If you are in business, you will meet them. Clients from hell are destructive forces and your business is more often than not better off without them.
The most common types of clients from hell are:
REPUTATION HEX WITCHES Who they are: Those are clients who can damage your image, your reputation. How to recognize them: Do you have dealings with any companies or individuals which you prefer to keep a low profile? Maybe you would have a hard time explaining what is the nature of your relationship with them. Maybe they are not bad, but their reputation on environmental standards, ethical standards or other issues does not harmonizes with yours. How they attack: Witches place hex hags in your business which bring a great deal of bad luck to you. Their attacks are silent and potentially deadly, often materializing years after the bags are placed. One day you wake up and your company’s name is plastered all over the news, right next to that of a former client you did not even remember existed and your stock price is in free fall.
DISTRACTION MONSTERS Who they are: Those are the clients who do not add to your mission or strategy. How to recognize them: Do you have clients who have nothing to do with what your company wants to become? You may think that they are harmless because they are paying the bills, but something deep inside tells you that they send the wrong message. Maybe their feedback is trumping your product development team, discouraging innovation or taking the necessary steps in the right direction. How they attack: These Monsters do not really attack you. They are more insidious, slowing you down and imposing all sorts of demands to your business. Then one day you realize that your company’s culture stifles innovation and you are not going anywhere fast.
VALUES VAMPIRES Who they are: Those are the clients who hurt your values. How to recognize them: Do you have clients that press your company against its values? Maybe your company takes pride in delivering real impact but some of its clients are happy to just buy reports that end up on some shelf. How they attack: Vampires drain the blood of your people, along with their souls. Your employees than start dying, quitting or turning undead. They lose faith in your values, your company culture deteriorates and you lose your edge in attracting and developing talent.
RISKY ZOMBIES Who they are: Those are clients who create too much risk. How to recognize them: Do you have clients who just seem to stretch you more than it is prudent? Like poor credit borrowers or a client who would hire your company for a project which, should it go wrong, can break your company, serving these clients basically means betting the ranch. Some risks are a one-time event but some clients may repeatedly expose you to them. How they attack: You live your life normally – pay your bills, take your kids to school and go to work. Then, one day, you wake up and it is Zombie Apocalypse. The housing market collapses. Your company goes under, or not. But even if it survives, life will never be the same.
UNPROFITABLE SKELETONS Who they are: Those are clients who just cost too much to serve. How to recognize them: Maybe in other circumstances, with another strategy and another scale, these guys could be your friends. But as things are, they are just dragging your profitability down. Some unprofitable skeletons are not obvious, though – because most companies lack a detailed lifetime customer value and activity based costs. Thus I often see groups of clients who take an amount of the time from sales and customer support not commensurate with their contribution to the business. How they attack: Unprofitable clients drag your margins down and consume valuable resources from more profitable activities. They will probably not starve you to death – just leave you anemic.
COMPETITIVENESS GHOSTS Who they are: Those are clients who make us less competitive. How to recognize them: Do you have clients who reinforces your company’s bad habits or consume the resources which should be invested in making you more competitive? Maybe it is one large client that makes you complacent or a group of clients who provides you with projects that add nothing for your experience or credentials. How they attack: Competitiveness Ghosts are not dissimilar from Distraction Monsters – they are silent and insidious. Ghosts have the power of draining your lifeforce, speeding up the aging your company and killing its entrepreneurial youth.
EVIL DEMONS Who they are: Those are clients who are unethical or involved in criminal activities. How to recognize them: Even though some demons reveal themselves for what they are after being summoned on a crossroad, most will just show up as regular business partners and clients. Those are the possession case and are particularly dangerous – and only caught with proper due diligence. How they attack: Eventually evil demons come to collect your soul. But, before that, they may put you in increasingly questionable situations and erode your internal integrity.
HURTING WEREWOLVES Who they are: Those are clients who hurt our personnel. How to recognize them: Most of the time, the hurt is psychological. Do you have clients who demoralize your salesforce, cause more hasle than they are worth or keep your office’s stress level cranked up. How they attack: these monsters also deteriorate your talent – and the stress they induce destroys creativity and risk taking.
So what can you do?
Your options and the appropriate course of action will depend on your situation and the type of monster you confront. You may:
Refuse to do business with them. In most cases, you have the option of simply refusing to do business with them, or ceasing to proactively seeking them. Unless the refusal configures discrimination, this is the easiest and most straightforward path out of hell.
Transfer them to other companies. Not a good idea if the client is involved in illegal activities, but definitely an option for most other types. What does not work for you may be an excellent fit for someone else and you can make a commission or earn brownie points with all parties involved.
Change them back into human. In some cases, it is possible to change them or change how you deal with them. In some cases, this may be as simple as changing the account manager or some client-facing processes.
Raise prices. Akin to refusing, raising prices may be naturally weed out some relationships and move others back to profitability. But just like refusing, you should be careful not with being discriminatory.
Sunset offerings. If one specific product or service is prone to attracting clients from hell, maybe it is time you consider sunsetting or changing it. There are many levers at the product management level you can play with.
Let me know your thoughts:
What are your general thoughts on this? What is your favorite monster? What is your experience with clients from hell?
How did you deal with them? What were the results?