BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

New Research On How To Manage Toxic Clients

Two out of three agency owners, business coaches, consultants, and solopreneurs share with me their biggest pain is finding new right-fit clients. What nobody wants is a toxic client, and they assume toxic clients hurt profitability.

New research about toxic clients proves that assumption. What is a toxic client? Think of the client who regularly verbally harasses you on Zoom calls. The client who always wants to grind you for a discount. The client that is ultra-fussy and demands work be redone.

A toxic client can cost a business an average of $4,994 per year, according to research by Andrey Doichev, founder of Inc and Go, a company that provides business formation services. The research study, which surveyed 1,118 employed Americans, said three out of five employees have quit a job due to not tolerating toxic clients.

In an email exchange, Doichev shared survey results and the following advice for how to manage toxic clients so they don’t harm your business and staff:

Develop Robust Contracts. “Business leaders reported firing clients most frequently when the client had unrealistic expectations and they disrespected leadership’s time,” said Doichev. “This is why developing robust contracts is crucial for any business owner, since it helps to establish the expectations of your working relationship, forming boundaries around your communication standards and expected results. Pay close attention to the contract edits your client requests, since these red flags could point to future points of friction that you’ll want your team to manage proactively.”

Keep A Communications Record. “Try to recap meeting notes and next steps via email after any call with a client, so everyone stays clear about expectations and next steps,” said Doichev. “This also helps create a paper trail and resolves anything that could have been misinterpreted. With 37% of toxic clients complaining about miscommunication with business leaders, it’s no wonder keeping a communications record is the most effective way to handle a difficult client.”

Stay Calm. “It can be easy to feel frustrated when dealing with a difficult client,” says Doichev. “Not letting that frustration show is key! Leading with logic over emotion can help keep the meeting focused and avoid escalating issues further than necessary. A few deep breaths go a long way in helping business leaders re-center and focus on the issue at hand.”

Learning To Say No. “As a leader in any industry, it is important to remember that the client is paying for a service that you are an expert in,” said Doichev. “When a client approaches you and has requests that are unrealistic, requests that will affect the value of your business's overall work, or requests that will affect the results of their success in the long run, as a leader, there is the responsibility to say no. The best way to approach this is by offering a mutual solution or by clarifying your terms of service. Another way to approach saying no is by laying out how your work will be beneficial to their business and what they can expect in the coming weeks. While it can feel like an uncomfortable conversation, it is essential to pave the way for mutually agreeable expectations moving forward. Always defer back to your contracts when necessary.”

Bottom line: Life is too short to tolerate toxic clients. Not all revenue is worth the hassle and the heartburn.

Follow me on Twitter or LinkedInCheck out my website