Thursday, June 13, 2024
Business File

Identifying and managing difficult clients

By John Corban

They change their mind repeatedly, they remove parts of the quote, leaving the potential project fragmented, which you know will end in an average result. They show disappointment with work done, they question variations and refuse to pay invoices. Remember that last time you had to deal with a painful client?

So, how can you identify such a client in the first couple of meetings, before it’s too late? And if early identification doesn’t happen, how do you manage a potentially difficult client so that you don’t lose your mind and your profit?

Qualifying process

Take the time to qualify every client properly. It is worth taking extra time over the phone initially, to understand if they fit into your best, or second-best client/job profile. Ask them many questions so you get a better idea of how this prospect communicates what they expect and what they intend to spend. If you know a prospect isn’t right for you at the end of the first on-site meeting, trust your gut feeling, thank them for contacting you, and let them know that their project wouldn’t suit your business. Save yourself from the potential pain!

What are the warning signs of a potentially difficult client?

When you design a garden there are many opportunities to identify and understand each client’s behaviour and communication patterns. If they change their mind many times, if they seem erratic or unfocused, if cost becomes a big concern given the budget discussed and the design provided, if they are extra slow paying your invoice or if they claim they didn’t say they wanted some things included in your design, then these are warning signs. All of these indicators can give you vital information about how hard they may be to deal with later on when you start the install. If the design process is tiring and frustrating, then use this feeling as an indication that perhaps continuing the interaction beyond the design process will not be a great idea.

If construction rather than design is the service you provide, the same warning signs apply when you meet initially to present the construction quote. Be aware of any warning signs that make you think, ‘I am not getting a good feeling about dealing with this client.’

Managing a potentially difficult client

The key to minimising problems with clients is being clear in your communication. Keep them informed regularly of progress, and progress payments. Be thorough with your processes and documentation, and stand your ground when needed.

Promising a quote time-frame

Before you leave after the first meeting repeat the key points of the meeting. Mention to the client that you will present the quote within a certain time frame. Make this time frame realistic based on how busy you currently are. Don’t promise a quote within two weeks, if most quotes take you six weeks to create and present.

Presenting the quote, payment schedule and contract

Take time going over all the elements of the quote, and the terms and conditions, so the client understands them prior to signing the contract.

Note: Ensure you have an ‘Increase prices clause’ in your contract that allows you to re-quote a project prior to commencement and get confirmation.

When it’s time to get the contract signed, don’t rush through it. Instead, take time discussing the important elements, especially your payment schedule. Ensure the client understands when you will ask for payment and what system you use.

1. It is a percentage of the quote billed on a timeline as the job progresses?
2. Do you bill at the end of each week based on a Do and Charge basis?
3. Will you bill according to the scope of works completed?
This area can cause many issues, so clients need to understand how you bill, and what they can expect to see or not see completed in their garden when a bill arrives. Just be clear about your system, so they are too.

A client refusing to pay an invoice

If a client refuses to pay an invoice, phone them and discuss the issue. If you resolve the issue and it works for both of you, that’s fine. If they are not following what was originally agreed, then make a stand and refuse to continue construction unless they make the agreed payment. If you continue the installation process without payment, the client will realise they can manipulate proceedings for the duration of the job.

Variations quote agreement

Another issue that often arises is a contractor gets a verbal agreement for variations, and later a client refuses to pay the invoice because they claim they didn’t agree to the changes. Always get a signed written or email agreement to variations to the quote, so you have a copy of their approval.

Reduce the last payment

When you set the payment schedule, reduce the last payment to 2% or less of the contract sum. Clients are often slow to pay the last payment as defects may take weeks/months until they are rectified, and variation invoices could also be outstanding, so reducing the last payment will reduce your cash flow pressure.

If your documentation and execution is thorough, and clients realise you are knowledgeable, communicate clearly and regularly to explain all documentation, what they can expect, job progress, when payments are due and what YOUR boundaries and expectations are, then the difficulties with clients can be minimised or removed.

Note: This article is aimed at assisting Designers and Landscape Construction Contractors. I will write a similar article for owners of Maintenance businesses in my next article.

John Corban
Business Coach for Landscapers,

Horticulturists and Nursery owners
Mob: 0433 271 980

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