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5 Tips for Dealing with Unhappy Clients If you simply demand pay, you will have won the battle and lost the war.

By Doug and Polly White

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Opinions expressed by Entrepreneur contributors are their own.

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If you are in business, you will eventually have an unhappy customer. The key is knowing to react. We know because we had such an experience ourself.

Related: Exceeding Client Expectations Just Leads to Really Entitled Clients

The client had written to us, expressing unhappiness with an invoice. And that meant we had a choice. We could write back, justifying our fees, and ask the client to pay -- in which case, our client, being an honorable person, probably would have paid the bill in full. However, that strategy most likely would have meant that we'd heard the last from that client.

At best, he would never use our services again. At worst, he would advise other business owners to steer clear of us every chance he got. So, if you're in our position and take the approach of simply demanding pay, you will have won the battle and lost the war. We chose an alternative. Here are some tips for doing that.

1. Communicate in person.

When dealing with complex or emotional conversations, our advice is to engage, using one-to-one communication. Don't write your response; request a face-to-face meeting. At a minimum, make that meeting a phone call. You need to be able to communicate empathy and concern. You can't do this nearly as effectively via letter or email.

In our case, the small business owner was traveling. We didn't want to wait a week to address the problem. Consequently, we called this man.

2. Focus on the customer's concerns.

When you meet (or speak) with your client, focus on his or her grievance. Ask clarifying questions. Seek to understand. Do not begin by justifying yourself, your company or your invoice. Instead, do everything you can to see the issue from your client's point of view. Most people do not voice a concern without a justifiable reason. Understand the reason for your client's concern.

We practiced these exact steps when we called our client. We listened to his reasons for contesting his invoice, starting with a simple question, "We understand that you don't think our invoice is correct. Can you please explain your concerns?"

Related: 5 Proven Ways to Create Long-Lasting Customer Relationships

3. Show you understand the problem.

After your client has explained his or her concerns, use active listening skills. Give feedback to your client about what you believe you heard the concern to be. The client may correct you. That's fine. Restate your client's concern based on your new understanding. Continue this process until the client says, "That's right. You've got it."

After listening to our client and providing feedback that showed we understood his concerns, we realized that there was a misunderstanding surrounding the hours charged. It was an "aha" moment for us.

4. Respond.

Once you understand your client's concerns, decide how to respond. If you agree that he or she has a valid concern, acknowledge it. Agree to do the remedial work to correct the situation free of charge. Reduce the charge on your invoice. Do whatever is necessary to fix things. Make sure that your client is thrilled with your customer service.

Even if you still disagree with your client's point of view, acknowledge that he or she is upset. Tell the client how sorry you are that there have been misunderstandings. Explain your point of view in a non-defensive manner. Do not raise your voice or show the slightest bit of hostility. If possible, bring to the discussion new information of which your client is not aware.

At the very least, cast the known information in a different light. Reiterating what he or she already knows with no new prospective is less likely to be effective.

In our case, the client believed that we had spent a number of hours on a cancelled project. This was not the case. We had billed a few hours toward the abandoned project before the owner made the decision to stop. However, most of the fees were for another, ongoing project.

5. Make concessions.

Finally, even if you think your actions were completely justified, give your client a peace offering. It may be 20 percent off the current invoice. It may be 40 percent off his or her next purchase (which increases the probability that he or she will do business with you again). Offering nothing says you are right and the client is wrong. Even if this is true, you'll be the loser.

The client may not always be right, but the client is always the client. He or she is the one who writes your paycheck. Never forget this.

Although our invoice was completely justified, we decided to give our client a concession. We discounted the hours spent on the scrapped project. He was happy and paid his invoice.

On the rare occasion, you may find a customer who continuously takes advantage of your generosity. We have. In that case, you may need to end the business relationship. This will not often be necessary, and when it is, it's better for you to be the one making the decision.

Related: How to Deal With a Difficult Customer-Service Conversation

You can respond to an upset customer by proving you are right. Even if you are successful, you'll lose. It's better to take the opportunity to create a loyal customer. A small expense now will yield great returns in the future.

Doug and Polly White

Entrepreneurs, Small Business Experts, Consultants, Speakers

Doug and Polly White are small business experts, speakers and consultants who work with entrepreneurs through Whitestone Partners. They are also co-authors of the book Let Go to GROW, which focuses on growing your business.

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