Have your ever had the customer from Hell?  

I think we all have.  Your know the one who hires you to do the project and then throws up hurdles and road blocks every step of the way.  This is even way before it is time to get paid.  You just know that the outcome is not going to be good!

There are so many time that we get so wrapped up trying to get the project we seem to miss all the “Red Flags” that this customer is going to bad news for your company.

When you are negotiating with a customer for a new contract how do you know whether this new customer is going to be a good customer that you can work with in a fair and reasonable basis or one that is just a pain in the ass and one that you are going to regret ever getting tangled up with.

The contracting process in its simplest form is quite simple, The Customer has work that then want and need to get done, you provide a service and materials that does what the customer needs to have done, you negotiate a price that you both can agree on, you do the work based on the scope of work to be provided and you then want and need to be paid.

That seems simple enough doesn’t it?

Not always!  Sometimes the customer doesn’t want to hold up their end of the arrangement and decides to jerk you around for one reason or another and doesn’t want to pay up.

The harder you are pressed for work and need to sign the deal.  The more likely you can be to overlook all the red flags and warning signs that you are negotiating with a bad dude that is no good and a customer you are better off not having.

The question is “How do you know”?   Before you sign your next contract  just subtly score your prospective customer using the following “Customer Evaluator” to see how they rate and a customer.

Traits of a bad customer:

1. The prospect is in constant negotiation mode, even right up to the time they are supose to sign your contract .  You can usually tell if the customer will cause you problems during and after the project if they are a continuous negotiator.  The price will never be cheat enough and you can rest assured that they will take another kid at the can during and even right at the end of the project.
2. The prospective customer has a quick and hot temper and a volatile, aggressive  personality or demeanor.   They use this behavior to manipulate, degrade or to gain the upper hand in their negotiations with you.  It is a certainty that every construction project will have its own hitches, glitches and surprises.  There will be issues that have to be discussed, modified and adjusted.  If you sense that your prospect isn’t going to be able to deal with these hurdles without getting into a screaming match you don’t want them.   In this case the one that screams the loudest is not the winner.
3. The prospect has a reputation of bad pay, slow pay or worse yet a reputation of not paying at all.
4. If the prospect has had projects done in the past he has a history of changing contractors on every project.  Worst yet he bad mouths the past contractors even though you can clearly see that the workmanship looks great to you.

5. 10 things you don’t want to hear from your prospective customer during the pre-contract meetings:

   1. The workmanship and everything else has to be “Perfect” before I will pay.
   2. There are not going to be any change orders on this job no matter what.
   3. Prospect wants to pay for the work directly, no banker or title company.
   4. Prospect says that “Money is no object.  This just has to be done right”.
   5. Prospect says “I want to bring in some of my own subs but I want you to supervise them”.
   6. Prospect wants to handle the final negotiations with the subs.
   7. Prospect doesn’t know what they want.  They don’t want to give you much information.  They want you to just bring them 3-4 ideas so that the prospect can review them and tell if they like your proposals or not.
   8. Prospect doesn’t have a budget and doesn’t want to disclose their budget for the project to you.
   9. Prospect tells you not to worry about all the final details.  He says “we will just work those out as we go.
   10. The prospect has unrealistic expectations about what the project costs or how long it will take and isn’t flexible about these.
   11. Prospect is only concerned with the bottom line number and tries to drive your price down to meet the competition without showing you their scope of work to compare scope and quality.  

Actually that was 11 you got a bonus trait!

Every time you are talking to a new prospect for a construction project be alert and watch out for these warning signs.  If you prospect exhibits any of these traits of a bad customer you need to determine if this potential customer is worth having.

If you do decide to pursue them you should adjust the price for your work accordingly.

Apply the MEAL factor to raise your prices.

• M  ore stress than normal
• E  xtra time spent on the project
• A  ggravation increase
• L  ost opportunities

The higher the point factor for each letter, the higher your price needs to be.

In today’s challenging climate it is hard to walk away from work but I can tell you from experience if you don’t go into a project with your eyes wide open you could be crying the blues before the project is over.