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Three Warning Signs Of Bad Customers

How Building Service Contractors Can Spot Good Clients



 

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In an industry where margins are often thin, building service contractors cannot afford to take on and keep the wrong types of clients. Bad customers suck the time, energy and profits right out of your organization. 

So how can you avoid landing these sorts of clients? What warning signs should you be looking for in the sales process to notify you of trouble? Let me offer three.

1. Price Only Bid: When you encounter a prospect who is only concerned with price, red flags should be raised. These types of customers will not only beat you up on the front end to get your price low, but they will typically not tolerate service issues. 

Since these clients view your company as a commodity, they figure they can easily switch to another low-cost provider if things get tough with you. This creates a downward spiral of working hard to keep the customer, squeezing profit margins and mounting pressure on you. 

If you find a price-only prospect that doesn’t care about a long-term partnership, be on guard.

2. Switching Contractors Frequently: The next red flag to watch for is a prospect who switches vendors frequently. While this may be a symptom of a price-only mentality, it may signal a customer who is difficult to deal with. 

Customers that change vendors frequently don’t value the cleaning company as a partner, but rather as a lowly supplier. They don’t value your people or your work, but view themselves as having the upper hand and willing to use it at all times. 

These customers aren’t looking for partner vendors, so they probably aren’t a good fit for you. When a customer refuses to see you as a partner, your likelihood of success is small. Don’t expend too much energy with these types of customers when others are waiting for a quality company like you. 

3. In The Wrong Market Segment Or Geography: Finally, we can often be lured into bidding on jobs that just don’t make sense for our company. Perhaps the customer is in a geography that is a bit far or maybe they are a type of building that is difficult to service. For instance, if you are used to servicing commercial office and medical facilities in the evening, it can be tough to take on an early morning retail location. 

Prospects should always be an operational fit for your management team. When you select a customer that is a bad fit, you end up spending energy on the bad fit while your core customers suffer. This is a lose-lose situation.

I completely understand that turning down business is hard, especially when you are eager to grow. But it pays to be patient and put all your energy into the right customers. Define what the ideal prospect looks like, then say no to everything else. Remember, the riches are in the niches. 

Jordan Tong is a BSC consultant and founder of Elite Business Coaching, in addition to being a third-generation owner of Frantz Building Services based in Owensboro, Kentucky. For more information on his coaching services, visit www.elitebusinesscoaching.net.

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