So I shared a story about a 'nightmare' client that my husband has just dealt with in his business into a closed Facebook Group. And holy macaroni, did the story resound with so many entrepreneurs in the group, because let's face it, if you're in business you are going to have your fair share of nightmare clients.
For me, there were two over riding themes to the comments on the post:
How do I recognise that this client is going to be a nightmare?
How do I get rid of a nightmare client without causing myself and my business reputational damage?
What do I mean by a 'nightmare' client you might ask?? You know, the one who wants a discount (even when they pay late); the one who changes the brief/deliverable even though there's a contract/the one who doesn't respect your time or that you have other clients/the one who consistently asks you for quotes but never ever places an order. I could go on, but I'm sure you get the message and there are 'some' appearing for you.
There is the same answer to both questions:
No matter how big or small your business is, you need to understand the client you are wanting to work with better than they know themselves. This needs to be done upfront and is an intensive process, it does not happen by osmosis, this is strategy. Strategy that is a combination of art, imagination and process. And let me be clear that every time you make a 'change' in your business, for example launch a new product, you need to revisit this and refine it.
Once you have defined this client, everything and I mean everything, even down to the internal systems you use, connect you to this client! By doing this, you will weed out 80% of 'nightmare' clients.
And then you need to be ruthless, if the person does not fit your profile of client you want to work with, cut the cord.
I will give you a little peek into what I do with my clients a little later in the post, but first an example and some hard lessons I have learnt. (Because just like you, I have been burnt by 'nightmare' clients. Like I sometimes say: "I need to knock my head a couple of times before I learn.")
One of the criteria for an Ideal Client in my last corporate job was that we only worked with clients who's annual turnover was R500m or more. That would equate to around R2billion in 2018.
We had a saying: "It's not worth getting out of bed for clients who don't fit this profile. They can't afford us."
We were ruthless, but laser focussed. Everything, and again I mean everything, connected us to this client. We drove the same cars the client drove, we 'hung out' where they were, we dressed in the same way they did and every piece of marketing material aimed at them had them nodding their heads in agreement.
We would have clients contact us who didn't fit this criteria. They were handled professionally and referred to an affiliate company who we had partnered with to take on the clients who didn't fit our criteria. And Yes, there was an affiliate referral fee involved. So we both 'won'.
At this point, you're thinking: But Diane, I'm a tiny little business, I couldn't never do that.
And therein lies the decision you have to make: Is this a business or a hobby? (ooh, that stung didn't it. It is a decision I had to take myself not too long ago. It was a brutal question but once I got clear that I am running a business, things started to look a lot different.)
If you are serious about your business, you have step into the Empire Mindset from Day 1! When you don't, you are doing yourself and your clients a disservice. Because you will attract clients who are 'ok' to work with in the beginning, but as you grow and evolve you need to 'cull' them - but they are so comfortable working with you that they have 'cemented' themselves to you! And suddenly you have one process for new clients and another process for 'old' clients and it is just a flipping nightmare.
Now some lessons (Like they say: I have the battle scars):
1. Honour yourself as the CEO of your business. Ask yourself: "Would (fill in a business person you look up to) stand for this bullshit? If not, then why the hell are you? Just like that person, you are a CEO - own it and act like one! Once you start taking yourself seriously, clients will do the same.
2. Create 'Chinese Walls'. Huh, what does that mean? No matter how small you are, at least have a separate email address for finance and send all your invoices through this address. And for all that is holy please ditch the gmail/yahoo address when dealing with clients. By having this finance address you create an invisible boundary - especially one that helps you if you are not good at conflict when it comes money. (Example: Client says can I get a discount? Let me just check with finance and get back to you. Have the chat with yourself in the mirror and let your 'financial manager' make the decision. You will surprised at how difficult she can be.)
This ladies is called becoming 'Unapologetically Successful' by setting up your business as the Empire you want to grow it to from Day 1. And when you make the decision to employ a finance person or outsource the function to a VA, it is slick and seamless.
3. Your Terms and Conditions are sacred. Spend time on them and with every lesson a 'nightmare' client teaches you, refine them. And make your clients sign them - even if that is a WhatsApp message saying I'm good. And Yes, even big corporates must sign your terms and conditions. You are providing a product/service to them that they need, therefore they must adhere to your terms and conditions. And if they won't, ask yourself where else are they not going to honour their relationship with you.
And just while we talking corporates including government: Before you even quote, check their payment terms because they will bully the small entrepreneur into their payment terms if they can. Use this as part of your decision making around whether you want to work with them, as well as how you price. We get sucked into the allure of the deal, but it is often the nitty gritty that catches us out.
Two examples: Most big retailers will only pay you on 60day terms, 45days if you are lucky but then they take a 5% early settlement off your invoice. Most corporates only have 1 or 2 vendor payment runs per month, miss this deadline with an hour and you're screwed. Always remember - most people you are invoicing are employees who go home with their salary at the end of the month no matter how hard they worked or didn't. They don't get why you're so stressed because you haven't been paid.
4. Nightmare clients cost you - sometimes not money but energy/confidence/time/sleep/eating badly/stress induced disorders/you add your own in here. Again, you are not honouring yourself by allowing them to impact you in this way. Like I say: "No client is better than a bad client."
I told you I would give you a little peek into what I do with my clients and here it is.
We create a client avatar - and boy do we have fun with this. As I said earlier in the post - this is part art, part imagination, part process and big magic!!
I have a client who has two dolls who sit on her desk because her business has two distinct Ideal Clients. And Yes they have names because she needs to talk to them. They look like the client she is trying to attract, they are even dressed like the client she wants to attract including the accessories and they are surrounded with the products she wants to sell them.. Behind them on the wall sits the 'Strategy' for each. And everything in her business is aligned to these Avatars. - she steps into their minds every time she looks at them. She even plays music they would listen to when she's creating new products. (She makes me laugh because she will send me a message saying: A is having a tough week, I think I should do a Social Media post on ...)
Did it take us 5minutes to do this? Nope! It took intense coaching sessions where I challenged her to think bigger and step into the Empire Mindset and own her business. It took research by both of us and sometimes she didn't like what I was saying. She used tools that I have used with global companies but have adapted to not overwhelm, but rather empower and inspire.
You owe it yourself and your business to spend the time on Defining your Ideal Client and then gearing your business to meet what they are looking for.
If you want to Step into the Empire Mindset and become 'Unapologetically Successful' in your business, I would love to chat.