Screening Clients and Managing the Risk of Difficult Clients

All business people face the prospect of dealing with difficult clients during their business life

During the course of their business life, all business people at some time face the prospect of dealing with difficult clients. Whilst much media attention is given to unscrupulous business people who rip off consumers, very little attention is given to businesses that have been disadvantaged by difficult clients who, for a variety of reasons, believe they can take a less than honourable commercial advantage in a business trans-action.

Regrettably, in today’s environment, many people tend to focus their attention on what are their rights rather than necessarily give equal attention to their obligations. Add to this the personality traits of people and a lack of knowledge on their part of industry processes and practices, and suddenly a commercial relationship can become fraught with considerable angst for both parties.

While not a panacea in dealing with the potential issue of difficult clients, spending time on understanding the personality profile and expectations of your client can afford you the opportunity to determine whether or not you should transact with a particular client.

While preliminary screening can be carried out by way of a telephone discussion, ultimately it is the face-to-face meeting that will provide an ability to assess the client profile and particularly their needs and expectations. Superb communications at all times is essential, and that applies before, during and after the transaction has been completed.

It is important to invest quality meeting time with potential clients. It pays dividends irrespective of whether you are dealing with a potentially difficult or a perfectly reasonable client. It is critical that you ascertain what is seen as important in their eyes even if such ‘importance’ is not regarded by you as critical or of a high priority.

Equally, it is critical that you gain an understanding as to what they believe are the benefits and services they are looking for from you. This last point cannot be stressed highly enough. It is the foundation to ensuring there is consensus between both parties.

Gaining an understanding of the client’s expectations regarding the scope of services (deliverables) that are to be provided by you, together with the scale of the project, their budget estimate and their timelines is an essential element in determining whether or not the clients’ expectations are reasonable and realistic.

It is vital to indicate to a client where any expectations regarding the project brief are unrealistic or unachievable. Equally it is dangerous to remain silent about a client’s unrealistic expectations.

If a client is not prepared to acknowledge and agree that the following elements, namely, the project brief, your design fees, the client’s budget and timelines are all inter-related and require to be appropriately balanced, then it is best not to transact with the client. Considered discussion on these elements will provide you with an understanding as to whether or not the client’s expectations are realistic and whether or not the client’s attitude is one of reasonableness generally in understanding the issues that may be confronted during the design phase.

Under no circumstances ever allow yourself to be manoeuvred into a situation where you commit to meeting a client’s budget estimate. If a client demands guarantees regarding time and construction costs, do not proceed to transact with the client, particularly if you have given them a clear understanding of the issues that can arise in the design and construction processes. If a client still demands guarantees irrespective of the advice and knowledge you have given, it demonstrates that they are not prepared to show flexibility in working with you to problem solve the various exigencies that often occur during the design phase.

Given that many clients have had no real experience of the design process or knowledge of the regulatory requirements, it is important that time is spent explaining to the client what is involved which helps them to ascertain whether their expectations are realistic and achievable. The art is ensuring that you strike the right balance between not ‘frightening off’ a potential client, and at the same time ensuring the client is under no misunderstanding or misconceptions about the process and the need for flexibility.

Clients with rigid, entrenched positions regarding their expectations must be seen as potentially creating difficulties for you should any element of the design process not meet their requirements.

Immediately, after such client meetings, you should comprehensively record the nature of the discussion including outcomes and the questions you have asked and the clients’ response to such questions. Such documentation serves the purpose of reminding clients of what had been originally discussed and acknowledged should the need arise, and secondly, should there be a legal dispute, such a record can be used as potential evidence to assist your case.

As a general rule, clients who have been recommended to you through word of mouth by friends or relatives are likely to have a more positive view of the relationship with you, provided that you have taken into account the above criteria.

Clients who may convey a ‘warning signal’ as to whether or not you should treat with them are those who:

  • Have had a negative experience previously with the design sector and the building industry;
  • Convey the impression that they have a jaundiced or suspicious view of the building industry generally;
  • Are knowingly ‘shopping’ around for the lowest fees;
  • Have terminated the services of a building designer in circumstances that might suggest unreasonableness by the client, and are now seeking you to assist them to achieve their objective or to get them out of trouble;
  • Doing a special favour for a relative or a friend, or friend of a friend – surprisingly, this is a very common problem. Mixing business and friendship can be a fraught experience;
  • In dealing with a client in a partner relationship, one partner demonstrates no interest in the project. [Should any difficulties occur in relation to the project, it is noticeable how the passive partner suddenly takes considerable interest in expressing their (usually negative) views];
  • Client indicates they do not have the time to be involved in meetings to discuss design issues and appear to be simply developing excuses to avoid being part of a decision making process and expect you to unilaterally solve all problems;
  • Quibbles or haggling in regard to the quantum of your fees or with the terms and conditions of your engagement agreement.

Again, the above indicators will not always mean that you will end up dealing with a difficult client. However, they do indicate that you should make further enquiries to ensure that you feel completely comfortable with proceeding with such a client.

Be mindful of the many and varied cultural differences in our multi-cultural society. Cultural attitudes towards business transactions and the way differences or disputes are dealt with can vary and should not necessarily be interpreted as meaning that the client is being difficult. Again, superb communications are required to prevent misunderstandings or differences in expectations from arising.

On the issue of signing an engagement agreement, this is an important element when confronted during the course of the project with a difficult client. It is vital that the scope of services be thoroughly detailed together with the parties’ respective rights and obligations.
While it does not mean that the signing of a written agreement prevents the possibility of dealing with a difficult client, it is useful when you can point to a clause in the agreement that determines an issue that may be in contention rather than have a debate about who said what and when, which can often occur when the parties’ relationship commences to deteriorate.

Make sure that your processes for invoicing of fees are as disciplined as possible and made in accordance with your engagement agreement. This, hopefully, will create an impression in the mind of the client that you run a professional organisation and that you comply strictly with the contract conditions for the purpose of running your business operations.

Slowness in payment of outstanding fees by a client should be ‘jumped on’ immediately. Sloppy administration or accounting by you can encourage a potentially ‘difficult’ client to believe they can push the boundary as a result of gaining the impression that you are not competent in your business operations.

Some designers structure their design services into distinct separate stages and only provide a fee estimate for the first stage. Should the client prove to be a difficult client, the designer can then choose not to carry out any further stages of the work once the first stage deliverables have been completed. There are pros and cons to this approach, bearing in mind that the same right is also open to the client as to whether or not they wish to proceed any further with the services of the designer. However, it is an option that enables you to sever the relationship with minimum exposure.

The ability to align with like-minded clients is always going to be difficult to achieve in every business transaction. Despite all your best endeavours at screening a client, the client initially might convey the impression of being a dream client and then suddenly turn into the ‘client from hell’. In such circumstances, all that you can do is act professionally and incisively to resolve the reasons as to why the client has now become so difficult to deal with. If a resolution is not possible, act incisively to protect your interests. And also make sure you always have ‘back up’ by way of a good engagement agreement signed by you and the client.