You’re Fired!

How to Deal With Problem Clients

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They can come with a wide variety of neuroses. Some like to call 50 times per week; others will take weeks to decide on a font style for their website banner. Whatever their quirks might be, problem clients can cause stress, rampant inefficiency and, worst of all, a possible decrease in your profits.

The first step in dealing with problem clients? Try to avoid doing business with them in the first place.

Willy Bolander, assistant professor of marketing in the Sales Institute at Florida State University, explains that many companies — nascent enterprises in particular — believe that any client is a good client. Guided by this mistaken notion, these businesses take on many clients, ignoring the fact that some of them might cost the company more than they actually return. Targeted marketing is important, Bolander notes, but he additionally suggests considering the other side of that coin:

“We say ‘target market’ — who are you going to sell your service to? The other way you could look at that is, ‘Who are you trying to not sell to?’ ”

Clients must be evaluated before you hire them, he continues. There are key traits to look for, and others to avoid. A good client is reliable when presenting needs and
demands, and readily follows through with information and necessary input. A client who has gone through many vendors in a short period of time, or who seems reluctant or slow in responding to requests, might cause problems later on.

Bolander urges companies not to overlook follow-through, as this can lead to some of the worst ordeals. He recalls problematic clients he dealt with as a client development manager at a start-up CPA firm in Atlanta:

“Some of our problem clients were people who we would call every week for a month or two, asking them to send us their receipts and their banking records so we could get started processing their books for that month or that quarter, and we could never get a hold of them; they would never follow through. We’d get a call from them out of the blue when they’re trying to get a loan and the banker says, ‘Let me see your books; let me see where everything’s at,’ and now, all of a sudden, everything is very, very urgent.”

Some prospective clients might also raise a red flag during the first stages of collaboration by exaggerating their credentials, connections and prestige. Mike Ragsdale is the co-founder of TownWizard, a company that helps entrepreneurs establish interactive, mobile guides for their local communities. With a network spanning about 150 communities world-wide, Ragsdale has met his share of problem clients, but one in particular stood out.

“I remember the first time I ever spoke with him, something about him didn’t seem right. He was talking a very big game; he supposedly had all sorts of Hollywood connections, and he’d done this, and he’d done that and he was a big heavy-hitter, high roller. I wasn’t immediately enamored. If anything, I was a little more suspicious.”

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