Nightmare on start-up street: Dealing with customers from hell

Richard Burne, founder of PR and marketing business Max&You, has the ultimate nightmare client story.

When a friend first introduced him to his client, little did he know he would end up taking the client to court, a process that would end in liquidation of the client’s business.

“The business was a start-up with grand plans. We did a load of work on the basis of a verbal personal guarantee and the promise of a deposit of a third of the value of the job before the launch event we were organising,” explains Burne.

“We were happy with that and went ahead and did the work. But the money wasn’t paid. The client said they needed a few more weeks to pay. That went on for a year, with us constantly chasing the money and with no indication there was any issue with the work we did,” he says.

Eventually the client got his lawyer involved, at which point he said he wasn’t happy with the work Max&You did. Burne says the quality of the work he did was more than adequate.

“The launch event was a raging success. We had 1,500 people show up and all the major players in the industry were there, including lots of media. Plus we provided content for the web site.”

When the case eventually went to court, Burne could prove he performed the work that was agreed because he had a signed contract that detailed what Max&You had said it would do for the client.

Don’t be afraid to get legal advice

But now he would always have a lawyer review any contract signed between him and a client and also ensure he had a written personal guarantee from a client that was also a start-up.

The debt was referred to credit bureau Dun & Bradstreet for collection, which eventually commenced winding up proceedings against the client. Burne says if he had his time again he would have gone down this path much sooner than he did.

“When you’re going legal you need to choose your battles and make sure it’s a business decision, not an emotional one, and that you have full documentation to support your case,” he advises.

Jo Ucukalo is the CEO of Handle My Complaint, which assists businesses to avoid and resolve complaints. She says there are a number of different steps start-ups can take to deal with complaining and nightmare customers.

“Complaint resolution is a skill that can be learnt and developed with practise. What’s more, every complaint presents an opportunity for business improvement,” she says.

To reduce the risk of nightmare customers impacting the business, Ucukalo advises start-ups to recruit staff for their customer service skills, train staff how to handle complaints and empower staff to resolve disputes.

She also says practising active listening, acknowledging the complainant’s emotions and taking responsibility if the business is at fault are other ways to reduce the risk of nightmare customers destabilising the enterprise.

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