Spotting Red Flags With Clients

By Greg Hausheer

If you're a freelancer, you've probably lost business for obvious reasons over the past 1-2 months because of COVID. But if you're experienced, you have strategies in place for when work dries up during moments like these.

You can lower your rates if you lost a project on price. You can take on work outside of your niche. But what about working with difficult people? Should you start a client project with a healthy budget but with a person you get bad vibes from?

I'm here to tell you absolutely not.

Even during a pandemic where you lose half your clients and those still working with you ask to defer invoices, you should not work with people when your gut says something is off.

I try to be wise enough to know there is an exception to every rule in life. After seven years of freelancing and building an agency, the one place I have not found an exception is here. This essay is all about those red flags. It’s about what you might encounter as you negotiate and work with these clients, and how to protect yourself from bad situations.

It's a good thing to set expectations with clients up front for all engagements, and especially for those who can be tricky to work with. But consider how much pain you'd avoid if you simply did not work with the bad ones.

I want to help freelancers avoid getting stuck. And if they can’t get out of a bad situation, then I want to help them work towards a positive outcome. Here are the red flags I've noticed most.

1. When a client promises future work in exchange for discounted rates.

This is the most common red flag a client may show. They ask for a lower rate in exchange for continued future work. They may also promise to refer you business from others too. While selling you this idea, they talk about how deep their network is, and ask you to think about the long-term and big picture relationship between you two. You get the idea. You've met this client before.

There's a difference between this behavior and general negotiation, like when a client buys in bulk. If a client wants to increase a 4 week contract to a 10 week one, you should definitely offer a small discount to close the sale now. Time kills all deals. But if the client only signs a 4 week contract and asks for discounted rates in exchange for the possibility of future work, you should say no.

It's signaling of some deeper insecurity. Maybe the client wants to feel in control of the negotiation or feels entitled to get a deal.

I actually think it's OK if a client asks for a discount politely, offers a fair number, and a reason why they'd like it. You should already be pricing your work higher than your actual required rates to factor in for this kind of negotiation.

The problem happens when the client never actually follows through after you give the discount. Either they don't have more work for you or never made any introductions. You're now stuck with discounted rates and resentment towards the client, and feel awkward having a conversation about it. What should you do?

Actually have that conversation with the client.

Ask directly, and in writing, about the future work they promised to refer or the continued work. It takes a huge amount of courage to have that talk if you’re an introvert like me. It feels confrontational, but it’s not. It’s a promise that person made, and you have every right to call on it. The best time to have this conversation is before you even begin work. If you do give a discount, ask the client for 2-3 referrals before signing.


2. Saying how honest, fair, or good of a person they are and repeating this throughout the negotiating process.

Any client has the right to tell you they're honest, fair, and a good person to work with, but only once.

It's even better when they say "I believe I'm being fair" or "I believe I'm an honest person" because they're stating an opinion, not asserting a fact. But after mentioning it once the topic is mute. Those values need to be proven through actions, references, and due diligence.

It drives me crazy to hear this repetition, and it signals a low EQ. So why do some psychopaths keep repeating themselves? It's Gaslighting 101. They're either fully aware of it and doing it on purpose, or have subconsciously convinced themselves into believing it and can't escape their own reality. The more you say something to be true the more perceived to be true it is. How do you manage?

Ask them about a time they were fair and honest.

Like the last red flag, it can make for an awkward conversation. But stop and think how awkward it is that the client repeats to you how good and fair they are. Don’t be afraid to put them on the spot. I've done this before and seen people struggle to come up with a real example. Not because they are not fair, but because they didn't think I'd ask. And if that’s too confrontational for you, find ways to less directly test their BS meter. Ask for references you can call. It may make you feel like you're reducing a conversation between adults to a prove it moment, but that's the whole point. Can they? Ideally their actions should do all the talking.

3. Not answering direct questions you ask.

When responding to emails, it's easy to miss a question if buried deep in a paragraph. Often a question is not really formed as a question, but as a hypothetical or a declarative sentence instead.

It's natural to have some context slip in an email exchange. But it's hard to ignore a question in an email when the email is only one sentence, and only one question. And it's revealing when a one sentence email receives paragraphs of a response, or no response at all.

Ask your client directly about any doubts you have before starting a project. Be polite of course - your intent is not to be accusatory or aggressive. Some examples could be:

- We haven't discussed payment terms yet - is 15 day net terms OK with you?

- Do you plan on sending payment by wire or mail?

- You mention referring new business in the future for more favorable pricing now - how do you plan to do this and who will you introduce me to?

People who answer these questions directly and honestly are the ones you want to work with. Those who don't or do so indirectly should be treated with caution.

4. An inability to acknowledge uncertainty.

I once worked with a client who no matter what question we asked about his company’s funding situation or ability to pay invoices, he always had an answer.

Sometimes that answer was accurate, thoughtful, and sufficient. But the majority of times it was a vague plan and a veil of confidence. He was always late on his invoices. Why couldn't he say "I don't know" or even better "I don't know, but I'll get back to you?"

I'm the type of person who wants to feel in control of my life. When I can't control my schedule or an outcome of a situation, I get anxious. I've accepted this to be my personality and have found ways to manage it. I'm OK saying I don't know to a lot of things. But it hurts me to see other people who are so confident that they can't admit something is not fully in their control.

Working with these people is challenging because rather than giving a truthful answer, they'll spin their response to suit whatever they think you want to hear. It will hurt you, and it eventually hurts them.

It’s a red flag when a client is unable to admit that there’s more uncertainty in their plan than they perceive.

5. Having canned answers that deflect responsibility.

If you're a freelance engineer, you have likely heard a client say "We'll I'm not technical so I can't take responsibility here."

It’s one thing if an owner of a tech-enabled business says this as you build their website. It’s another thing if a venture backed SaaS CEO says this about their web application you’re writing.

Founders technical or not who don’t take responsibility for, or even interest, in all aspects of their business have the highest chances of failure.

I’m not saying that we should all bow and worship engineers. Rather, I’m just shocked at how many founders choose deliberate ignorance about a business critical subject because it’s outside their comfort zone. This is why I think the best VC’s bet on people, not ideas. No matter how hard an idea may be, the best VC’s know that the best founders will own all aspects of it. They take on full responsibility.

It’s true that the last thing you want to do is probably the first thing you should do. The last thing you want responsibility for is probably the first thing you should accept. The opposite, and not without truth, is that all founders are busy. Extending this to freelancing, so are your clients. And they’re hiring you to help them with a task they don’t have experience with. You're supposed to be the expert.

Know the difference when a person is deflecting responsibility vs delegating or deferring it.

6. Thinking zero sum, and that all interactions are transactions. 

Have you ever taken an introductory call with a client and it thought something was off? Was the client standoffish, or unusually brief in describing what they needed? From their perspective you may be the 5th person they’ve spoken with. They want to make a decision. They’ve heard the same pitches and seen the same proposals. They’re confused by the difference in prices received and impatient having to repeat themselves.

You might be walking into a nightmare.

To win this project you need to anticipate what they need with little help from them, write a better proposal, come in at a lower price, and start work sooner than others. But sometimes this is how the client acts naturally, and it’s not their 5th scoping call but their 1st. They’re genuinely just not that polite or helpful. They expect you to read minds, and will finish your sentences halfway with the wrong answer.

When a client is so quick to not even allow you to finish your sentences on the first call, it’s a bad sign. Another tell similar to this that's revealing: when they give your introduction for you. Sometimes this is excitement or eagerness, and you can tell if that’s true with body language, tone, and reputation. But it's mostly a signal of impatience. They're hurrying you through what you'd like to say, so they can talk more about their problem.

If you're already working with a client like this, the best way to fix the situation (like most others) is to move communication to writing. You can't be "cut off" in writing, even if you can still be ignored.

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A healthy relationship with your clients can transform your business. I’ve been working with some for over 6 years. And it takes just one bad client to make you feel like you never want to freelance again. Don't give in to the outliers of this business. I think happiness in freelancing is not so much about finding great clients. Rather, it's about avoiding bad ones.


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