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How Do You Handle A Business Relationship Gone Wrong?

Pssst…the video includes some very VALUABLE commentary in the captions so you should WATCH it! :)

Uuuggggg, the dreaded bad client encounter…can’t you just erase it from my memory?

If you’ve been in online business for any length of time you may have already experienced the dreaded bad client encounter. Typically, the dreaded bad client encounter manifests itself in one of two ways. First is where you’ve acquired a client who is not your “ideal” client, and second is where you’ve got an ideal client with whom a transaction or project goes terribly wrong.

In either case, it’s never an enjoyable experience. But it comes with the territory.  And if you plan to pursue entrepreneurship it’s important to know how to handle these experiences when they happen to you. And believe me, they will!

Okay, so what do you do when you have a client that turned out to be a bad apple, or the project went awry?
Simple. Be honest.

This may seem like common knowledge, but frankly many people retreat in the face of a dissatisfied, angry, or upset customer. Unfortunately, running from the matter only makes your already angry customer angrier. So, the first thing you need to do is up the ante and put the issue on the table with your client WITH a potential solution.

Problem-Solvers Win Every Time

In coming to your client with the issue at hand, make sure you also have a solution. And if you don’t have solutions, at least have an idea of what your next steps need to be. Just dumping a problem on a client without a solution is going to cause your client to panic, and it won’t help your business relationship. Be ready to approach your client with options that will bring about resolution.

Kick Your Excuses, Ego, and Sense of Entitlement to the Curb

When you plan to talk with your client about the issue you’re facing remember that you need to work towards a common purpose…a solution. This means that you need to facilitate a meeting of the minds. In other words, you need to get on the same page. Admit that you’re in the wrong, if you are, and sincerely apologize. Then seek to reconcile whatever inconvenience the client incurred.

Learn From it, and Let it Go

This was the hardest part of dealing with client difficulties for me. I’m very critical of myself and expect excellence in all I do, so when I had my first client difficulty it HAUNTED me for months! I was very bothered by the fact that things hadn’t turned out as I had expected, and was unable to establish a strong working relationship with this client. The truth was I wasn’t able to serve that client the way they wanted to be served. We weren’t a good fit. They were not my ideal client. Looking back now, I understand the importance of qualifying clients before you start working with them to avoid this type of outcome. Unfortunately, at the time I took it personally. But, I would have been much better served to let it go and move forward from the experience instead of beat myself up over it.

How This Has Worked for Me IRL (In Real Life)

I want to give you a specific example so that you can see exactly how this process has played out for me, and to my advantage.  I worked with a client in my healthcare marketing business who wanted to do some traditional advertising, and we had to work with a local printer. The local printer ran into trouble and was unable to deliver the products as promised. If you want the full story, watch the video, but ultimately I ended up issuing the client a refund plus additional money for the inconvenience they incurred.

When I discussed my decision with colleagues, many thought that giving a refund above 100% was insane! Nevertheless, for many reasons I believed (and still do) in taking a radical approach to serving my customers. As it turns out, it was a very wise move. Not only do I still do business with this client, but they are one of the biggest referrers to my business.  I made back the additional refund tenfold.

A Note about Working with the Wrong Client for Your Business

Sometimes you will have the pleasure of acquiring a client that is not fit for your business, especially when you first start your business. It’s important to recognize that when you are dealing with someone who is not an ideal client you should seriously consider removing the person (or business) from your client base. When you can’t serve someone as they desire to be served through your business everyone is better off severing the working relationship. This can be challenging, particularly when you’re anxious to bring money through the door. Ironically, the sooner you identify and start working with your ideal clients, the sooner you’ll start making the money you seek.

So, let me ask you. How do you deal with bad client encounters? Do you have a plan in place for handling client situations that go wrong? I’d love to hear about it in the comments below and if you have any additional advice you would like to share with us please leave that as well. And don’t forget Kick-A$$ Tips comes out the first week of every month, so make sure you sign up.

Thank you for watching, and I look forward to talking to you again very soon.

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40 Responses to “How Do You Handle A Business Relationship Gone Wrong?”

  1. Lukas June 4, 2013 at 11:40 pm #

    Baking soda and lemon if not used too often is very very good.

    To be safe I would use that method only twice a month tough.
    Recommended by a the dentist!

  2. Michelle @ DELHI CA March 25, 2011 at 3:46 am #

    Great tips! And I’m glad things are working out with the client. By the way, I don’t see a video. It could be just me though.

    • Keep It Real! March 25, 2011 at 1:50 pm #

      Thanks Michelle. Welcome to Metamorphoself!
      I’m going to have to figure out what the heck is going on with the videos.

  3. Christina Crowe March 22, 2011 at 6:56 pm #

    Well, for some reason the video is working in Chrome but not in Firefox for me. But don’t worry yourself too much about it if it’s working in both browsers for you. It might just be a Firefox plugin conflicting with something on Firefox – it’s happened before, heh.

    • Keep It Real! March 22, 2011 at 9:54 pm #

      Yeah that’s weird. It’s working fine for me. Thanks for the heads up though!

  4. Christina Crowe March 22, 2011 at 6:27 pm #

    Hey Marlee,

    OK. So you have a health care marketing business, work for a fitness company, AND blog on two (as far as I know) separate blogs? o.O

    That’s insane! How on earth can you do it all? Are you running three different businesses? It would be interesting to see your day-to-day lifestyle in a post (**hint hint). :)

    Great tips! And I’m glad things are working out with the client. By the way, I don’t see a video. It could be just me though.


    • Keep It Real! March 22, 2011 at 9:52 pm #

      I’m not sure what’s up with the video, but I will look into it.

      Nevertheless, you are too kind. I will have to do a day in the life when I actually have the time to think about it! LOL.
      It’s really about saying “no” to all things unnecessary. It’s not always easy, but I try!

      So nice to see you here Christina!

  5. Melanie Kissell @SoloMompreneur March 20, 2011 at 6:43 pm #

    Beautiful message and thank you, Marlee!

    As a gal who’s worked in the offline world for about four decades now, please believe me … there’s no escaping difficult people and biz transactions gone wrong. Maybe in a perfect world (you know, the one none of us live in). :)

    You can’t please all of the people all of the time. Not even remotely possible. Your tips and advice for ‘how’ to handle problems with clients or customers are top notch!

    Nicely done!

    • Keep It Real! March 21, 2011 at 1:47 pm #

      What a great point Melanie!

      “You can’t please all of the people all of the time.”

      This can be very difficult for some people to accept. Especially if they are perfectionist, but if you’re putting your best foot forward some times you just have to take a “win some, lose some” point of view.

      Thank you for adding that!

  6. Riley Harrison March 19, 2011 at 11:27 am #

    Agree with everything you said. I’ve always thought that if you can establish a really good relationship with client BEFORE any unpleasant surprises, it makes the process less unpleasant and easier to resolve.


    • Keep It Real! March 21, 2011 at 1:50 pm #

      Hi Riley!
      Welcome to Metamorphoself and thank you for your comment!
      You are certainly correct in striving to establish a good rapport with clients BEFORE disaster strikes. When your clients like and trust you, they accept difficult news much more easily. Thank you for visiting!

      P.S. Your detailed goal setting posts are incredible. Keep up the great work!

  7. Pat March 19, 2011 at 9:36 am #

    HI Marlee,
    Great advice!! Having a contract is the MOST important part of everything you pointed out because that is where you outline your client/service provider relationship. I have been guilty of not producing a contract and from there everything becomes crazy..

    ooh and also working with clients who are not your ideal client is an absolute no no :)
    Love all your advice girly!

    • Keep It Real! March 21, 2011 at 1:52 pm #

      Precious Pat!
      It’s so nice to see your face here again! Thanks for the words of encouragement.
      You are so right about working without contracts – it is so easy to do, but very painful in the long run.
      Thanks for visiting!

      P.S. Your new site design kicks-a$$! Love it!

  8. Danny @ Firepole Marketing March 18, 2011 at 9:49 pm #

    Very insightful, Marlee. Anyone who’s been in business long enough will have had this experience, and the hardest step is to take that first step. This was articulated so well by Julien Smith in his last post: http://inoveryourhead.net/just-send-the-goddamn-email/

    • Keep It Real! March 19, 2011 at 9:29 am #

      You’re right Danny the first step is the hardest.

      Julien has a way of putting things matter-of-factly. Thanks for sharing the link, it’s a good post.

      Thanks for your comment!

  9. john Falchetto March 18, 2011 at 5:01 am #

    Hi Marlee
    I love the video and you inspired me to do more.

    Your example of giving more than 100% back to a client is something that many larger companies should understand. It is not really about money, more about the expectations and raising to the challenge.

    Some of my toughest and demanding clients have actually become my best and most loyal. It is amazing how if we come down to a position where our ego isn’t involved we can really connect and understand others.

    Thanks for this great post and I look forward to read and watch more of your great posts.

    • Keep It Real! March 19, 2011 at 9:08 am #

      Hiya John!
      Thank you for visiting Metamorphoself and welcome!

      I’m glad I could inspire you to do more. I’ve found that extraordinary effort is a rarity in the business world (especially online).
      If you’re looking for a differentiating factor that is an easy one, although not always easy to do, it’s easy to capitalize on.

      Looking forward to seeing you here more!

  10. Frank March 17, 2011 at 7:10 pm #


    Great video and even better content. I have worked in customer service my entire working life and the thing that sets any business apart from it competitors is the way they treat their clients. So when issues arise it is important like you said to have a plan to handle when these things happen and they will happen.

    Here’s what works for me.
    1. Identify the issue.
    2. Apologize for the inconvenience.
    3. Take ownership in finding a solutions.
    3. Be honest with your response and set clear expectations on what to expect going forward.
    4. Kill emotions and base your solution on facts.
    5. Provide a win/win scenario if possible.
    6. If all else fails learn karate. :-) (it’s rough out here) lol!

    I would say more but I need to fix some broken relationships I have created by doing things the wrong way. :-) Great post.

    • Keep It Real! March 19, 2011 at 9:04 am #

      I love number 6! LOL.

      You basically summarized my video in 5 simple steps! Thank you! Great process you’ve got there.

  11. Jon March 16, 2011 at 10:52 pm #


    You add a little more every time I visit. There’s value in the article, value in the video, and thought-provoking (or humorous) text in the vids. I like it! More please.

    Things. will. go. wrong. It happens. We aren’t perfect nor are our clients. I’ve had some that I swear, if I was God I couldn’t do right in their eyes. That’s just people being people. But you’re right, we need to know how we’re going to handle situations like that when they, inevitably, arise.

    Also agreed: no cover-ups and trying to fix issues on the DL! Be open. Be upfront. They’ll appreciate you being candid and I really like that you advise to lead with a solution right off the bat. That’s strong.

    “Hold on tightly, let go lightly.” Great little saying that has so many great universal uses.


    • Keep It Real! March 19, 2011 at 8:52 am #

      Hiya Jon!
      Thanks for the positive words of encouragement. They are much appreciated.

      You are so right about some clients. That was something I experienced that killed me on a personal level because I work so hard to make sure my clients are genuinely happy and wowed. So as you can imagine when nothing I did was good enough, I found it incredibly frustrating. The truth was…as I’ve said a trillion times through out the comments…they were not my ideal client.

      I’ve never heard that saying “Hold on tightly, let go lightly.” Very powerful to apply in many instances. Thanks for always adding to the convo Jon.

  12. Tisha March 16, 2011 at 6:01 pm #

    You are so right when it comes to honesty being the best policy. I learned this the hard way. In one of my previous attempts at entrepreneurship, I bought into the whole “fake it ’til you make it” concept and when a project that I had taken on for a client began to fall apart because my “team” didn’t deliver on time, I immediately went into panic mode instead of being honest with the client. I decided to take on all the work myself, and of course, without the help of a capable team, the work took much longer than expected and quite frankly, ended up not being as good as it could have. She wound up asking for a discount on the price because of the extra time taken, which I happily gave her. But I didn’t get anymore work from her and I know now that had I just been honest with her and either a) referred her to someone who could have done the job more effectively in a timely manner or b) told her about the issues with my team and let her know up-front that the time-estimate would be a little longer than expected. That kind of honest, open dialogue may have cost me the client’s immediate business, but it would have displayed an integrity that might have allowed me to continue a relationship with her and perhaps get future business and referrals.

    • Keep It Real! March 19, 2011 at 8:42 am #

      Hi Tisha!

      Thanks for sharing your story. It goes to show that learning to be honest the hard way is tough pill to swallow, which doesn’t have to be that bad. The beauty is that you learned from the experience and learn more about the areas you needed clarity on. When we are new entrepreneurs we are sometimes so eager to have work, to have a client, and make money that we forget about the big picture.

      Great seeing you here again!

  13. Bojan March 16, 2011 at 3:51 pm #

    I apply the 80/20 rule. If a client is not contributing to me, I poltely refuse him and his money.

    There are things that money can’t buy… And that’s decency and well behavior.

    • Keep It Real! March 19, 2011 at 8:38 am #

      You are wise Bojan. I always encourage business owners to severe bad relationships soon then later.
      Welcome to Metamorphoself and thank you for your comment!

  14. Mitchell Allen March 16, 2011 at 3:10 pm #

    Marlee, I’m going to tackle this from a different angle, because not too many entrepreneurs will admit this: if your path is strewn with the carcasses of bad clients, you may have to look in the mirror to find the cause.

    I was a horrible website designer. I was like that pie maker in the E-Myth book. I could make a pretty design and I let someone talk me into doing it for money.

    My biggest mistake was not enforcing my own rule which, in essence, was to never build a site without a marketing plan. Instead of declining clients who were too cheap to pay for my total marketing plan, I figured I would build the websites and let them see for themselves that they also needed my marketing services.

    Naturally, the clients got no traffic and blamed me (they were right, but for the wrong reasons.) Unfortunately for them, my contracts were ironclad – I had segregated the services such that no refunds were forthcoming.

    How could I sleep at night, right? Eventually, I could no longer sustain such as slipshod business and shuttered it. Before doing that, I was a textbook example of every single one of your “Don’t Do That”s – I took complaints personally, I didn’t come back with solutions and I most certainly felt entitled to my fees.

    Ugh, indeed.

    As you know from the e-course, I reformed myself. First, by finding the right business, I minimized the number of bad client encounters. As a free-lance programmer, I only had to issue two refunds. Of the two, only the first one was a nightmare client. The second was simply a situation where I wasn’t able to meet his expectations and owned up to it.

    I will certainly keep your lessons in mind, even though I’ve Metamorphosed Myself from freelancer to software provider. As you say, you can’t please everyone, so I better have a plan! LOL



    • Jk Allen March 16, 2011 at 11:25 pm #

      Hey Mitch…

      Quick props on keeping it real!

      “The second was simply a situation where I wasn’t able to meet his expectations and owned up to it.”

      I love that – who’s perfect?!?

      • Keep It Real! March 19, 2011 at 8:53 am #

        Woot woot for realness!

    • Sarah Russell March 17, 2011 at 9:42 am #

      I have to agree with Mitch on this – at least some of the bad business relationships I’ve stumbled into have come about because I haven’t been totally honest with myself with regards to my own strengths and weaknesses.

      I dabbled for awhile with webmaster consulting – ie, doing little website maintentance tasks for other site owners. My hourly rate was reasonable, but the problem was that I wasn’t experienced enough to know how long a project would really take.

      I’d get a project request, estimate 4 hours of time and have the project take 8, which left me frustrated with the client for sending me too much work (yeah, clearly some misplaced anger there… :) ). Or I wouldn’t fully understand the scope of the work I’d been hired to do and have to spend several additional hours of research time getting up to speed. Not ideal :(

      Because of this, I don’t do much of this work anymore, although I’m gradually getting better at estimating costs and sticking with my pricing for the projects I do take on.

      Honestly, I think that might be the hardest part for me – not just recognizing when a project or relationship is going wrong, but actually sticking to my guns about killing it instead of trying to just work through it!

      • Keep It Real! March 19, 2011 at 9:03 am #

        Lovely Sarah!
        Great to see you again. Props on your nod over at Smart Passive Income Blog by the way!

        I love what you said here: “I think that might be the hardest part for me – not just recognizing when a project or relationship is going wrong, but actually sticking to my guns about killing it instead of trying to just work through it!” This is SO important to iron out early in your entrepreneurial journey. Learning to stick to your guns will enable you to grow much more quickly than always compromising (when it’s to your detriment).

        You also bring up an important point about estimating and pricing. It’s definitely more of an art than it is a science, but locking yourself in to a specific number of hours at a specific rate is always a loser. You will ultimately end up doing more for less and feeling really frustrated about it. There are a number of ways to offer services that can prevent this, but I think I’ll save that juicy content for another post. Thanks for the idea!

    • Keep It Real! March 19, 2011 at 8:37 am #

      LOL, Mitch!

      You are awesome. Thanks for giving us a great example of the principles in play here. But, you shed some light on a very important factor, which is “know thyself.”
      You knew what you were capable of and what you wanted to do, but for other reasons went against that. Therein lies the conflict. It starts with you. Thankfully, you
      were wise enough to recognize that.

      This is a great comment, you’re a great writer. Love your insight.

    • Tia March 20, 2011 at 3:05 am #

      I agree with this. In the case I added below, this was one of the issues. In the beginning, I insisted that she hire a designer before I developed the site. She insisted that it would be “easy” for me to do because she liked my own site.

      Um, negative. Did not work out well! :)

      This is something I’ve run into a lot of times with small business owners. Design is like an after thought when it comes to planning & paying for it, but we all know that it is almost 100% responsible for their ultimate happiness or dismay.

  15. Jk Allen March 16, 2011 at 2:47 pm #

    Marlee, this happens to be an area that I live in (well, sort of). At work, I get brought in to repair and strengthen relationships. Typically, this is after a large client request to terminate services (which will typically cost the client in the high 5-figure range due to contractual factors, but we stand to lose in the high 6-figure range or higher).

    One thing for sure is that the approach must be strategic. I’m speaking from corporate space…where I have to battle with snobb’ish legal counsel (no offense) and upper management (directors and VPs) on pretty large accounts. I mention this because it’s key to assess your environment for it will dictate your how you handle relationships gone wrong.

    I know you’re tired of the word transparency…but I think being honest is a great tool to strengthen relationships. It shows that you’re an advocate for them, rather against them. This gives you the ability to under promise and under deliver.

    In a previous job, dealing with upset clients was the norm. I used to give my employees the following advice about not taking “it” personally:
    –If you take “whatever” personally and you didn’t do it, then you’re going to get defensive. If you get defensive, then you’ll surely offend the client, making matters worse.
    –If you take it personally, then you can’t focus on the solution because your mind is clouded by the wrong thing.

    I think it’s very situational on how to handle business relationships gone wrong. I haven’t dealt with it on an online business level, but I can only imagine that there has to be at least some similarity in approach.

    My biggest points of advice…
    Don’t internalize it! Be honest! Over delivery! AND APOLOGIZE!

    I love the videos. It’s nice getting the extra flavor from a real human voice and expressions…you can only get so much from text – ya know. So thank you!

    Again, just my 2 pennies!

    • Keep It Real! March 19, 2011 at 8:11 am #

      Snobb’ish legal counsel?!?!!? I’m aghast at the thought of such legal types. ;p

      You advice is excellent JK. Understanding the dynamics of the working relationship and environment is key to making sure things don’t get off track. I especially like this: “–If you take it personally, then you can’t focus on the solution because your mind is clouded by the wrong thing. ”

      Ego can be very detrimental to problem solving. Sometimes you just need to get out of your own way – naw mean?
      There is definitely a similarity in the approach you’ve suggested here and that of online business, but there is one BIG differentiating factor. That is, MORE often than not, you never get face-to-face (unless via video chat) with you client. This can make clear communication very difficult. People easily misinterpret text, tone, and intention when it’s not backed up by body language.

      This is what makes the solutions part of the process so important. By having immediate solutions at hand you’re already demonstrating your intent to make right whatever went wrong.

      Thanks for your insight JK!

    • Tia March 20, 2011 at 3:08 am #

      Gotta admit that apologizing when I’m not in the wrong is difficult. Thank God I don’t work in sales or customer service for a living. I could not handle that! I’m sure I would get fired.

  16. Tia March 16, 2011 at 2:35 pm #

    Hi Marlee – When I was freelancing, I had a client and I personally feel the business relationship went wrong. To start with, we were not ideal business partners (I consider the client/provider relationship a partnership).

    One of the reasons it went wrong was that I did not want to take on the project. Because we had worked together in the past, I told her outright that I didn’t want to take it on, but questions turned to consultations, and then suddenly I found myself doing the project.

    (Train speeding up, headed towards a wreck).

    We didn’t have a contract in place. This was one of the major issues. And it was truly a project that needed a contract. I have a specific hourly rate, but then I price out non-recurring projects at a different rate. I no longer operate that way at all, since all of my work is based on retainer, but that’s how I did it then.

    (Official wreck)

    What should have taken one month took 3 months, and required many more hours than necessary, and ended up costing way more than it could have. She didn’t know what she wanted, and even though I feel I did my best to get her there, I should have been very clear that this was not the best way to approach the project.

    My takeaway from that project was to never start working without a contract. It happens more easily than you would think as a consultant when you are also someone’s friend but ultimately one or both of you will wind up feeling gypped. In our case, I think both of us did.

    • Keep It Real! March 19, 2011 at 8:33 am #

      LOL! I love the train wreck analogy.

      You know Tia…that is the thing I hear the most often. “I wasn’t working with an ideal client.” This is why I stress the importance of figuring that out asap. The other thing is when you do projects you don’t really want to do. That is a one two combo that is a take down every time!

      And…working without a contract is VERY dangerous. When things go wrong you have to have a neutral place to point to. Working with human beings always leaves room for uncertainty, so having a mutual agreement in writing becomes vital to staying within the confines of a mutual understanding. Working with friends is also a sticky place, and with your defenses down, it’s even more important to have a contract in effect so that you don’t have to turn into a bad guy.

      Thanks for sharing your experience with us. You’ve shed some light that all of us can learn from!

  17. dustin March 16, 2011 at 10:59 am #

    I actually talked to an irate customer (account wasn’t assigned to me) yesterday. The best I could do was be gracious and understanding, and let him know that his situation was valid. I know his beef wasn’t with me, but I was the person he was talking to … so I wanted to make sure he felt like he mattered and was being heard.

    (I think we got it all squared away… :))

    • Keep It Real! March 19, 2011 at 8:14 am #

      You’re right on point with that thought Dustin.

      Letting your customer know they are understood and heard is a HUGE part of keeping things copacetic. One thing I’ve found is that people often don’t realize they are bad listeners, and in a conflict situation they feel the need to keep explaining and talking. Your example goes to show that sometimes listening is all that you need to bring the situation to a manageable level.

      Thanks for your comment Dustin!

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