How to Protect Yourself from Difficult Customers in Uncertain Times
Have you ever had a difficult customer that either refuses to pay, drags a job out so that, eventually it becomes unprofitable or keeps you up at night because of the way they behave and treat you personally.
Many trade/construction business owners have had to deal with a difficult client/customer at some point. There are several red flags that can indicate that someone might turn into a challenging client during a project. When your potential customer or client displays one or more of the following, it may be worth considering saying ‘no’ with conviction. If it isn’t a 100% ‘yes’, then it’s a ‘no’!
With the economic climate in 2022/23, it is more important than ever to be aware of every customer that you choose to work with. Here are 7 red flags to look out for and then choose accordingly:
- Extreme haggling over price. It may be worthwhile enquiring as to how many other businesses are competing against the job at hand. If you have more than two other businesses competing for the same job, there is a good chance that the customer may be a price shopper and only be interested in price. This type of person also haggles from the very beginning and continually suggests that other companies are prepared to do it cheaper. Your ideal clients accept that you will offer great value and are prepared to pay for it without being too extreme. Anyone who quibbles over the price right from the very start will also be someone who will quibble about the price right till the very end. Depending on the service you offer, you may be able to charge for creating a proposal, something that we assist our clients with packaging/bundling up, as this acts as a qualification point to discourage the price shoppers.
- They promise you future work - "all talk". This type of customer talks a lot. They may present you with an opportunity by saying if you do a great job, at a ‘cheap’ price, there will be plenty of work for you in the future. Take this with a grain of salt and just treat each project for its merits. This person may be wanting to "butter you up" so that you may provide them with a discount on the first job, with lure of future work. Price each job individually and mention that if there is future work you will appreciate it, however, let's focus on one job at a time, stick to your required margins and deliver great value.
- They are disorganised. This customer appears all over the place right from the start. Often, they will be late for meetings, appear to not have all the information and will waste time continuously. This will be a sign of things to come, so unless they can dramatically change their behaviour, this type of customer can cost you hours, if not days of lost profits in the future. Listen to your intuition or ‘gut’ and move forth with from there.
- Unrealistic deadlines. This customer expects you to drop everything for them and acts as if they are the only one that matters. A reasonable customer would understand that you will have other projects on the go and that you will need to manage this workload effectively. Expecting you to drop everything for them, from the very start, can be an indication that this is the way they will behave in the future and could end up being the type of customer that will call you 24/7 over the slightest detail and expect you to be there for them as an emergency call out. Given the challenges with COVID-related illness, supply chain issues and extreme wet weather in 2022, it is important that a customer understands and can work with unforeseen circumstances.
- They complain about other trades. What Peter says about Paul says a lot about Peter. If this customer whines and complains about other trade businesses, it is extremely likely that you too will be mixed into the list. Take note of this and be weary of the way they describe other people and as a suggestion avoid these potential clients. They may have had a poor experience with other trades, but how they talk about them gives good insight into their character.
- They won't put things in writing. To protect yourself as well as the client, it is important that a work agreement or contract is in place that clarifies all the expectations of the job. This includes how to handle variations, payment, timeframes, and delays. If a customer is not prepared to sign anything from the start, or won't put variations in writing, then this is a sign, that matters may backfire in the future. Plenty of trade businesses have lost out or become bankrupt due to non-payment, because no terms and conditions or agreements were signed in the initially. Tread your own path!
- Your gut/intuition senses a problem. Sometimes there can be all the logic in the world to go ahead with a customer, yet you have a feeling that a customer will be difficult to work for in the future. It is okay to trust that instinct and decide. You don't lose money on jobs you don't take. Turn it down, with no regret, if you are uncomfortable about a job or the person. Many people have ignored their gut instinct only to regret it in the future.
Unfortunately, many trades go through dealing with customers like the ones above, before they learn these hard lessons. Ideally, this article has provided insight to ensure that you enjoy a hassle-free business when dealing with customers.
For more support on how to deal with customers that are either not paying or causing other challenges, call PROTRADE United on 1300 767 774 or visit www.protradeunited.com.au
Written by Jon Mailer
CEO Of PROTRADE United