BBB Business Tip: How to vet potential customers

It’s important to vet future clients – especially for business-to-business or service-based companies. Before you sign a contract with a new client, be sure their expectations, budget, and goals align with yours. If you skip this step, you could take on clients that cause unnecessary stress, can’t pay on time, or even damage your business reputation.

How to vet potential clients 

• Define your ideal client. This will depend on your type of business. For B2B companies, do you want to serve a particular industry or size of business? For creative businesses, such as architecture or design, do you want clients who have a certain design aesthetic?  Knowing your ideal client will make it easier to market to them. 
  
  
• Understand your client’s goals. Get clear on what your client hopes to achieve. Ask them about their goals and the outcomes they expect you to deliver. If they expect something you can’t deliver, think twice before moving forward. Another problem is when clients are unsure exactly what they want or need. This can lead to unrealistic or unfulfilled expectations, leading to stress and possibly a dissatisfied customer. Before signing a contract with a potential client, get crystal clear on this point.
  
  
• Do plenty of research. Besides talking to a potential client in person or via video chat, get to know them and/or their business through online research. Delve into public information that reveals their track record. Look at their clients' feedback, reviews, and complaints, all of which can reveal behavioral patterns. Explore their company website and social media to get a feel for their values and ideals, and note whether they align with your own.
  
  
• Be upfront about pricing. Ask for your client’s budget upfront, and be clear about your prices. This will help you filter out any clients that can’t afford your service and avoid wasting time on meetings or business proposals that aren’t going to go anywhere.
  
  
• Watch out for red flags. Red flags you want to avoid include clients who immediately ask for discounts, complain about other providers, have unrealistic expectations about communicating with you (i.e., they want to be able to call you 24/7 or need too many meetings), or someone who asks you to do extra work for free. In addition, if the client has multiple complaints lodged against them online for poor customer service or other issues, know that this reflects how they’ll treat you too.
  
  
• Ask questions. Besides inquiring about their budget, ask potential clients plenty of questions. What is their timeline? What do they expect from you as far as communication? What, specifically, would make the project a success for them? Don’t forget to tailor questions to your industry. You can also use them to indicate additional services you offer. The more questions you ask, the easier it will be to see if your potential client is a good fit – someone you’ll enjoy working for and can truly benefit from your services.
  
  
• Respectfully decline clients who aren’t a good fit. Even if you don’t have many clients or are just starting, it’s still important to turn away clients who are a poor fit for your business. By doing so, you’ll avoid stressful work that doesn’t pay enough to be worthwhile and unflattering reviews or negative feedback. Of course, you’ll want to decline clients respectfully. Try to find other vendors in your area who would better fit the client. You’ll build your reputation amongst customers and fellow vendors by giving referrals.
  
  
• Review your vetting process regularly. Once you have a solid vetting process, review it occasionally and make any necessary adjustments. Make your process is tailored to your industry and then document it. Documenting the process is wise, especially if you work with a team of employees. This will help everyone keep clear in mind who you can best serve to make a success of your business.

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