NFIB

Sizing Up Client Relationships
06/ 30/ 2003

by Vicki Gerson

Client relationships play a crucial role in the success of your small business. You worked hard at forming these relationships and while most strengthen over the years, others can deteriorate, either quickly or over time. There are various reasons that client relationships crumble, and you can miss the early signs of destructive business relationships.

Take into consideration the following when assessing your client relationship:

Trust your gut feeling.

If you hesitate at the thought of doing business with clients when you first meet them, you should probably not form relationships with them. The consequences of ignoring your intuition and instincts when sizing up clients can be catastrophic, as you can end up doing business with someone who is, at the very least, unpleasant.

If you find that you have misjudged a client, it is best to end the relationship as quickly as possible, before they argue with you, or worse, refuse to pay. Doing business with unethical or irrational individuals will likely provide you and your small business with more stress and headaches than they are worth. However, many bad relationships are created when you fail to clearly define expectations.

Define the relationship early.

Before you enter into an agreement with a client, you need to clearly define the business relationship, focusing on the relationship's timetable, goods and services traded, financial aspects and responsible parties. No matter what kind of business you own, spell out for your clients what you will do for them and what you expect them to do for you. Problems occur when the client thinks you should be doing more than you planned or vice versa.

Address concerns openly.

If you always avoid confrontation and conflict, you are setting yourself up for awkward client relationships. Your desire not to communicate your concerns openly occurs because you have not set boundaries with this client and have not defined the relationship.

Some common causes of unhealthy client relationships might be: late payments, unreasonable client expectations and blatant disrespect for you and your employees.

If you fear a client relationship is in trouble, have a meeting to openly express you concerns. It may be uncomfortable to sit down with the client and discuss your differences, but to let the problems fester will only result in a relationship that will end badly. A meeting will be the best way to determine if your problems are the result of simple misunderstandings or if serious work will be needed to save the relationship.

Consider ending the relationship.

As a last resort you may need to consider ending a client relationship. Before you do, ask yourself: Do I simply have a personality clash with my client? Maybe you should ask someone else on your staff to service the account. When you introduce them, emphasize your client's positive traits and be careful not to bring your own history to the table. If others have the same difficulties, which eventually eat into your profits, it's time to re-evaluate the account.

Small Business Sound Off
Does this story hit home?  Share your story with us