Working With Difficult Clients: How to Handle a Loose Cannon without Getting Burned

Everyone has difficult clients, the ones that make you wince when they call, you dread meeting with, and you lose sleep thinking about sending your bill to and having to deal with their adverse reaction.  However, there are simple steps you can take to improve your business relationships with these loose cannons.  The following are six ways to handle difficult clients:

1. Watch for warning signals.It's easier to not start a relationship than it is to sever an ongoing relationship.  When you are interviewing potential new clients keep an eye out for warning signs such as potential conflicts of interest, involvement in high-risk business, unrealistic expectations or mild personality disorders.  Many times warning signals show in an introductory meeting but because a business desires the challenge of the work, or could really use the additional revenue, they choose to take the client on anyway.  While it might seem like a good idea at the time, this can be a costly mistake.  When you are weighing a potential new client remember to factor in their behavior and their expectations.  If it appears that it will be less than professional in the future, you should seriously consider the situation before taking them on as a client.

2. Prepayment is a must.

When rendering a service in today’s cutthroat business world you should always request prepayment from your clients.  When you encounter a client that is a loose cannon you will fully understand why.  Although you may be a professional and always do the right thing, you cannot expect that same behavior of others.  This is especially true when providing a pure service, where there is no transfer of physical goods.  Often a service may have a high perceived value prior to rendering it, but afterwards, since the client is not really left with any physical evidence, that perceived value can change.  For example, before getting a massage a client is in pain and they really want one and $100 sounds like a reasonable price to pay to alleviate this terrible pain and tension.  Afterwards, however, they feel pretty good, their pain is a thing of the past and suddenly $100 for an hour on a table may seem like too much for a back rub.  Make sure you settle up before you render the service, because you can’t get refund on your time.  Too many people will try to renege on payment because they have blown their budgets on bad business decisions and this should not be part of your risk.  Take this out of the equation by simply saying, “Our policy is payment up front.”  By using this phrase you can keep it professional instead of personal.  The only ones that you will lose with this approach are the ones that would have given you trouble, so losing them is a good thing.

3. Stay out of the drama. Do not get pulled into your client’s drama.  Even if your relationship becomes more personal as you become more of a trust advisor or confidant to this particular client, it is important to keep your relationship with your client drama free.  You can do this by keeping the issues current and by remaining an adult, responding rather than reacting.  Drama is easy to get pulled into, and since they are your client you will have a natural tendency to want to help.  They will want you to get as worried or excited or frantic as they are and it will be difficult not to get swept up in this especially when dealing with someone with a strong personality and a strong desire.  However, part of the value that you provide as a third party is your neutrality, so cling to it.  Make sure you remain unattached because this is what allows you to offer the perspective, skills or solutions that the client lacks.  You don’t want to appear to be uncaring when they are unloading all of their issues and panics, but they will ultimately be better served if you remain in the rock of strength position, solid and grounded, and not to be swayed by the whim or crisis of the day.  You will have a better chance of actually working effectively with your client if you follow this policy without exception.

4. Get it in writing.

With phones and the internet speeding up our business transactions we can sometimes forget to get things in writing like expectations, job requests and approval.  This is never more important than when you are dealing with a client that is a loose cannon.  They are prone to blustering and giving you directives that they will later deny.  Often when people get into their crisis mode, they are not even entirely aware of what they are doing, they just start spouting off requesting that you do things that are not necessary or could potential damage their own image.  The speedy communication devices of today are an efficient way to confirm your client’s expectations.  Send them an email reiterating what they asked you for and what you are going to do to satisfy that request.  Sometimes seeing it in writing will make them realize their own irrationality and bring them back to the land of reason.  If you also assign a time estimate of how long it will take to complete that it may help them to realize that everything has a cost and time component to it, which is something that loose cannons often forget.  They want everything they ask for now.  When they realize that this is going to cost a certain amount of money, or delay other pressing priorities, it will help them to put things in the proper perspective.  By reflecting back their verbal expectations to them in a written form it helps them to think more clearly as they can now see what they are asking for.  Documentation and liberal communication help ensure that if a mistake or misstatement has been made it will be caught before a problem arises. 

5. Make sure you are not putting all of your eggs in one basket.

It is exciting when one client engagement starts to grow and generate more revenue for you.  It is often easier to grow existing client relationships than it is to attract and build brand new ones.  And it is also a sign that you are doing a good job of delighting your customer and providing good service.  However, there is a danger here when one client starts to dominate your portfolio.  Just as you would never want to have your stock portfolio too heavily weighted in one company or one industry, as you build a book of business it is important to diversify as well.  As one client starts to take a dominant role in your overall client portfolio there is a balance of power shift that is not in your best interest.  A good rule of thumb is that no one client should ever make up more than 30% of your revenue.  Ideally as you grow you want this number to be closer to 10%.  However, with startup and small businesses this is a hard principle to stick with because most small companies will gladly take revenue from wherever they can get it.  When faced with a client that is difficult, but represents a substantial portion of your business, you need to have the discipline to not get sucked in.  Of course you want to continue to offer great service but don’t do so at the expense of your own business building efforts.  Keep making time for your own business development activities, they are just as important as servicing your clients.  Keep networking, marketing, going on sales calls and seeking new clients.  Don’t get sucked into doing more work for your existing clients than you are paid for thinking it will be worth it in the future.  Keep your eggs spread out in different baskets.  Depending on one client especially a difficult one is a big mistake.

6. Decide when to say when.We have all dealt with clients who are extremely needy, demanding or otherwise complicated.  However, if a client does not respond well to boundaries and protocol that you set for your business, then you are in trouble.  Each of us must decide what limits we will allow a client to push us to and where we will draw the line.  You should always remain professional and composed with a client.  There is no excuse for loosing your cool.  To prevent letting frustration build up know where your line is and clearly define it to yourself and to your clients if you can.  You are in control and by having a balanced portfolio you can insure that you never lose that power.  You should always be able and willing to let go of a client that becomes abusive or undesirable. 

In business and in life we are all bound to make mistakes.  Bringing a difficult client into your business life can be one of those mistakes, but you can avoid that mistake or turn it into a positive if you follow our advice.  It comes after years of learning the old fashioned way through mistakes and missteps ourselves.  Part of the advantage of having an advisor is to not have to live through all of the mistakes yourself.  Learn from those who have already been down that path.  Of course, making mistakes is a part of learning but so is taking good advice.  To gain other useful business tips visit www.flourishingbusiness.com.