I went through a time when I thought I deserved to be treated better than one or two of my “bad” clients seemed to treat me. Yet, there I was in a bad client situation.
I went through a phase where I got a kick out of “firing” clients that (frankly) I didn’t want to put up with anymore. As in, the fee I was charging them didn’t cover the time and emotional suck they caused me, and my staff.
So then I spent some time evaluating which stress I’d rather deal with, the revenue loss, or the pains in my life the client was at the moment. (Hint: Usually, I just need to get more sleep and consume less caffeine). Then I had a “come to Jesus” moment with myself and extracted these valuable lessons.
“The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.” –Wikapedia This means that you are spending roughly 80% of your time on what brings you only 20% of your revenue. Of all your clients, who takes up the most of your business’ time?
“So you need to apply this to those clients that are bringing in the least amount of revenue and taking up the most amount of time, and you need to fire their asses. Seriously you do.” – Natalie Sisson
SIGNS YOU SHOULD TAKE THIS SERIOUSLY You are swamped with work. Even though you are overwhelmed with too much to do, you are still near broke. You have lots of small clients. You are often too eager to take on new business and don’t want to turn anyone down. Clients leave you feeling frustrated, offended, exhausted or undervalued. If any of this fits you, taking a hard look at your clients is a critical task you need to do.
Recognizing the clients you need to fire:
SKIN IN THE GAME
Some companies are often new start-ups or young. They are in it with their hearts regardless of empty wallets, and they think everyone else should be too.
They “… expect their vendors to share in their risk. So, they’ll not only ask you to lower your fee and accept the difference in options, but they’ll also expect your team to work 24/7 just like their minions. We’ve learned over the years that these relationships almost never work and, indeed, often turn ugly when grandiose expectations aren’t met. We fired one of these “I expect you to be available to me at all hours” clients after only two months. And, I’m glad we did. Life’s too short.” –Steve Cody
EVERYTHING FOR NOTHING
There’s nothing wrong with negotiating for the best price. But if a client expects you to work for free, move on.
“Everyone — including a good client — wants to get the best deal possible. However, if a client is overly pushy about prices from the start, take this as a red flag. These same clients will probably grumble with every invoice, ask for extra work outside your initial agreement, and will never understand the value of professional work. Debating every invoice and quote will suck up too much time and emotional energy. Don’t waste your time on clients who don’t appreciate the value you bring to the table. As long as your pricing is fair and you perform good work, don’t worry about losing a client or two that finds your services too costly. Remember that low-quality clients tend to lead to more low-quality projects.” –Forbes Entrepreneurs
Have a client who is unreasonably intense and uses threats (both mild and otherwise) in their communication? Sometimes this includes the “anything less-than-my-version-of-perfection is unacceptable.” Obvious prophecy: The relationship is doomed to fail.
“We walked away from one very-high-profile client because, frankly, they used fear to motivate their agency partners. Our account team was told at the start-up meeting it had only one chance to fail. So, the client warned, our recommendations had better be spot on or we’d be fired. Needless to say, this sword of Damocles scenario frayed everyone’s nerves. The team was afraid to suggest out-of-the-box ideas in case the client might not like them. And, in turn, the client began complaining that we weren’t being edgy enough. So, when a competitor approached us, we fired the fear-factor customer and began a healthy relationship with another blue-chip organization that continues to this day.” –5 Customers You Should Fire
I’M NOT LISTENING… LA LA LA LA LA
With any work experience, you have undoubtedly run across clients who talk and talk, then send you off on your project. You return with a hard-worked project in hand, only to have them nix everything you have just done.
“If you’ve been working long enough, you are bound to run across clients who don’t follow your advice, are resistant to change, or simply think they know better (even though they hired you for your expertise in the first place). Perhaps they edit and revise your work beyond all recognition. Or, they don’t listen to your advice in the first place and then expect you to fix everything when things go wrong. Dealing with a client who continually refuses to listen to you can be a hair-tearing experience that creates more stress than it’s worth. These clients may pay well, but there’s little job satisfaction as it’s nearly impossible for you to be proud of a finished project that goes against your advice and expertise. If you find yourself stuck in this situation, respectfully voice your opinion, complete the work to the client’s liking, and then be smart enough to move on.” –6 Reasons to Fire a Client
CHECK’S IN THE MAIL
The notorious late-pay or no-pay clients. It’s painful! Some businesses are so financially robust you are surprised at their dragging feet in paying you. Others seem to simply not value you. Without words they say “You aren’t worth what I agreed to pay you,” yet they want more and more work from you.
“Some clients think we’re their bank. So, they’ll ask us to front their out-of-pocket expenses. Or, they’ll ignore our 30-day payment terms. As every entrepreneur knows, cash flow is the lifeblood of any business, so when a client starts abusing the financial aspect of the relationship, it’s time to have a come-to-Jesus conversation. We ended up firing one very prestigious client because they were decimating both our cash flow and profitability. Our accountants and lawyers still use it as a case study with their other clients.” –Inc.com Customer Service
I ALWAYS WIN, YOU ALWAYS LOSE
The greatest success comes when teams work together and goals are accomplished. There are many work situations where it is possible for everyone to share in success. Some clients and their leadership simply don’t see life this way. They have to make sure somebody “loses,” and since they can’t be the ones losing, it has to be you.
“I believe that success and failure should be a shared experience between client and agency. Victories should be celebrated as a team effort. And, when something goes awry, there shouldn’t be any finger-pointing on either side. “We fired one client who continually merchandised our successes as her personal achievements yet was always the first to point the finger at us if something didn’t happen as planned (i.e., the client’s product was omitted in an industry roundup story, etc.). One frustrated employee after another asked off the account. So, rather than risk losing our talent, we terminated the prima donna client. And, I must admit, I enjoyed doing the deed. It [boosted morale for the] employees. “They know their paychecks are tied to the firm’s billings, and that every client dollar is precious. So, when you step up and fire a bad customer, you win the troops’ trust, loyalty, and respect. Firing a client may mean a short-term hit to the organization’s profits, but it’s critical for the long-term emotional health of the organization. Try it. I have a feeling you’ll like it.” – Steve Cody Co-founder, Peppercomm
NEEDY AND UNREASONABLE
You know them: The nightmare client who calls at 11 p.m. with a new idea. The client who acts like you are their dedicated employee. There’s also the poor planner who expects you to drop everything in your life at a moment’s notice and save him/her with last-minute work. Not just once, but week after week. If their way of thinking doesn’t work for you and your business, then you need to re calibrate their expectations.
When your clients are like this, saying NO is the best thing you can do.
HOW TO FIRE CLIENTS
Disclaimer for this How-To: Assuming that firing this client is not a breach of your contract, that you do not owe them work, that your relationship with them is primarily over email, that fixing the relationship is not possible or desirable for your business, then here is an awesome template from Naomi Dunford to help you through the awkwardness of what to say.
[The salutation. You can use whatever you normally use, or you can say “Dear”. I like “Dear”. It’s a Dear John Letter, not a Hi John Letter.][The intro. The only real goal here is to transition to the second paragraph. As long as what you say isn’t actively stupid or abrupt, you’re fine. Nobody’s paying attention anyway.]
[The setup. Succinctly summarize the current situation. Try to say something nice. White lie if you have to. You’re allowed to say “I’m happy to see you’re growing” even if you’re not that happy at all. This is a firing letter, not marital counseling.][Feelings, baby. This is where you say how the situation described in the setup makes you feel. Make it about you. Nobody can argue with how you feel. Jerks might try, but it’s a hard skill to master. If you’ve tried to train them in the past, put a reference to that here.]
[No negotiation summary. Based on how you feel, this is what we’re going to do now. The feelings part can leave a lot of people thinking there’s room to argue, negotiate, or otherwise engage in conflict. This part shuts that down. If it’s appropriate to refer, do so here.]
[Positive closing. You are allowed to lie here. You are allowed to say that you wish them the best of luck even if you actually wish they get run over by the Heathrow Express. Do not offer anything you don’t want them to take you up on.][More formal end than you usually use. I use “Yours, Naomi”. This differentiates from my normal communication, which is “xx ND”.]
For more examples of communicating with clients you are firing, see Awkward Business Conversations.
You attract into your life what you want out of it. So kick out all the stuff you don’t want. Do it professionally, with honor to yourself and your clients (even the ones you really dislike). If you actively adopt an abundance-based mindset, you’ll soon find your client portfolio full of your ideal clients. Even better, create a detailed list of what types of clients you want to work with. (More on that topic another time!)