Have you ever had a difficult customer who refused to pay, dragged a job out until it became unprofitable, or kept you up at night because of the way they treated you?
If you have, you wouldn’t be alone. What if you could avoid difficult customers altogether? There are several red flags to watch out for. If your potential client displays one or more of the following, it may indicate they could be more trouble than they’re worth.
The seven red flags
1. Extreme haggling over price
Before you quote, consider asking the client how many businesses are competing for the project at hand. If there are more than three, there is a good chance that the customer may be a price shopper and only interested in price. This type of person 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. Depending on the service you offer, you may be able to charge for creating a proposal. This is something that we assist our clients with packaging/bundling up, as this acts as a qualification point to discourage the price shoppers.
2. They promise you future work but it’s all talk
This type of customer 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 treat each project on its merits. This client may just be seeking a discount. Price each job individually and mention that if there is future work you will appreciate it. However, focus on one job at a time, stick to your required margins and deliver great value.
3. They are disorganised
This customer appears all over the place right from the start. They could be late for meetings, appear not to have all the information and frequently waste time. This could be a sign of things to come. This type of customer can cost you hours, if not days of lost profits in the future. Listen to your intuition and move forth from there.
4. Unrealistic deadlines
This customer expects you to drop everything for them. A reasonable customer would understand that you will have other projects on the go and need to manage this workload effectively. Expecting you to drop everything from the very start, can indicate a customer who will call you 24/7 and expect an immediate response. Given the challenges with COVID-related illness, supply chain issues and extreme wet weather in 2022, it is important that a customer is understanding and can work with unforeseen circumstances.
5. They complain about other trades
What Peter says about Paul says a lot about Peter. If a customer whines and complains about other trade businesses, it is extremely likely that they will whine about you too. While they may have had a poor experience with other trades, the way they talk about others gives you a good insight into their character.
6. 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, clarifying 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.
7. 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. Trust your instinct; you don’t lose money on jobs you don’t take. Many people have ignored their gut instinct only to regret it in the future.
Jon Mailer
PROTRADE United CEO & Founder
Thanks to business coaching and advisory provider to the construction and trade industry, PROTRADE United, for sharing their tips on how to avoid problem customers. Here’s hoping this advice helps you in the future. For more support on how to deal with problem customers or other business advisory needs, PROTRADE United, is available to chat further. They can be contacted on 1300 767 774 or visit protradeunited.com.au