Trust Your Instincts
Spot the Warning Signs of a Difficult Customer
Business leaders and marketers must go beyond the traditional customer segmentation process and evaluate prospective customers as they would an employee hiring process. They should assess the individual for cultural fit and identify undesirable personality traits and mannerisms misaligned with their organization’s values and growth objectives.
Any customer-facing role is at risk of landing a toxic client, and this extra step in profiling is critical for both business-to-consumer (B2C) and business-to-business (B2B) enterprises. Whether you have a retail or service-oriented business, profiling your ideal customer profile to factor in the “ease of doing business” will save your employees heartburn and your business resources (i.e., time, money, reputation, extra personnel, etc.).
Learn to Recognize the Signs of a Toxic Customer
Would-be problem clients or customers usually raise red flags or make you feel uneasy at the onset. If something seems “off” during an exploratory meeting, it probably is.
Trust your instincts! They can prevent you from entering into a toxic business relationship with an individual (and a business) that doesn’t align with your mission, values, or company culture.
Prospective clients that have the potential to derail business as usual present common warning signs business owners and marketers must not ignore.
Examples of identifiable danger you can identify during the initial exploratory meeting include the following:
Unclear Business Goals: Unless you specialize in helping start-ups or provide business plan consulting, this is usually a red flag for indecision and/or sign that projects could easily run off-scope (i.e., scope creep in time, budget, agreed upon deliverables, etc.).
Balking at Fees or Rates: If a prospective client starts questioning your fee structure or commenting on a competitor’s quote as too pricey, know that this client is price-sensitive. Their priority may not align with your premium service or product. Don’t undercut your rates or offer a discount to win the business. Taking on a client who shows these warning signs may present you with payment collection issues in the future.
Temperament: If someone is rude or hostile, do not engage! No matter your business or profession, everyone deserves to be treated with respect. You’ve no doubt seen signs at doctor’s offices and restaurants advising patients and patrons that rude behavior will not be tolerated. Adopt this approach at your business! Your good customers - and employees - will thank you.
Gather Business Intelligence: Tools and Tactics to Avoid a Toxic Customer
If your gut tells you something is wrong, and you’re the type that likes to be well-informed, consider tools to defend your business against toxic customers. Businesses of all sizes should avail themselves of tools and tactics that large corporations and organizations routinely use to gather business intelligence and protect their operations.
What is Business Intelligence?
Business intelligence is “a systematic, targeted, timely, and ethical effort to collect, synthesize, and analyze information on the external operating environment to produce actionable insight. When combined with internal company information, it should give an executive as complete a picture as possible of the total decision-making environment.”*
Consider a low-cost background check tool. Tools like Forewarn offer a subscription service that allows you to perform quick criminal, financial, and identity checks with minimal information.
Perform a customer credit check. Dun & Bradstreet, a standard tool used by Chief Financial Officers (CFOs), is a more expensive tool that can provide you with a credit report for businesses.
Gather intelligence in the public domain. Check customer reviews on Google Maps and social media platforms and speak to colleagues or industry vendors to obtain informal background information.
Include an exit clause. Ensure your standard customer agreements have an exit clause - for both parties. An exit clause helps manage expectations, protects both parties, and serves as a transparent reminder of the terms or conditions that result in the termination of business.
Once You’re Stuck with a Toxic Customer
Once you realize you’re stuck in a toxic relationship, there is no time to waste—get out! Exiting toxic relationships cleanly requires your best judgment, documenting communication with the client, and framing the separation as a win for the client. If you separate in this manner, your business has the opportunity to keep your reputation intact.
In addition to the toxic customer warning signs presented at the onset, clients that demonstrate the below behavioral tendencies indicate a malignant person you’ve already “hired.”
Respect for boundaries: If you have communicated and established boundaries and a customer doesn’t respect your work-life balance, agreed-upon timelines, out-of-office hours, or other established limits, this is probably not a healthy working relationship.
Resistance to advice or unwillingness to collaborate: When clients don’t accept advice or recommendations at the expense of a project, it’s a sign to drop them. A bad project outcome is a reflection of your business. A risk to reputation is greater than the risk of dropping a bad customer.
Lack of communication: If your customer isn’t providing you with the necessary inputs at the expense of project success or frequently changes their mind on objectives, it may be time to let the client go. Protect the reputation of your business above all else.
Summary
The more toxic clients you avoid or drop, the more space and resources you have to onboard good, long-term partners. They are partners because business leaders and marketers should always develop a win-win relationship with their clients. Your goal is to see your clients succeed and their businesses grow. As a result, your business will thrive and expand.
Related Article
Note: The author is not affiliated with the software companies referenced in Trust Your Instincts: Spot the Warning Signs of a Difficult Customer.
*Source: Thunderbird School of Global Management at Arizona State University
For marketers and business owners with an innate sense of their target market and audience, pinpointing their ideal customer isn’t always straightforward. To simplify the process, they should examine their existing customer base and answer the basic questions: who, what, when, where, why, and how.