4 Instances When You Should Not Work With A Customer

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Customer is indeed king. But that may not necessarily hold true all times. As a business owner, each client comes with an opportunity cost. The time you spend in dealing with any one of them is sunk investment that you may not be able to spend with another. Therefore, you should only take on a project if you think it has a worthwhile ROI. Here are some instances when you should consider declining a project.

Client Bargains A Lot

Bargaining is an inevitable component of any business transaction. But a client who tries to bargain you down to the last penny may not be worth the deal. For one, this involves a lot of back and forth communication that drains your marketing resources. Also, such clients typically also seek way too many favors from a service provider. In the end, a transaction with such clients often ends as a loss-making proposition to the service provider. It is for this reason that business gurus often advise entrepreneurs to not compete on price – such a strategy always gets you to deal with such clients who you should have not signed up in the first place.

Client Cannot Pay

In a lot of service-based businesses, the payment is made only after the service has been provided. This can prove tricky if you have signed a contract worth thousands of dollars and the client is not liable to pay till you have completed the project. Even though you may draft a contract to cover yourself legally, it may not make sense to pursue a non-paying client in the courts. A better alternative is to either request payment upfront (or break your project into phases). If that is not possible, it is recommended that you avoid hiring these clients. So how do you identify a client who cannot pay? A FICO credit score under 630 is generally regarded ‘Poor/Bad’ and clients in this range must be avoided.

Client Does Not Respond Promptly

When you assign someone from your team to work on a client’s requirement, you are essentially tying them up to one project. A client who does not promptly respond to email or calls from your team is likely to immensely bring down the productivity of your team. This raises your operational costs and is thus an important factor to consider. However, unlike the other points mentioned above, it is possible to explain to the non-responsive client about the need for quicker response and is thus a relatively smaller problem to fix.

Client Does Not Respect Your Team

Regardless of how important any particular client is to your business, it is important that they respect you and your business. A client who does not treat your team with dignity is bound to bring down the morale of your team. This is likely to cost you a lot more in the long run in the form of employee attrition and quality of service delivered. It is hence important to not hire a customer who fails to treat your business with respect.

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