What to do when dealing with a client bully - lessons we learned as a startup business
It’s the blog post we never wanted to write…and one you probably hoped you’d never have to read.
We Survived (and So Can You!): What to Do When Dealing with Client Bullying
Sometimes, despite your good work and best intentions, the worst can still happen: encountering a client bully. There are dozens of ways business relationships can go awry. In our case, we’d done everything by the book—fulfilled our contract terms, completed all agreed-to services—and yet, when final payment was due, our client decided they no longer wanted to pay. How fun!
We learned the hard way that bullies aren’t just on the playground—they sometimes pop up in professional settings, too. But with that nightmare scenario now in our rearview mirror, we’re able to look back on the lessons and share them with you. We’re here to support fellow small business owners and we want you to be prepared for when you need to stand up to your own client bully. We’re sending you good vibes that you never have to use these tips!
So, what exactly happened?
After 16 months of providing services, this particular client decided they weren't going to pay their 3 outstanding invoices. As a small business, we get that sometimes cash flow is limited. We've been there. In this instance being that we do what we do, we knew their business wasn’t struggling. In fact, they had a healthy cash flow. For over a year, we’d provided exemplary service, fulfilled the terms of our contract. We'd even completed the transition of all reporting and processes to their internal team as planned. Up until their out-of-the-blue decision, they’d expressed their gratitude for the support the Boon team provided.
Then one morning, our main contact at this client reached out for a 'quick call.' At that time, she let us know that their CEO had put a halt on all outstanding invoices from contractors. Our contact provided just one solution—that we offer a discount on already completed services. If we were unwilling to give a discount, no other payment option would be considered by their team. These invoices were already overdue, meaning wages had been paid out. Lack of payment meant Boon would suffer a significant revenue loss.
What were the ripple effects?
There were a ton of ripple effects!
Fortunately, since forecasting is our thing, we’d made space for a little financial cushion and this unfortunate situation didn’t do as much damage as it could have without our careful scenario planning.
As a startup, not getting paid 3 months worth of contract fees, after having already delivered the work, had a huge impact and puts undo stress across operations as the business waits for revenue from other clients who DO uphold their contract agreement so that there’s budgeted cash flow again.
Luckily for the Boon team, we’d planned for a safety net, so it didn’t cause a fatal business issue or require extreme recourse, but it certainly was not absorbed without impact. Our CEO’s own paycheck, as well as plans to reward team members with incentives were all affected.
Were there warning signs?
Oddly, no! And that’s the thing, sometimes you cross all of your T’s and dot all of your I’s, and still, the worst happens! It doesn’t mean that you’re a failure, or an idiot. It speaks more to the other party than to you—even if you can’t take that comfort to the bank.
When did they become a client bully?
Once we were notified about the client’s intent not to pay, what followed was a downward spiral of bad communication and professional bullying. Since we are sales planners, we were in the unique position of knowing the client wasn’t dealing with a limited cash flow. In fact, they were worth millions! Their withholding payment felt incredibly calculated as our team was professional enough to provide great service, but small enough to not have endless resources for legal recourse. Plus, the amount that the client defaulted on was right on the limit to where it didn’t make sense to litigate without taking a loss, even if we were able to recoup our original costs.
How were things resolved?
We attempted to communicate about a solution with the team for weeks, but our emails went unanswered. After navigating the situation as best we could on our own, we made the decision to retain a lawyer. We finally decided to seek advice that might help us receive payment. Actually trying to recoup fees for services that were rendered aligned more with our values than simply letting the client bully win.
With legal support now onboard, we finally received a response from the client, who proposed a meeting. They offered to connect us with a new contact from their team. Someone we’d barely worked with. This contact again offered the option to pay for our services, but at a 30% discount. This steep discount on fairly priced work that had already been conducted would deteriorate any profit margin for the team, directly affecting paychecks and incentives. While this wasn’t the ideal solution, it was an improvement from no payment and no communication.
We’re so grateful for the legal advice we received - and even learned that Mary applied the help so skillfully the lawyer thinks of her as a dream client!
We hope you don’t have to experience something like this yourself, but you CAN survive it. We’re cheering for you!
How did you know to push back?
This is a complicated equation—pushing back can be pricey: can you bear the potential financial costs? Are you prepared for how it might alter the perception of the client’s business, as well as your own? While pursuing the issue might soothe your ego, it might not ultimately be worth the price.
We can’t answer the question for your specific situation, but, when faced with the decision ourselves, we were willing to invest in a lawyer to help us counter the client. The amount due from this particular client was at just the right threshold to discourage full legal recourse had we needed to go further. Legal advice seemed our best option.
How can I keep a client bully from affecting my business?
Sometimes you can do everything right, but a client bully still sneaks through. To help prevent the worst from coming to pass there are some practices we recommend. They can help limit your exposure and protect your team as well as your business:
Ask for payment upfront: If you’re concerned about payment (or just want to safeguard yourself more fully), consider asking for a 50% down payment upfront, with the other 50% paid upon completion.
Consider payment timing: Many businesses invoice at the end of the month after a service has been performed, but transitioning to a start-of-month timeframe might serve your P&L better.
Don’t skimp on due diligence: Ensure all of your documents are up to par to get ahead of any oddities.
Maintain your connections: Don’t be a stranger to those who’ve supported your business in the past. You never know when you might need their support again, or when you can pay their support back! While it was unfortunate that we needed to seek legal support for this particular client, that contact has been a great resource. Though we hope not to require their services in the future!
Have a safety net: Keep some money in your reserves for the unforeseeable, so that your business isn’t at risk from one lousy client.
Know that it’s not you: Yes, your client can be a bully. And other bullies exist in the workplace too! You can do everything right to protect yourself, but you can’t always forecast every potential problem. It’s not you, it’s them! Pick yourself up, dust yourself off and take action that enables you to hold your head high.
Finally, keep going!
What goes around comes around, and Boon plans to keep putting out into the universe the things that we want to see. We hope sharing our story helps encourage those who might be feeling down after having a negative experience. Know that one bad client doesn’t define you or have to be the end of your journey.
