Not all clients are created equal. Nor should you be compelled to treat them equally. There’s no law stating you must sell to everyone, or keep servicing clients who don’t fit with your business.
It’s as fair to say that your business has outgrown some types of customers as it is to say you have customers you should’ve never brought on in the first place.
If you’re suffering working with a client who you know isn’t profitable, you won’t be motivated to serve them well. And, if that client isn’t receiving the best treatment, they won’t hit their desired goals or be very happy either. By virtue of this predicament, you’ve created a lose-lose situation: You’re not helping the client reach their objectives and they’re not helping you reach yours.
Besides the ones who clearly aren’t profitable for you, here are four other types of clients who must go immediately:
1. The ‘it’s all about me’ client: These are the clients who expect you to work only for them and all the time. They drag phone calls into demanding, in-person meetings and lunch appointments into all-day events. They even call your cell phone on the weekends.
These relationships never work and turn ugly when the client’s inappropriate expectations aren’t met. I fired one of these “I expect you to be in my office for a 6 P.M. meeting today” clients after only one month. Life’s too short.
2. The ‘or else’ client: Walk away from any client who constantly peppers you with threats. They might warn you they’ll withhold payment, leave for the competition, or shop your solution around. You can’t do your best work for them if you’re constantly under negative pressure.
Recently a technology company client fired a customer who used “or else” a lot. They told my client, “Do this or we’ll replace your software with your competitor’s product!” and “You have to give me free support or I’ll leave!” At first my client obliged because this was a big customer. Then, however, the demands became so outrageous it was no longer worth the effort.
3. The ‘pay you later’ client: You aren’t a bank, even if you work for a bank! Cash flow is the lifeblood of any business. When a client starts abusing the financial aspect of the relationship, talk to them immediately. If they won’t rectify the situation, stop work until they do or fire them immediately. No matter how prestigious.
A manufacturing client recently ran into this issue. Despite repeated requests, their customer was 90 days late on a payment. The solution? They stopped making the product for the other party. Without the needed shipments, the customer was forced to shut down their own manufacturing line and lost production time. Needless to say, the overdue payment arrived quickly after that!
4. The ‘drama queen’ client: Success and failure should be a shared experience. When you and the client achieve a desired outcome, it should be celebrated as a team effort. And, when something goes awry, there shouldn’t be any finger-pointing on either side. Everyone accepts responsibility for their part in what went wrong and quickly resolves the issue.
Rarely is a mistake one-sided but if it is (and all on you), accept responsibility immediately and resolve the issue. If a client is continually parading your joint success as their own singular success while at the same time foisting all the blame on you for any failures, your relationship is one-sided and can never be profitable for you.
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Cutting ties
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 your team and the company. Cutting ties now with troublemakers not only frees up time to focus on your more profitable clients, it also provides a boost of morale internally. When you step up and fire a bad customer, you win everyone’s trust, loyalty and respect ̶ especially your own.
Here’s the easiest, most respectful way to fire a client:
- Phone them: Don’t use email. Acknowledge your business relationship and explain you’re no longer the best fit. For example, “Thanks for all your past business to date. I sense at this point we’re not in the best position to meet your future goals.” Always keep the focus on the client’s interests.
- Stay classy: Don’t use this call as an excuse to tell the client everything that’s wrong with them and their approach. Simply explain they’ll be more successful working with another company.
- Provide options: This way you can quickly find the client a new home. For example, one of our staffing agency clients always has a list of other local staffing agencies that might be a better fit in case he gets a call from people he can’t service.
Once you gracefully let go of problem clients, you’ll have room to focus on the higher-caliber ones who will, in turn, strengthen your business.
Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.