Good clients are essential to build and maintain a financial advice practice but difficult clients can make an adviser’s life very difficult.
Often, these people require some diplomacy to handle properly to ensure they don’t become a burden on your time and resources.
Yet, as Jim Prigg from Knowledge Master writes, advisers don’t have to hold on to these clients and should be willing to disengage with people who may be better served by another adviser.
Jim outlines a number of typical ‘trouble clients’ advisers may come across and ways to create some separation and make the final break with them.
In the “sale of advice” profession the commentators, critics and media seem to think you, the provider of advice, should operate at a high standard of professionalism, even if it does not make any money, but don’t hold clients and consumers of financial services and advice to the same standard.
In most cases this is not a problem but, sadly, not all clients make the advice process easy, nor profitable, despite your best efforts and instead they cost time, energy and resources to keep on the books.
And while you need clients, you do not need headaches. You do have the right to choose who you want to deal with and what you want from your clients.
Honestly, some clients are so bad for your profitability not to mention your mental health you really have to be able to identify them and disengage with them as quickly as you. You don’t have to put up with or placate people who give you a case of colonic irrigation in your business! Learn how to fire them.
First learn to identify the types of clients from hell. Then establish a simple strategy of getting rid of them. Yes that means saying “NO, I don’t want to deal with you any more or if you want to deal with me these are the ground rules“. Give them a NO with a reason that backs up your decision and releases you from these clients from hell.
Here are some types of clients from hell and the tactics to rid yourself of them.
1. The non-respecter of deadlines
This client wants a platinum service but fails to meet your deadlines to install that type of service. They fail to respond to your requests. They go incommunicado. Agreed upon dates arise and pass. At the risk of appearing “pushy” you begin to demand action. This is still met with a lack of response or at best minimal activity on their behalf. Suddenly the client blames you for not meeting the deadlines agreed upon initially.
Solution: Confirm with the client that you are not able to meet deadlines because they were unable to meet theirs. Instead of setting a concrete date, make your efforts contingent upon receipt of information within a very specific time frame. Don’t accept any future work from this type of client. Tell them you have been swamped by a large amount of work that has high priority deadlines that will see you very busy for some time.
2. The “give me everything first and then I will tell you whether I want to engage you”
This type of client demands everything up front without any guarantee of engagement and hence payment to you. They demand advice or a plan with implementation information and outcomes. There is no certainty that you will get the job. They may be “shopping” you. It could be they are sucking your brains and using your information to help a lower costing competitor. This is like going to tender without any deadlines, costings or agreement to proceed.
Solution: Be absolutely certain of what you want to deliver for the client. Determine the time frames and life of the advice or plan and costing arrangements with a sunset clause. Request the client to tell you their time frames for implementation. Is it by Easter, the end of the tax year or before Christmas? If they cannot resolve the time frame issue request they can come back to you (if they want to) when they have definite deadlines they can meet, according to your work load
3. The client with champagne tastes, but a beer budget
It seems that those who invest the least will expect the most generous terms. Be very wary of the request to do “cheap” work. It may well end up being very expensive for you in extra time, administrative effort and the time lag it takes for you to get paid. Will your profit margins be reduced? Do you want to take on the work that is low yield but high-touch? What extra work, consultative time and effort will you be expected to provide that were not in the initial quote? Low cost work generally takes up more time and earns you less money. If people are only concerned with the lowest cost, bottom line, end result it is hard to get them to understand value for money they need to acquire your expertise and experience.
Solution: Whether by gut feeling or through industry intelligence raise your rates. Pro bono work is OK for good causes. Either they will accept your offer or move on to another supplier. You are not in business to subsidise other people’s life styles.
4. The perennial whinger
In business the ideal scenario is to under promise and over deliver. You can come in under budget within the requested deadline, yet this client from hell is still not satisfied. Perhaps they have not been able to adequately describe what they want or just didn’t know what they specifically required. When the aim doesn’t align with the outcome there is always going to be conflict or misunderstanding. Why should you be the scapegoat?
Solution: Consider having a sign-on payment. No sign-on payment, no work. Create a special checklist that outlines what you agreed to do. Then tick of each item so there can be no doubt you have fulfilled your part of the agreement in the time-frames and budgetary requirements outlined. Politely tell them you have taken on a substantial amount of new work that will be consuming the majority of your time. Mention others (your competition) who may be able to help them out.
5. The loose outline theorist, who keep changing their mind
The project begins without a concrete outcome. The client keeps changing the guidelines. You do work that loses relevance because the goal posts have been moved. The client doesn’t seem to be focussed on a result.
Solution: Can the client clearly articulate what they want? Can they show you an example or a case study of what they want? Is it a tangible or an intangible outcome they are trying to describe? Try and get the client to bring clarity to the project. Instead of saying “to sort out my finances” get them to define it further such as: “Examine my life insurance needs to ensure I am protected and I am getting the right cover for the right price”. Develop a scoping document that clearly defines outcomes. Suspend any work until this document is properly understood and adhered to.
6. The arrogant, argumentative authoritarian
This client makes a habit of threatening you or being unreasonable. They are abusive. Nothing is ever their fault. They can be micro-managers that thrive on nit picking inanities. They threaten you with breach of contract, or making a complaint, or want you to charge less or provide free service to placate their inadequacies.
Solution: The last thing you need is an expansive time-consuming court action. Don’t try to test them to see if they will go legal. Bail out now. Don’t argue. Never argue with idiots. They will bring you down to their level and then they beat you with experience! You need not tell them your real reason for terminating your services. Tell them your business has taken a different turn and you can no longer provide the type of services they require. Get whatever money owed to you that you can and disengage.
This article is reprinted with permission from Jim Prigg CEO and founder of Knowledgemaster Pty Ltd. Knowledgemaster is an online resources company that delivers practical communications, interaction, sales and soft skills tips, tactics, techniques. Learn more about winning business programs and courses by contacting Jim.
Contact Jim Prigg to learn more about winning business programs and courses.