By Karen E. Klein Every business owner knows the signs: They are never pleased with their orders. They pay you only after repeated reminders. They haggle on price and demand extra work for nothing. They're unpleasant for your employees to deal with, and no matter how much you go out of your way for them, they're impossible to please.
We're talking about clients from hell.
A lot of entrepreneurs, especially those who are new to business ownership, think that putting up with difficult, imperious, demanding clients comes with the territory. But Leslie Godwin, a small-business coach and counselor based in Calabasas, Calif., disagrees. The mature, confident, and successful business owner quickly relinquishes the myth that "any client is a good client," Godwin says. Hellish clients, they realize, will hurt their business in the long run -- no matter how much revenue they bring in over the short term. Godwin trains the entrepreneurs she coaches to drop bad clients as fast -- and as politely -- as they can.
Q: How does a business owner recognize a client from hell as opposed to a picky -- or even prickly -- customer that may be difficult but worth keeping?
A: Clients from hell are demanding, unrealistic. They won't accept reasonable explanations of your own limitations, won't listen to your recommendations, and they're always unhappy, no matter how much you do for them. Clients that are unhappy will talk badly about your business, and that's deadly to your reputation. They also stress out your employees and generally make your business unpleasant for everyone. You're taking a big risk keeping these people you can't please on your client list.
Q: If these folks are so unpleasant, why is it often so hard for business owners to get rid of them?
A: Too many small-business people think they have to accept every client and every job. If you have a niche and know what you do best, who you serve best, and you stick to those categories, your business will be stronger and easier to grow. Growing a business means that you define who you want to serve and who is the best match for your services or products. Then, you focus on that target market. So from the beginning, I tell business owners to turn down people they can't serve, and people who are more trouble than they're worth.
Of course, sometimes a client seems finicky or unhappy in the beginning, but it turns out later that you did fine with them and they're happy in the long run. Those people you can put up with. But there's a big difference between a picky customer and one who's never satisfied. Sometimes it takes finding out the hard way to know when you have a client from hell on board.
Q: What happens when you find out the hard way?
A: You hear that they're bad-mouthing you to your other customers and to potential customers. They file a lawsuit against you. Your employees start quitting because they can't deal with this person any more, and you start getting burned out trying to fix the problem. Destructive clients also contribute to you losing focus on your target market and core business.
Q: What if the client from hell is your biggest account, and you really can't afford to let them get away?
A: Well, if you've only got one really big client, you're putting your business at risk anyway by being too dependent on that one account. But you have to differentiate between a difficult client and one who is actually going to hurt your business. Even if that client from hell is your biggest customer, you will need to taper off their business before they turn on you.
Q: How often do these horrible clients really walk through your doors?
A: Every business owner has got a story about a client from hell. The ones who are smart only have one or two stories, and then they learn from their mistakes and say, "Never again!" Others have one of those clients all the time because they are really too nice for their own good, or they're too immature in business to know that they don't have to accept everybody who wants to pay them. Getting rid of a client from hell is part of maturing as a business owner.
Q: How do you get rid of them?
A: Be polite but firm about turning down their future business. You may have to negotiate in the short-term to finish up their job, but don't negotiate whether they get to continue using your service -- they will take advantage of any flexibility you show them. I tell my clients to be professional and courteous. You don't want to give them any more reason to go bad-mouthing you. It's like when you're raising a two-year-old: It's very easy to slip down to their level and start acting like a toddler yourself, and sometimes with these clients, it's easy to treat them like you'd never treat another client. You have to resist that impulse.
If you can, explain why your passing up their business will benefit them, such as: "We aren't a big enough company to meet your need to have custom service at the lowest prices...why don't you try Company X for that?" or, "I won't be able to get your order out when you're asking for it, but Company Y can get it out much faster than I can." Just don't be surprised if your competitors call to complain a few months down the line!
Q: How do you keep these bad apples out of your database in the future?
A: List all of your clients from hell and write down how they drain you, your staff, and your resources. Then write about the first small -- or big -- clues you had that they'd be difficult. Make notes about how you will spot these kinds of clients much earlier next time and why you need to avoid them, then highlight the important clues you've identified and think about why you didn't see them at first. If they need to, I advise my clients to actually tack up some key phrases about what they've learned on their walls or near the phones, where they will see them the next time an impossible-to-please client calls. Have a question about running your business? Ask our small-business experts. Send us an e-mail at email@example.com, or write to Smart Answers, BW Online, 6th Floor, 2 Penn Plaza, New York, NY 10121. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.