Don't Let Your Business Be Held Hostage by a Nightmare Client
Here are the warning signs that a customer relationship is turning toxic and you need to get out.
Opinions expressed by Entrepreneur contributors are their own.
Why do small business owners find it so difficult to let that nightmare client go? There could be myriad reasons -- the loss of revenue, but also the perceived loss of prestige, power and stability. A small business owner might feel the need to stick it out with the bad client because of a flawed mindset. He or she may think, "It will get better." It doesn't.
There's the feeling of failure too. And that leads to more thinking, "Maybe it's my business that stinks and not the client." Or, "Maybe I'm too sensitive and I need to be tougher to deal with horrible clients." If a small business has enough troublesome clients, the business owner could end up thinking he deserves to be treated badly.
Related: When to Fire That, Er, Abusive or Disruptive Customer
In a less-than-robust economy this kind of business bashing happens all the time. It has happened to me and several of my colleagues. It is a difficult decision to fire a client, especially when that client knows your business depends largely on the revenue you generate from them. But you must gather your self-respect and remember that old saw, "A leopard doesn't change its spots." Meaning, you can't change a bad client into a good one. It's far better to let that client move on than to beat your head (and your employees' heads) against a brick wall.
So, what are some of the warning signs that signal you need to fire the client?
1. Your client is unethical and he or she expects you to ignore it. If a client is caught in a lie to you or your employees, take note. If a client lies about a small thing, it's more likely they are capable of an even bigger lie. If you continue with a client like this it may be extremely hard to divorce your reputation from the client's if the lies are discovered.
2. Your employees (or you) cringe when the client calls. This is never a good sign. According to the Gallup Organization, the American economy loses about $350 billion each year due to a lack of productivity and performance associated with low morale. A horrible client costs you more than just low employee morale, it contributes to high employee turnover too.
Related: Why You Should Fire Some Clients
3. You're losing money with free work. Sometimes a business starts with just a few clients, and spends extra hours and time on those clients beyond the agreed amount. Or, a client expects extra service for free and you and your employees feel frustrated and stressed. If you have allowed this to occur without billing for the extra time, it's your fault. Explain the problem and bill for the extra hours. If the client continues to expect you to work for free, you might want to help them find another business partner that is a better fit.
4. Nothing you or your employees do is "right." The client that constantly complains about your business or your staff isn't doing you any favors. You may think the money this client brings in is worth the pain, but often the stress in dealing with the continued complaining can make employees sick. In fact, according to a recent survey by ComPsych, doctors suggest stress is the causative factor of illness underlying more than 70 percent of all visits to the family doctor.
The bottom line? Don't let your small business be held hostage by nightmare clients. If your blood pressure goes up just thinking about talking with this client, imagine how your employees feel. You may suffer a temporary financial hit, but when you and your employees don't have to deal with that stressful client, your business environment will improve and you will be able to attract better clients.