After a rather demanding few weeks I thought I would deviate from general writing topics and focus more on the business side of things for this week’s topic. Since I started Diane Mannion Writing Services seven years ago I have had the pleasure of working with some great clients and the vast majority have given me no problems whatsoever. However, most of us come across situations when we have to deal with difficult customers.
Having worked in credit management for 14 years prior to becoming a writer, I can instinctively spot whether a customer is going to give me problems. Thankfully it’s a rare occurrence but we all get awkward customers from time to time. However, there are certain steps you can take to protect yourself, and your business. Here are a few tips that might help:
- Don’t be frightened of turning away business. If you think there’s a chance that you won’t get paid or the profit margins will be too low, just say no. You’re not obliged to take on any business you’re not comfortable with. I was in two minds about a client recently. His manner on the phone was quite unpleasant and I got a bad vibe from him. Unfortunately, I was tempted by the possibility of future business but I definitely regretted my decision to accept his business.
- Get everything in writing. Provide a written quotation for every job and get the client’s written agreement to the quotation. If you provide a service, agree the client’s requirements in writing so that he understands exactly what is being included. Keep this written agreement as you might need it if a conflict arises in the future.
- Agree payment terms at the outset; the client does not set the payment terms, you do. Occasionally you may want to fall in with a large company’s policy of paying once a month, for example, if it’s the only way to gain their business. However, they cannot demand extended credit terms as a right. If you only accept payment terms of 7 days, for instance, then it is important to get your customer’s written agreement to this at the outset from someone in authority. You will have to think about how important this is to you and balance the volume of business against the need to maintain a healthy cash flow. If you can’t afford to wait 30 days (or sometimes more) for payment then you may decide that this business isn’t worth your while.
- Don’t be frightened of taking sanctions. If a client refuses to pay and you know that the money is due, there may be steps that you can take aside from going to court. For example, could you withhold further orders? N.B. this will only work if the client cannot obtain the same type of goods or quality of service elsewhere. Would negative publicity (about refusal to pay) be harmful to the client, or reporting him or her to a professional or regulatory body if the client’s business is linked to one?
- Stay firm but polite. There are a few customers that try bullying tactics. They will make unfounded claims about poor goods or services to deliberately avoid payment. Don’t let them intimidate you. If you know that you have performed the particular service to the required standard, or sold goods at the required standard, then be prepared to counter their claims. You shouldn’t be expected to work for free.
- Taking legal action. It’s not always necessary to go to court but if all attempts to collect outstanding money or settle a dispute have failed then you may have to consider taking legal action. Before you do so, you must send a formal letter notifying the customer of your intention to take legal action. This is known as a ‘letter before action’ and you can find out more about how to do it here. Often this will be sufficient to prompt the customer into making payment. However, if this doesn’t do the trick then you may have to take things a step further. Even if you decide to take legal action, it still isn’t always necessary to attend court. There is a procedure known as the Small Claims Court which makes it easier, more convenient and less intimidating to settle claims under £10,000. You can find out more about it here. If you are considering taking legal action it is important to document everything as this will help to back up your claim. This is where the items referred to in points 2 and 3 will come in useful. Even if you don’t reach the legal stage I have found it useful in the past to be able to point out to clients exactly what they agreed and when, especially when I have something in writing to prove it.
I hope that this information helps you in your business dealings and would love to hear about any experiences you have had with difficult customers. Please don’t mention anyone by name though as I wouldn’t want to find myself being taken to court for libel – haha!