5 Warning Signs a Client Will Be Bad for Business
The best time-management and money saving advice may be to cut out a few clients who are actually killing your business.
Opinions expressed by Entrepreneur contributors are their own.
When you have a business, satisfied clients are essential to your continuous success. Knowing your ideal client and their particular needs is critical to your success. However, pursuing non-ideal ones can kill your business. It pays to be picky about which clients you choose to work with.
I'd like to share five reasons to turn down prospects.
1. You can't provide the service they need.
A challenge is great as long as it taps into your expertise, such as expanding your work to a new audience. However, once you add on related services you're not qualified to provide you can get into trouble. For example, being a business coach doesn't necessarily mean you're a social media expert.
Related: How to Figure Out Exactly What Your Customers Want
The fact that you've sued someone and won doesn't make you a legal expert. The medical field is a great example of this theory in action. You have a general doctor and if she diagnoses a specific condition she may refer you to a specialist rather than treat you herself. She probably has some knowledge that would be helpful but she understands that a specialist has a higher degree of expertise that would better suit some of her patients.
Provide the service you know best.
If you offer to provide a service you aren't good at you risk making your clients unhappy. Dissatisfied clients are bad for your business. Instead of referrals you'll get poor reviews and refund requests.
Related: It's All About the Customer Service
The better strategy is to be up front if you're not the right fit. If you have a good referral network then facilitate introductions to a more qualified service provider. This behavior makes you more trustworthy. Since we tend to hire people we know like and trust, your honesty could place you at the top of the list the next time. This same prospect has a project they know you can help with.
2. You have to change your business to get theirs.
In my experience, when you start a business you're more cash hungry and less aware of the value you offer. This means you'll take some jobs for the money and consider making changes to your service to get it.
As you gain experience you learn what you're best at and your best delivery practices. You become clear about the results your service provides. Once you have a clear understanding of your service, if you cater to someone's budget by changing your service, you risk either cutting results or over-stretching resources.
Are you making a problem out of your client?
Worse yet, changing how you operate with every client is the fastest way to create a P.I.T.A. (Pain In The A$$) client. These are the clients who, once they understand you'll bend over backwards for them, never seem happy with anything you do. These clients ask for more of your time than any other client, and make you wish they hadn't hired you.
Another illustration of this point came from a conversation I had with Alex Haimann at Less Annoying CRM. Their company focuses on providing simple CRM to small businesses and non-profits.
Related: How to Deal With Unreasonably Picky Clients
"We can usually tell during the initial conversations with a prospective customer if they're only going to be 51 percent happy using our product. For the long-term benefit of our business and that prospective client's, it's better to avoid jumping through hoops for a far from perfect fit," Alex explained.
Recommend an outside option.
Instead, where appropriate, they have recommend outside options that fit better with a prospect's specific needs.
Alex added, "Closing a big deal by lowering your price may sound appealing but long-term it can affect your profitability. You need to provide them the same level of service as your other customers who pay you more."
It's better to say, "no."
Understand what you do well and how to provide the end result for your ideal clients needs. It's better to say "no" to prospects that need something else, instead of saying "yes" to a potential service nightmare.
3. They're committed to failure.
If you're serious about your business, you want to be known for delivering great results and work with people who are serious about getting to the finishline. If you consider which of your clients have gotten those results you'll notice they have qualities in common. These clients are willing to do the work it takes to get the results they say they want.
I've had conversations with prospects that want to hire someone cheaper because, based on past failures.These clients want to feel that if they fail again, they won't have spent too much money.
If you commit to failure and create a safety-net to allow for defeat you've created the perfect recipe to fail -- and feel ok about it. If you can't talk a prospect out of their commitment to failure, it's better to let them go and make space for another client who's ready to succeed.
4. They aren't ready to commit (to you).
Some people need time to think about working with you, or to find funding to hire you. Those people will agree to a follow-up action and will let you know their hiring decision.
There are other people who will string you along. Prospects that don't committ within a reasonable timeframe may interested in working with you. However, they may be more committed to their excuses (time, money, etc.).
Some clients are too uncomfortable to be direct?
Some clients are not interested in working with you, but are too uncomfortable to be direct with you. Instead, they'll set up a follow-up time to check in with you and disappear. Worse yet, some of these people show up and tell you they're still thinking -- leaving you the work (and time) of another follow-up.
These prospects can be difficult to spot at first because they indicate they're genuinely excited to work with you. This would be client may praise you and may even say a verbal "yes" and agree to a first payment date.
There are always indications you can watch for.
If a prospect hasn't committed (signed a contract and paid) after two or three follow-ups, it's best to move on. How a prospect behaves at the start is an important indicator of what your working relationship will be like. There's little value for you to work with clients who may skip payments, miss appointments and end up with a lack of results.
5. You have a bad feeling.
Your intuition is an important guide to whether a client is a fit. I can't tell you how many times I or one of my clients has felt alarm bells going off about a prospect. Beginners often choose to ignore their gut feelings -- and end up with a disaster client.
Related: Should You Actually Trust Your Gut Feelings?
Several years ago I was asked to design a program for a company. Though I wanted to be of service, I sensed a lot of red flags. When I got through the initial devalue hurdle (fighting for and securing my full rate) the project was like a train wreck.
Learn to gage and differentiate your gut-feeling clues.
Every interaction I had left me feeling sick to my stomach and the delivery was a disaster. I ended up not charging them. Had I listened to my gut, I would have saved myself and that prospect time and frustration.
Is something you can't quite put your finger on?
If you feel something about a connection is off, get curious. If you pinpoint the issue, and it's appropriate, try to address it. If you can't figure out the problem or fix it, turning down the business may be your best option.Ironically, turning away business can make your business better. Saying "no" to the wrong clients makes space for the right customers. You'll have room for the clients who get great results and give you excellent testimonials that keep your business growing.