The goal of every business owner is to get more sales and customers.
Good customers will be loyal and boost your revenue. They might also refer other customers. On the contrary, bad customers won’t reward us and may even hinder us from serving these good customers.
Thus, it’s crucial to identify these unfit customers. Here are some warning signs of bad customers and solutions on how to deal with them.
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1. Aggressive & Rude
I’m sure you’ve heard horrifying stories of angry customers using verbal abuse, offensive language and threatening words. Like how some customers yell on the phone which is plain rude and unprofessional.
These rude encounters are mostly faced by the customer service and support department. But when the customer service and support department reach out to the relevant department regarding the customer’s query, this negative emotion will pass on and spread to the other employees.
Hence, you need to solve this before it becomes a bigger issue.
No one should be treated like this. Such customers will create stress for your employees. They might also accuse you of poor customer service when their demands are not met.
The first thing you need to do is figure out if this is an unhappy or rude customer. If they’re unhappy with your products or services, it’s okay for them to express their dissatisfaction.
However, if they’re rude, you need to stay calm and don’t take it to heart. Listen to what he or she says and apologize (if appropriate). If the customer is wrong, you’ll need to stand firm and be assertive. You can also ask your superior to step in.
If this customer is rude almost every time, you’ll need to talk. A real conversation where you let them know that you can’t tolerate this behavior (tactfully, of course).
But if they cross the line and become abusive, you’ll need to record the conversation and save all emails for law enforcement purposes.
2. Needy & Clingy
Have you ever been pestered by customers who call you every day?
This is another warning sign of a bad customer.
It is reasonable and expected that new customers who just started using your product or service will need more hand-holding. But you need to note down customers who are taking too much of your time.
Such attention-seeking customers will require a lot of resources. Even if you have the manpower, it’s not fair that you spend more time on this customer over other customers who also bought your products and services at the same price.
You could direct new customers to your FAQ page which should answer most of their questions.
For the remaining customers who are very concerned and keep pestering you, you can explain to them that you have many customers who have urgent tickets too. Let them know that you appreciate it if they enquire about urgent matters only. Or you could suggest a weekly or monthly call, rather than calling every day.
3. Always Unavailable
On the other extreme end are customers who can’t be reached. Unresponsive customers are bad too.
You can’t ask them if they encounter any problems. You can’t ask them for feedback or get ideas on how you can improve your products or services. There’s no chance for you to upsell or cross-sell either.
You also waste a lot of time tracking them down and scheduling a meeting with them.
Before you begin your project, talk with your client and agree on a communication channel and frequency. For example, you could schedule a monthly or quarterly call. It doesn’t have to be as frequent as customers who want all your attention.
Also, use this chance to educate your client on the importance of collaboration like how collaboration is key to a successful partnership. Therefore, regular communication is crucial for success.
4. Ficke & Unreasonable
If you provide services, I’m sure you’ve at least encountered a client who requested numerous revisions above and beyond what was promised.
Such clients make unreasonable demands because
- They don’t know what they want
- They are fickle and thus, keep changing what they want
Unreasonable demands also include being vague with their feedback. By editing your project based on this unclear feedback, there is a high possibility that you’ll be blamed if you do not deliver what the client has in mind. Simply put, you’re being blamed when the client wasn’t specific in his feedback. Thus, you need to dig deep into what the client wants exactly.
Be upfront and include the revision policy in your pricing plans and packages, everything from the number of revisions to the definition and examples of major and minor revision. Do state the additional cost for each change. For example, you could charge $100 for changing banners.
If clients are aware of your revision policy and still make these unreasonable demands, you’ll need to explain to them that your effort is wasted every time they request to change something. Furthermore, they’ll need to compensate for the manpower and time already invested as well as the additional manpower and time to make the change.
5. Late-Paying: Don’t Pay On Time
Cash flow is important to all companies. It pays for everything that makes your business run.
- Materials to create your products
- Office Rent
- Operating Expenses
Positive cash flow ensures that your business is running smoothly.
Hence, when your customers don’t pay on time, this will reduce your cash flow and compromise your day-to-day-operations. Or worse, you might have to dip into your reserves.
Not only do you lose out on the payment for the products and services provided, but you also spend resources collecting payment. Each payment reminder email requires effort and each invoice requires time to create and process. This time could have been put to better use. For example, your employees could have used this time to work on valuable tasks that matter to the company.
Break your project into smaller chunks then get your client to agree on paying by milestones. Let’s say you provide web design services. You could get your client to pay for each item (in this case, each page that was redesigned) or pay in phases (Planning > Wireframe > Design > Testing > Launch).
Or you could ask for upfront payment. This could be a policy for all customers where you start work only after receiving payment. Firstly, this ensures fairness among all your clients. Secondly, this solves the problem of late payment since everything is already paid.
Another solution would be imposing a late payment penalty which could be a percentage of your bill or a fixed amount. Late payment penalty is meant to deter clients from paying you late (not as an additional source of income).
6. Non-Paying: Refuse To Pay
In rare cases, you may encounter clients who are not willing to pay you for the products and services rendered.
This type of non-paying customers will be harder to identify than late-paying customers. Unless they explicitly tell you that they don’t intend to pay, you wouldn’t know and would probably assume that they’re just late in payment.
Rather than blaming your clients, the first thing you need to do is understand their reason for not paying.
Some customers may have just forgotten to pay and you just need to send a reminder email. Take note of this and consider setting a recurring task to send this reminder email to client.
On the other hand, some companies have a lot of red tape. The numerous paperwork and approvals from different decision makers will slow down the process and thus, it might take a long time before payment is approved and processed to you. Again, take note of this and consider sending your invoices earlier.
If your client has a cash flow problem, you might choose to wait and give them a grace period of a few days to send the payment. But bear in mind that you need to state your hard deadline. This ensures that your client doesn’t drag payment.
Didn’t Deliver Promised Results
Some clients may not want to pay you because you didn’t deliver the results you promised. You’ll need to check your refund policy and disclaimers then review the promises you made to the client. Mention the key points in your refund policy and disclaimers that are relevant in this case and explain what you’ve done for them (list each item down if necessary). Both of you could take a step back and compromise.
Last Resort: Sue Them
If worst comes to worst, your customers still don’t want to pay you even after you’ve talked to them, you’ll have to sue them. Let them know that you’re left with no choice but to bring this to court and let the judge decide. Also, let them know that you don’t really wish to take this last resort and that you hope that a settlement can be reached.
I believe that the relationship between a customer and a company isn’t one-sided but two-sided. Both parties need to invest time and energy into the relationship. This is especially true if you provide services. You and your client will need to collaborate and work together. It’s a partnership.
Many problems occur when clients and you don’t work together. Examples include miscommunication and misalignment. If your clients don’t heed your advice and end up failing, they might blame you or even give you a negative review.
Keep emphasizing and reminding your clients that this is a collaboration. Tell them that it’s important that the two of you work together towards success.
Reach an agreement with your client and set some rules and schedules like a weekly catch-up and quarterly review. These regular face-to-face meetings will help align everyone and ensure that you’re all on the same page.
It’s also a good chance to bring up any impediment or obstacle so both of you can solve it together. This could be execution problems (perhaps due to issues with the software), communication problems (like communicating via email when an in-person meeting is more appropriate) or project management problems (such as unclear tasks and slow approval).
Now It’s Your Turn
What are some bad experiences you’ve had with customers? How do you deal with them?
Do you notice anything common among these clients? Do share the warning signs with fellow entrepreneurs~