘considering’ while getting all the free side tips and advice they can get — or while suggesting you give them free info to ‘prove’ you know what you’re doing — can show they aren’t serious about your project. If they get all the tips from you for free, then there is no reason for them to sign a deal and pay. The cheapest customers know this. Ask any of your friends who own a marketing related agency and they will have stories that fall into this segment where cheapskates try to push the work out for free. Your agency friends will tell you to be careful not to invest too much time or resources in persuing this job.
If they are also rude when it comes time to talk rates, this is a red flag. Proceed with caution. It can also be the case that customers in the ‘Scrooge’ category might have a poor payment history with others. At the same time, customers that are looking for the cheapest solution don’t usually convert to loyal customers but remain bargain hunters that jump from deal to deal. So, you’re not building a lasting relationship with this type of customer. Instead you’re likely investing in a future that will never materalize.
In this scenario, you need to stand confidently behind your offer and your proposal/quote/prices. Don’t be afraid to emphasise the value you add and what that translates to for the customer. And if a deal isn’t being reached, don’t be afraid to cut this customer loose so you can focus on bringing in others that will recognize and pay for your valuable work. After all, your customer expects others to value and pay a good price for their work. If they aren’t valuing yours then asking yourself if you should still be pursuing this job.
3. The customer doesn’t respect your time:
Does your customer repeatedly miss or reschedule initial meetings? Meanwhile, do they expect you to be flexible in finding a new meeting time even if you are in a different city and need to travel to their location again or make a video call across several time zones?
Perhaps this customer is being flaky because they aren’t that interested. Typically, something that is a priority isn’t forgotten or moved multiple times. Or maybe they are interested, but they’re just also rude and value their time more than yours. Of course, things can come up, but when your customer repeatedly delays, there’s usually a bigger reason behind it than the flu. Beyond being rude, maybe they are interested but they don’t have the money for what your selling at the moment or their business isn’t quite ready for what you’re offering just yet.
In this scenario, you can tell the customer that you can only work effectively and deliver results on time if they adhere to the set deadlines and schedules. Of course, be friendly but confident as you communicate this message. You respect your customer’s time and expect them to do so in return.
If you discover after you’ve signed a prospect that they have transformed into a difficult to reach customer, it could mean a few things. It could be the case that an otherwise polite customer might be overloaded with various projects or they could just be naturally disorganized.
If your customer has become difficult because they are very slow to reply to your emails and calls or they deliver the agreed material only after several reminders, then you can inform them you are putting the project on hold until they send the required deliverable. You should have included a line to provide for this scenario in your proposal and project document. At this point you invoke and reference it. And don’t forget to mention that delays could impact the price, because any delayed project should have a restart charge attached to it that you included in your agreement. If you must reschedule your work or appointments due to the customer’s negligence, let them know it will show on their next bill.
Know when to walk away:
Not all difficult customers translate to immediately bad customers. Any customer with high quality standards shouldn’t scare you off immediately. It is however important that you always ensure transparency and a clear project scope including your terms and conditions. When you take protective measures, you make sure the project gets done professionally, even with a difficult customer. Stay confident and communicate clearly how you’d like the collaboration to work.
A lucrative dream project can turn into a real nightmare if the customer becomes offensive, unreliable or doesn’t pay their bill. Trust your instincts — if they are telling you the project isn’t a good fit for you, it may be better to decline the project and focus on securing something that’s a better fit. And finally, don’t forget that one of your most important qualities as an entrepreneur is to know when to say “no thank you” to a difficult customer.
Follow me on Medium and Twitter @CambridgeTricia
Cambridge MBA | Marketing Consultant | Speaker | Author | Ghostwriter