We’ve all been there. Hell, I’m there right now.
There’s a customer that I’m talking to, but something just doesn’t feel right. They interrupt me; they call websites and social “a load of old nonsense” and they continually make references to how much this is costing them.
The problem is that our fundamental business desire to receive revenue and get paid often overrides our common sense to work with high value, better customers.
“As long as they pay me, it can’t go that wrong can it? As long as they follow my process, and with Agency Mavericks at my back, I can handle anything.”
That’s what you’re telling yourself. But how can you balance that feeling in your gut that the customer is going to be hard work – versus the need to pay the bills?
The single largest factor of unhappy and challenging customers vs. revenue and getting paid is confidence. To most people, it would seem like only an extremely confident or extremely crazy person could turn down a client.
I mean, who on earth would turn down income and revenue just because they can? Surely every potential customer is a valuable asset?
The truth is that when you build your confidence, you’ll be able to turn down demanding customers. Often the reason we’re not confident at turning people down is because we tell ourselves that we should be lucky that someone is even considering using us.
We're duped into believing that the customer is always right and that it's a buyers market.
“Well there are hundreds of designers and developers out there, so I can always choose someone else”.
While that is true, they can always choose someone else; you need to show them that there are very few people who can do what you do.
You might not feel confident in your abilities, but I can 100% guarantee you that you're a better designer and developer than the customer. I can also promise you that you're a better designer and developer than me.
If you're bullied early on into believing that you don't have the skills to design or develop a website, what chance do you have that you can handle future difficulties?
Another common area of contention is price. “Why should I pay you $$$ to do it when my nephew can do it for $?”
Often questions like that force us to lower our price to remain competitive. We end up chasing the income and cash without taking into consideration the cost of the customer.
Difficult customers often use price as a lever to control how you do business with them. Difficult customers know that finding customers is hard, and they're willing to exploit you.
Don't fall for the old, “oh I'm too poor to afford anything else”. Ask yourself, if the price was better, would you still work with them? I bet you wouldn't. So why are you working with them for less money?
Sure, you need to have the confidence to turn down low-value budgets, but I can assure you that it's far more powerful, rewarding and productive to turn down low budget customers because you know their price isn't adequate. Speaking of low-value customers…
You're going to have to accept that some people just aren't going to be good clients. I've had multinational businesses with $1.5 million a month revenues act like total idiots – difficult to work with, quick to blame and anger. I've also had lower budget customers who have been a delight to work with.
Some people just aren't going to get it, and that's usually down to two things – their ignorance and their own ego.
More often than not, businesses that are quick to put down your skills and haggle you on price are doing so because they aren't confident in their business.
I once turned down a potential customer who ran a urinal business (and people say digital marketing isn't glamorous) because I wouldn't do a website for a share of the profits. His business was projected to turn over £3 million in 1 year with £750 000 in profit.
He argued that I obviously don't believe in my website abilities to bring in profit. I argued that he didn’t believe in his own numbers enough to invest £6500 in a new website.
So how DO I manage bad customers vs. getting paid?
Okay, so I might not be the best person to ask this in hindsight. I'll move heaven and earth to work with a customer that meets me half way. But I've been stung too many times to invest in low-value customers. I trust my gut.
However, there are ways to manage and mitigate the impact of bad gut feeling customers vs. getting paid.
I've found that splitting the cost of a site over a year has worked in favour for both parties. Occasionally, if I sense a customer might be hard work (sometimes this is because they're over-cautious, not intentionally difficult), I've set up a recurring payment structure for their website.
We agree on a fee per month and on what will get done in that month. There have been a few clauses such as “missing a payment may result in your website being pulled” and “we'll only ever work on a site with a months payment in advance” added to the agreement.
I structured it so that paying more upfront sounded more appealing – that a website might not be completed for six months, however, if they wanted, they could pay 50% of the total upfront and pay a monthly fee after that.
I've also made sure that maintenance, hosting, security, backups, and ‘just one more thing' changes are included as an additional monthly fee after the project is paid for in full.
Flipping monthly costs on its head. You need to figure out how much the customer is costing you. Customers cost you time that you're not working on your business. You might have to subscribe to a new hosting package or plugin repository.
Is this customer going to be profitable per month?
Life-time value or LTV is the total value of the customer for the period that they buy from you. For example, my LTV to Reece's Pieces is probably in the hundreds of thousands of pounds.
However, it's not just measured in revenue. Time, expectations and positive feedback are valuable assets to a customer relationship.
If you can mark down what you think the LTV will be for the client, compared to where other clients are, you'll get a better indication of whether this is a project that you want to invest in.
Agency Mavericks uses a smart client scorecard system that lets you check off the important aspects of a potential customer. This is so you can measure what they're really worth to you.
Contract of Expectations
Managing expectations in 99% of customer relationships. Set in very clear, very specific terms what you're going to help them do.
First, this is much like a stern voice and pointing down to a puppy. When you talk about managing expectations, you're setting the groundwork for letting them see you as an authority.
The best thing? Managing expectations requires NO confident acts or proof of authority because doing it is in itself an act of authority.
Here's an example…
A lead that you're talking to says that they want their website to be just like Apple (I have no idea why people love that site so much, but customers like it). After a bit of deep diving, going wide and deep and asking “why?”, we discover it's because they have similar customer markets.
Often what they mean is that they want the same public reactions that Apple gets through their own website. If Apple has a website like that, I'll get the same results as Apple.
That needs to be handled and nipped in the bud. Explain that Apple spends MILLIONS OF DOLLARS a month on promotion, development and design. They can absolutely get a website that is similar in design, but without a LOT of investment, they won't get the same results.
What I then do is write down specifically what their goals are. I'll ask them, “would you be happy if we reached these goals?” The answer is of course, “yes”.
Finally, we might sometimes find out that a customer is hard to manage further into the project. You'll get emails, calls, Facebook messages and tweets from one customer asking for 100 little changes.
First, try to stay away from making ANY changes like this, but that's another story.
Right before the project starts. Talk to the client about setting up a regular call. Once a week where you can update them and they can send over questions and request changes. Talk to customers and let them know that they can't just request changes via emails whenever they want.
Think hard about the type of customer you want to reach. You're always going to need to manage customers, relationships and expectations. But sometimes you have to make compromises with the income it brings.
Seriously analyze if the income that one customer brings in is worth it, as it can end up costing you more money just to manage their time and emails. And nobody wants that!