5 Red Flags When Qualifying New Clients
If you’ve been in business for any length of time, chances are you've dealt with a bad client. When we look back on these experiences, the red flags seem so obvious in retrospect. We ask, “How could I have missed the signs?” and promise ourselves that we’ll act differently if a similar situation arises. Of course, hindsight is 20/20. And while we exercise caution in these familiar pitfalls, it’s easy to get caught off guard when a new situation presents itself. Experience is the greatest teacher; but wouldn't it be nice to have a list of red flags so you know what behaviors, client requests, and personalities to watch out for when qualifying new clients?
Think of this article as a shortcut for experience—a lens that lets you see red flags in HD color. If you prefer to hear the audio version where Madeline and I discuss additional red flags in further depth, then check out Episode 1 of the Creative Friction podcast. Once you recognize these red flags, you can be honest with yourself about potential deal breakers. In some instances, you may compromise on a deal breaker; but at least you are being mindful about your decision.
Watch out for these 5 red flags when qualifying new clients.
RED FLAG #1: Commitment phobia
A client’s fear of commitment will show up in various ways, including:
Working with numerous agencies in the past and never being content.
Sharing stories of all the ways former agencies disappointed them in the past.
A desire for consistent project work, even though a long-term agreement would be more advantageous for both parties.
How to deal with commitment phobia
Ask plenty of questions about what went wrong with the client’s past agency relationships so you can make an informed decision about whether to move forward. In this conversation, you are probing to determine whether they are capable of investing time, money, and resources to support a mutually-beneficial relationship.
RED FLAG #2: Unrealistic expectations.
Unrealistic expectations are easy to spot, mainly because they often border on the absurd. You'll find yourself tapping a colleague on the shoulder and saying, "Guess what Client X just asked for?" These are the red flags you may notice, but often look past.
Everything must be done ASAP, e.g., “I’d love to have the website/logo/brand/etc. done by next month.” This isn’t a crazy request if they're willing to increase budget for a rush job.
Champagne taste on a beer budget. They want to achieve something a competitor did, but pay a fraction of the marketing spend to do it.
Not sharing enough information. Useful information is kept close to the vest, and you feel like you need to be a mind reader to get anywhere with the client.
How to deal with unrealistic expectations
It's good practice to start client relationships with a road mapping or discovery session, which allows you to get a clear understanding of desired outcomes.
RED FLAG #3: They want to negotiate fees.
Oftentimes, clients don't have a set price in mind for fees. But oddly enough, they take on the persona of a car buyer and simply want to negotiate you down to a lower price.
RFP requests are notorious for this bad behavior. The client will reach out to you somewhere around the final round, and ask for your best and final offer. This is code for “give me a better rate.” It's a red flag, considering you've already given them your fees in writing. This is a client who will want to push you toward charging by the hour.
The client might use the classic line: "You'll be able to get a lot of exposure working on this project." This one used to get me early in my career. For anyone that has struggled with impostor syndrome, getting exposure sounds logical because you feel as though the work will validate you for future opportunities. In reality, this is just a slick way to not pay your requested fees.
“Let’s just start the project, I’ll get accounting to send out the payment.” You've heard this one before. They are not blatantly negotiating fees, but they are being loose with your payment schedule.
“We’re working with a limited budget and can’t afford to pay that much right now." This sounds like someone who cannot afford to work with you. We often make exceptions, even when this language is a clear red flag.
How to deal with someone who wants to negotiate fees
There might be some legit options when a client wants to negotiate fees. You can remove an outcome from the scope of work, complete the work in phases, or extend the timeframe for the work to be done. But remember: if a client lowers your fees, they have impacted your profitability. Whenever a client negotiates your fees down, just know that means your work will be less profitable.
RED FLAG #4: They don't follow your process.
You have built a process that increases the likelihood of successful outcomes—and a client comes along who wants to alter your method. They essentially want to manage the relationship instead of going through your process.
This behavior is the sign of someone who will micromanage the relationship.
Not following your process is a sign that they do not fully respect your expertise, thinking that they can do it better.
How to deal with someone who won't follow your process
Plenty of agencies fall into this trap because they don't have a simple process to move clients through. When clients don't see a clear process—where they move from Point A to Point B—then they attempt to fill the void. The first check is to make sure your process is simple to follow. The second check is to articulate the benefits of going through your process, and explain why deviating could affect expected outcomes.
RED FLAG #5: Scarcity mindset.
This red flag is more about you than it is your client. A scarcity mindset is the belief that there is not enough to go around, or that money is perpetually scarce.
You take on clients who wave red flags or just aren't a good fit, simply because you worry there isn't another prospect on the horizon.
You lower prices in your proposals and rationalize it by saying things like, “That just seems like too much.”
You keep pump faking on hiring that one employee with all the agency experience, thinking they might be turned off that you don't have it all together.
How to deal with a scarcity mindset
This mindset will lead you to focusing on low prices, undervaluing your services, and looking the other way when folks are late with invoices. We want to shift from scarcity to an abundance mindset. This is about being confident in your services and your abilities. One way to start is by holding firm on your prices. You should get paid what you are worth for all the risk you take managing a creative business. As another approach, you can go into client discussions thinking, “What's the worst that could happen?” They're either going to say yes or no. You might as well put on a brave face and be confident that your approach is the best one to help them reach their objective.
Key Takeaway
To clarify, I’m not arguing that you should automatically turn and run the other way when you see these red flags waving in the distance. You must make those decisions based on your current, unique circumstances. For instance, you may know a client will micromanage you on a project. But if you need the cash injection into your agency, that is your call to make. As you begin qualifying potential clients, I hope you keep these red flags in mind to identify possible challenges moving forward.