Clients and client relationships come in many forms. They can be the most reliable partners and brilliant vocal advocates. Yet, at the other end of the scale, there are those that are unreliable, erratic and difficult to work with; clients that restrict innovation or whom you feel obliged to undercharge. They can easily become a negative downforce, cursing your business into a sleep-like state; preventing it from achieving its full potential.
If you recognise a client has any of the following traits, then it is time to re-evaluate your working arrangement and consider whether the relationship is really worth continuing. After all, it’s your business, and it was founded on vision and independence. You should not end up begrudging or resenting your clients!
Warning signs of a sub-optimal client include:
- They constantly haggle or refuse to pay additional charges for extra work.
- They don’t value your time, expertise, or your commercial business priorities. They expect instant responses, at any time of the day or night.
- They give you cause for concern about their own stability – perhaps their financial position is precarious, or the business is unreliable.
- They regularly increase or decrease the scope of projects, often at short notice, thus affecting your scheduling and productivity.
- They routinely disregard your payment terms, and you have to spend unnecessary time chasing their payment admin processes.
- They are over-demanding, discourteous or disrespectful.
- They don’t act on advice or follow instructions, and so create unnecessary down-the-line turmoil for you.
- They have such scale or power to affect the day-to-day running of your business or inhibit your work with new or existing customers.
- They are difficult to contact and often require you to chase a response. Or, they need frequent contact and updates to the point where it causes disruption.
If these attributes are an agreed part of the client proposal, then that’s one thing. And, if you’re able to offer instant responses or 24/7 support, then that can be a brilliant part of your customer service strategy. However, when this is not part of the deal, and there is no provision or costing for the extra level of resourcing that these exceptional demands require; your daily operational activities can quickly become adversely affected.
Certainly, a regular prune of your client list is one way of ensuring your business runs more smoothly. And, with fewer problems to contend with, you can focus on acquiring and servicing the right prospects.
Don’t do this in anger though, or without a strategy: Just as there are many benefits to managing away a bad client, there are also risks. Your hard earned reputation may become a casualty if your customer feels they have been rejected or let down when you part company. Things can also become unpleasant or awkward if you worked closely with them, or will continue to operate within the same network.
And, avoid gimmicks and easy fixes at all costs! Ignore any friendly advice you receive telling you to get a client to sack you by ‘simply’ doubling your prices, giving them a substandard service, or handing their account to a junior member of staff. Trust me, word will get out one way or another about your poor service or sudden price hikes, which will only serve to spook your existing clients and deter new ones.
So, how can you successfully manage away a client, whilst suffering the least collateral or reputational damage? Take due consideration and then follow these four steps to ensure the split is as professional and painless as possible:
- FIRST: Stop and think – Is there a more positive alternative? Before you do let that hard-won client go, are you absolutely certain that you cannot convert them into a good client? Could you re-educate them and show them how life would be much easier and more efficient doing things your way? You will probably have invested a lot of time and money in onboarding the client; don’t just throw all that away without even trying to repair things.
- SECOND: Can you re-price them? I don’t mean some cheap tactic of doubling your pricing to get them to walk away. I mean having a discussion with the client and explaining to them how the workload they now generate was not in your original discussions/estimates/quotations, and so you need to adjust the pricing to reflect this. Be honest and transparent about what the extra work and resulting costs are. This isn't about penalty; it’s a matter of fair recompense. And, don’t think of this as a bluff; you have to be genuinely happy with the outcome if the client agrees to the new pricing.
- THIRDLY: Keep it simple and honest – If the previous steps don’t resolve things to mutual satisfaction, then resign your services. Explain how the nature of the work has changed, and maybe so has your business; you therefore no longer feel as though you can meet their needs or give them the appropriate level of service. Suggest that an alternative approach is required to avoid things deteriorating. Keep it simple, honest and professional.
- FINALLY: Source an alternative supplier – Certainly, wherever you possibly can, provide a recommendation or introduction to a good alternative supplier. By making the handover as smooth as possible and not just walking away leaving your client in the lurch, you’ll minimise the disruption to them, and the reputational fallout to you. Done well, this kind of professional, pragmatic handover can actually leave a good impression and enhance your reputation.
Although ‘bad’ clients are an almost inevitable part of running your own business, you can try to reduce your exposure at the outset. Set clear boundaries from the start and implement a filtering process to check customers’ suitability. Most importantly, then have the confidence to say no if you don’t think they will be a good fit.
Have you let a client go? How did you do it? - Let me know in the comments section below!