Treating a customer as if they are always right is not necessarily good business practice.  Many professions like attorneys, accountants, and medical personnel have found this to be true.

Expertise
To begin with, you should be the expert in your field.  You and your staff have studied the field for years through education and experience.  You should be aware of the current laws and regulations and practice ethically in the community. 

Then there is the client that comes up with a concept that you feel is inappropriate for their business model, or could cause some problems that will be difficult to resolve.  Yet that client is insistent that they are right.

If what they want is illegal, you have no other choice but to flatly refuse and explain why.  Quote chapter and verse, show them the citation.  You cannot risk your own career.

On the other hand, if what the client wants is legal but not a good business move, allowing them to convince you to initiate or maintain that business move could be highly detrimental.  If you want to keep the client, but still feel what they want to do is poor judgement, you may want to implement a policy of putting those actions in writing and having the client sign.  That way when disaster strikes, you will feel justified.  It will also protect you against disgruntled clients who will blame you for their own bad decisions.

Just remember that you have the expertise, not the client.  You should be persuasive enough to convince them of your abilities and recommendations.

Employee Satisfaction
Your own company rests on the quality of your staff.  If your employees are feeling browbeaten by demanding clients, they may very likely seek other companies.  Maintaining a low turnover in your own business enhances your reputation.  Satisfied employees reflect in their daily activities in dealing with all clients and potential clients, which will only enhance your ability to attract and retain more customers.

Change is Difficult
Especially with a new client, the prospect of radical change can cause trepidation.  What you recommend may seem difficult.  You may need to offer a softer approach and continue to explain the benefits and advantages for now and the future. 

Revisit why the client is asking for your help.  Find compromise whenever possible.  Create collaboration between you and them so that the best results can be achieved.

While outstanding customer service is the core to having your own business succeed, you need to be realistic about difficult customers, especially those who border on bully tactics.  Encourage your staff to develop the skills to be confident in their abilities to recommend and persuade clients toward trusting your suggestions.  As your recommendations succeed, your customers will develop a deeper appreciation for your expertise and abilities to help them accomplish their goals.

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- The Capex Team