When Should I say No to a Prospective Client?
If you’ve ever had a customer, you know the old saying is not true. The customer is NOT always right. Whether you call them customers, clients or patients, it’s always a tough business decision. Do I bring them on? Do I fire them? It isn’t easy to turn away new business or to discontinue existing business, but sometimes it must be done.
Recognizing A Difficult Client Before they Become A Client
I get it, if you’ve just opened the doors to your business, you think you have to say yes to everyone, and you over look the red flags. It took us a while to see the signs ourselves, and we started in 2002. Sometimes you’re so desperate for a sale that you’ll take on anyone…and that’s when the trouble starts. All money is not created equal. Here are three client types you might want to take a pass on, or move on from:
- The Burned Bridge Rule – this prospect has NOTHING good to say about whatever firm they worked with previously. If you’re in finance, their previous advisor was not only incompetent, but caused them to miss out on Google, Facebook, and sold their Amazon stock 5 years ago. In the case of a design company (ahem), their previous provider never understood their vision, or was more nefarious, refusing to deliver design files, locking them out of their website, that type of thing. And it might be true…once. Beware of anyone that has had multiple issues with multiple providers. You might think that you can step in and save them, and really prove how talented you are. DON’T! This is a rookie mistake, this person is impossible to please.
This holds true for prospective employees as well. Do actually check references, and ask about previous employment during the interview. If they have had trouble at more than one employer…maybe it’s them.
- The Serial Discounter – depending upon your industry, this may not come up as much. But beware the client that immediately asks about discounts you offer, or pushes hard against your pricing. You set your pricing for a reason, stick with it, you’re worth it. In our experience, the people that want the lowest price also want the most of your time and are the most demanding. We once had a prospect say, “Well, if you really want my business you’ll work harder to get it, and drop this price.” My response was, “Thanks for letting me know, have an excellent day!” I said it with a great deal of charm, I promise. You can discount yourself right out of business. You can also discount yourself into a poisonous relationship. You won’t feel like you’re being properly compensated, and it’s very likely you’ll begin to resent the client over time. You’ll know this happened when the phone rings, you look at the Caller ID, and sigh…or swear.
- The Deadline Destroyer – no matter your industry, your business has a maximum capacity based upon its current production abilities. A manufacturing company can only produce a certain number of units per day, per week, per month, etc. A service company can only handle as many projects as there is staff to complete them. This is why being open and honest about lead times is important. If you have a client that won’t respect your lead times you have a couple of options. One is the Rush Fee. Eventually they’ll get tired of paying it and get on your schedule. Or they won’t, and they’ll move on. Remember this, and remind people as necessary:
- It’s important to be clear on this. You’ll have excellent clients that sometimes need things in a rush. For these clients you won’t even consider a rush fee, you’ll find a way to get the work done because they’re worth it, and will continue to be worth it. It’s the unreasonable client that consistently calls and says they need it “tomorrow!” A well run company already knows what project is getting done today, tomorrow, later this week, and has lead times in place for this reason. You can’t shift everyone’s deadline because someone always waits until the last minute.
The Deadline Destroyer is often a Serial Discounter as well.
How Do I Get Out of Working With Them?
The truth is, you might wind up working with them anyway. But if you want to avoid the project, you should always be diplomatic, there’s no reason to create an international incident.
In the case of the Bridge Burner, you can suggest that their project is outside of your firm’s skill set, and perhaps they’d be more comfortable with a firm that matches their needs better.
The cure for the Serial Discounter is simple, do not compromise your pricing. Not a single penny.
For the Deadline Destroyer? Set the tone on the first project, and if they stick with you, make sure you honor the lead time that you provide.
We’re going to revisit this topic over time, and we’re interested in your experiences. Visit our Facebook page to share!