Business Finance

Bad Clients? Here’s a quick guide to ‘unpause’ your transaction

Bad clients are a nightmare in any business. Some of us bear with them even when we don’t feel like it – because in the end, if they’re paying the bills, what else matters? 

But it’s not what you think it is. Bad clients can end up costing you money or hinder your cash flow if they always pay late or argue over fees. If they regularly demand changes or ask questions, they eat away the time you need to devote to your other clients or your business.

They can crush your rep. Bad clients disregard your advice and then complain when they don’t get the expected results. If that client in the picture has a big audience, their complaints can reach others in your industry and make them reconsider partnerships with you.

Karen Higginbottom from Forbes says that employees with high-stress levels: engage less, are less productive, and take more sick leave than workers who are content. Getting rid of the source of this stress will improve morale and productivity, which positively impacts your business. 

Bad clients hurt your employees, your culture, and your business. It’s time to let them go.

Bad clients don’t listen to you or see what you are offering. They consume more than their part of resources when it comes to time and money. This affects customer health, customer satisfaction, etc.

While the good clients reward you through revenue, referrals, and loyalty, the bad clients limit your ability to assist profitable customers. Hence, it becomes crucial to identify and deal with bad clients. We’ve highlighted the most common types of bad clients. Here’s how you can spot them and know what to do next.

10 Ways to Recognize Bad Clients

Most bad clients:

  1. Don’t Ever Pay On-Time 
  2. Don’t Pay Enough Or At All
  3. Come Up With Unclear or Growing Demands
  4. Want ALL your Attention
  5. Aren’t Available
  6. They Aren’t Honest
  7. Are Abusive or Threaten Your Staff
  8. Make Unreasonable Demands
  9. Complain to Anyone Who Will Listen
  10. Don’t Listen to You

They Don’t Ever Pay On-Time

Customers that don’t pay don’t make you or your business any money. They cost you money. Overdue bills diminish your cash flow. Investopedia asserts that a business may see a profit every month, but its money might be tied up in different accounts, and there is not a penny to pay the employees. 

The resources you spend trying to collect your payment also costs you money and your staff their time. Using technology to collect dues, too, requires you to pay collections companies or lawyers.

They Don’t Pay Enough Or At All.

Some customers put you on the defensive right from the start, questioning your pricing during sales. 

For example, they may ask why they’re paying you so much to do a few hours of work for a piece of work. They don’t understand your investment in acquiring the experience to deliver efficiently according to their needs.

Beare of customers who complain about the pricing, don’t seem to understand your answers or justification, and then end up signing their contract. These customers often demand a lot after they hire you. They’ll ask for constant modifications and will undermine your work. 

Come up with Unclear or Changing Demands

Bad clients usually have unclear or changing demands.

Say you and your team spent weeks preparing a proposal. The worst thing that can happen on your delivering the project is being told your work doesn’t meet the objectives- the objectives they didn’t tell you at the start.

At times, poor communication leads to expectations not being met.

But if you give the client exactly what they ask for and are still dissatisfied, there ought to be a problem. Here, you point out their behavior; it seems like you’re making excuses. We suggest you identify these clients early on by their inconsistent expectations.

Bad clients have demands that are hazy and jumbled.

They Want ALL The Attention

Each consumer is different, and it’s only reasonable to expect that newer customers need more hand-holding than the preexisting ones. 

So, how to identify the attention seekers?

Analyze the data. Find out the more prominent clients, the ones generating the most revenue. Be wary of anyone taking more than their fair share.

Talk to your employees – they should tell you when clients are being unreasonable or asking too much. Document their concerns and act when appropriate.

They Aren’t Available.

While some bad clients consume many resources, some cause perplexities because they don’t communicate enough.

Consider a client who doesn’t return your calls or emails. You waste time trying to track them down. Similar to the clients who schedule meetings and ghost you. That’s the time of your day you could have spent productively.

Moreover, a customer who doesn’t show up for the meetings won’t know how to use your product.

This leads to higher demands on your customer support team, poor customer success metrics, and so on. It’s okay to miss a meeting from time to time. But identify the customers who have a pattern of absence and raise the red flag.

Bad Customers Aren’t Honest.

The customer is always correct—FALSE. Bad clients may lie to you on purpose. 

Some of the most common lies include:

  • Alleging you promised to deliver things that you never promised in reality
  • Saying that another employee made promises
  • Claims of lousy customer service/experience
  • Under-representing their ability to pay or their needs during the sales process

In each of the abovementioned situations, their lies can foster unrest among your team. If you trust what they say, you can’t act on it. 

If you catch a customer lying once, give them the benefit of the doubt. However, if it becomes a pattern, start documenting the behavior. 

They are Abusive or Threaten Your Staff

Sometimes rudeness or bad behavior results from a bad day or week. But, what you’re on the lookout for is a pattern of behavior.

Watch out for :

  • Personal attacks
  • Aggressive accusations of lousy customer service
  • Threats of personal harm or property damage
  • Shaming in public

Customer threats are better dealt with soon. Rude or abusive clients put you and your staff through uncalled-for stress. If a call reaches the level of abuse, it is best to record calls for further review or law enforcement purposes. 

Negative employee experiences do affect your employer brand, especially in this technological era. Bad reviews on LinkedIn or other sites can make it challenging for you to hire good people.

Any good company strives to provide good customer support. 

A lousy customer will take advantage of your kindness and ethical business practices. And even accuse you of poor customer service.

They Make Unreasonable Demands

Most customers want their needs met. But some customers ask for more than you can deliver. Not all these are bad clients. A customer, though, does cross the line when they don’t take no for an answer.

Beware of customers requesting many revisions over the deliverables. Expecting you or your team to be available at any moment, any time of the day, is also a problem. It’s not feasible for any business to constantly attend to every client according to its convenience. Unreasonable demands pull your resources away from loyal customers you can help. 

They Complain to Anyone Who Will Listen

Complaints are part and parcel of a business. With the advent of social media, it’s easier than ever for upset customers to stain your reputation. A simple tweet can cost you a lot.

You can’t ignore online reviews because your audience or potential clients wouldn’t. If the reviews are not very pretty or unfair, their impact goes way beyond one bad client.

They Don’t Listen to You.

Customers who don’t take your advice also come into the category of bad clients. They’re not just wasting your time and their money but also won’t see returns on your services.

Your job, more often than not, includes advising your clients regarding their goals. If the clients don’t pay heed to your recommendations, they invite the risks of failure.

It goes without saying that clients who don’t reach their goals are unhappy, blame you, or, even worse, give you a bad review. They might not even use your services next time. Moreover, you can’t have great stats to flaunt when customers aren’t successful.

What to do with bad clients?

Appraise Their Value

Customer acquisition costs are higher than customer retention costs. Ask the critical question, “What is the value of keeping this customer?”

Keep in mind:

  • Their cost versus their profit. The data says it all. If they cost you more than you’re paying, that’s a definite red flag.
  • If the bad client is a high-profile one, then they may be worth the headache. Brace yourself to deal with negative fame or social media outcomes.
  • The consequences of losing this client? 

Have a Real Conversation

They say communication is key

  • Be direct and frank about your concerns.
  • Fulfill their expectations. Please explain what you can and can’t do for them. If you opt to continue keeping them as a client, make sure they know what to expect.
  • Get on the same page. Understand their needs and ensure that they align with yours.

Refer Them

Sometimes, a bad client is terrible but only for your business. You can always help them find a better fit. If you successfully suggest a great fit, you can make friends in business and have a delighted customer.

Don’t forget that odds are the company you refer to might not admire their business. Don’t refer bad clients to companies you value if you’re considering asking the other company if they require the referral.

Fire Them

Sometimes as hard as it sounds, it’s best to walk away.

Here’s how to move on with the least of fuss:

  • A manager or higher-level employee can deliver the news. If the client has a problem with an employee, keep that person away.
  • Be honest. With a clear and straightforward explanation, you will reduce or completely a misunderstanding.
  • Before the final call, make your decision. Nothing should sway your decision.
  • Be kind. Display compassion and extend a smooth transition plan.

Don’t Earn Bad Clients!

Bad client-company relationships sprout from ineffective communication and unclear expectations. 

Here are means to attract clients who respect your company:

  • Generate a detailed customer persona to help you identify your most significant customers.
  • Confirm the marketing claims on your website, blog, social media, etc. for accuracy
  • During sales, confirm the market demand for your product. 
  • Ensure all expectations and agreements are transparent.
  • Don’t sign on new customers that you can’t serve. 
  • Price your services appropriately. 

Conclusion

Bad clients may be a fact of life, but there’s always plenty you can do to keep one bad experience from destroying everything. By identifying them, an effective solution is far more likely.

In several cases, it’s not the customer’s fault, but the company shares responsibility in their experience. Notice bad clients before they tarnish your reputation. At the same time, nurture and appreciate your existing clients, so they share their experiences, and you always have people with you, alongside you.

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