It’s THAT moment. The moment when you know things just aren’t going to work out. That precise moment, when you look at the phone ringing, see your caller ID and think. “Oh my lord, I do NOT want to talk to this person now. In fact, I do NOT want to ever talk to this person again.” It’s the email that comes through and you think, seriously, SEVEN emails in the last hour?! That’s ridiculous. We are done. D. O. N. E.
and then the “buts” show up…
But I promised to help them…
But I promised to focus on what they needed and think logically through solutions….
But they need me….
and worst of the worst,
But I need them….
Here’s the deal friends, you don’t need them.
Granted – this could have been the opening to a blog about breaking up with a bad significant other. The fact is, these experiences aren’t so different from one another. Ending any relationship that feels like dependency, whether it’s a work one or a love one, is incredibly difficult. Firing a client is likely one of the most awkward situations a business owner can find themselves in. However, it can also be necessary for your sanity and the health of your business.
Finding your ideal clients, those who love you and are happy to spend money on your offering is your #1 priority and who you want to spend time on. Unfortunately, in order to find these customers and shape your pitch, you will likely end up working with clients who are less than ideal. So with that in mind, how do you fire a client? Read more to find out.
Let’s start with the reasons you need to fire your bad customer.
A bad client is bad for your brand.
- Let’s face it. A bad client can sink your brand by association. The odds are pretty good that they have a reputation on the street for being whatever it is they are being…. demanding, unreasonable, unmotivated, irrational or just plain rude. Do you really want to be on their list of partners? Do you really want your brand to be aligned with theirs? There’s a common mantra in personal relationships that “you are the company you keep” and if an unreasonable jerk is your company – either you are a jerk, or you are the jerk’s jerk. Move on.
Enough will never be enough.
- Bad clients and customers are rarely satisfied (if ever). In fact, many of them are only satisfied by the very act of being dissatisfied. You know the type in your personal life. The one who always scoffs at the waiter? Give yourself some space to determine whether or not this is a client who can ever be satisfied. If not, take a non-emotional moment to understand the incongruence between the level of service you can offer them and their requirements. Remember, you started this business on your own in order to create an opportunity for yourself and others, not to be beaten down by an asshat.
Your team seriously does not like working with them.
- Let’s get to the “others” previously mentioned. As a leader, sometimes making hard choices, pushing your team further and pushing the boundaries is exactly what needs to be done to grow your business. However, there is a limit and your team will tell you when you’ve reached it. If you’ve built a team you can trust, tap into their awareness and ask their opinion. Does this customer have any collaborative upside? Is there an opportunity for this client to grow into a more lucrative account? What are the key offenses they have with this client?
- Note – If a client has harassed, attacked, mistreated, or abused any member of your team by nature of their race, religion gender identity, or sexual preference – you have our full support for an immediate and direct firing. Believe us when we tell you, if they’ve done it to your team – they’ve done it elsewhere… Suggested script: “Dear Customer, we don’t do business with people who treat people this way. Effective immediately, we will no longer be working together. Here is your fee back. Sincerely, Not Asshats”
The dollars and cents don’t make sense.
- Speaking of fees, let’s talk money. There is a matter of fiscal efficiency for every small business. You must track the time you spend on each customer. Check out Lolita’s article on Time Tracking to get tips on how to do it well. If a customer is paying you less than you have contracted, based on your assumed hourly rate, then they are a financial failure for your business. You cannot give more time to clients than they pay for. This is a super serious rule. In order for your business to be successful, you must set an hourly rate and ensure that clients align with that commitment. Bad clients eat up time, energy, and perhaps most importantly your ability to prospect for more lucrative contracts.
So… how does it work?
I haven’t always had the moxie to fire bad customers and have rightfully been accused of staying in unhealthy professional relationships for far too long. There was one particular night, while tucked away on a girls weekend in Ojai with my best friend from college, that I was angst-ridden by a client. This client had asked me to help with team development and had proven to be a mercurial, ageist, sexist, minute counting, unreasonable organization.
They wanted immediate team growth, but felt it was of critical importance that the growth not come from anyone older than a certain age, of childbearing intentions, or previously unemployed. I expressed my concern with those values and was met with disdain. I had somehow allowed myself to negotiate a bargain basement price with about a dozen conflicting stakeholders, and my contract was up for renewal. While I am not a professional recruiter, I do help companies build their teams and source great people, but it became clear that I was not only out of my comfort zone but also my value zone.
I thought long and hard about what I needed to do. I realized that the only way I could continue was if the contract was amended to very specific rules, stakeholders, and deliverables. After a quarter of work, we were very close to the finish line and I stood to earn a substantial amount upon success. So I sent my demands their way and went wine tasting. I gently kicked myself for not just walking, because the idea of another month with them felt icky, but the capital return seemed worth it. When we awoke in the morning, I handed my phone to my best friend. She read their emailed reply. They were not going to renew the contract. On one hand, they were taking away about a $25k earning capacity for the final month of work. On the other hand, good effing riddance.
How to Fire A Client
You’ve been on quite the journey with us on the why’s and perhaps have recognized a relationship in your life that needs severing. You want to do it well, you want to do it respectfully. You want to be kind and firm and you don’t want to burn bridges. If you have made the decision to let go, here are a few steps to fire a client in a Spark List kind of way.
- Get good with yourself and your business.
- Take a moment to outline, in writing, the reason your client relationship no longer works for your business. Take on both the emotional and fiscal reasons for severing this professional engagement. This will embolden you when you set through the next step.
- Identify how you wish to let the customer know you are ending the relationship.
- This can be by phone, in person or by email. While many people believe that it is better to pick up the phone and call, often in a contractual situation leading with email is a required element.
- If you are going to make a call, prepare your script ahead of time. Take a moment to review your reasons and craft a clear message that this is not open to negotiation. Remember, this is not about fixing a relationship, but ending one.
- Here’s a sample script – “Hello, Client. This is Summers. (pleasantries may follow). Before we get into the details of our current work, I want to let you know that we’ve decided that at the end of this term I will not be able to renew our contract. My business’ capacity has evolved and I don’t believe that we can serve you in a manner that will meet your requirements.” If you do not have a contract and are on a rolling basis, pick the end of the month. Give a few week’s notice.
- An email option. “Dear Client, I have learned a tremendous amount from working together and believe that your business is a unique and valuable one. Over the course of working with your team, I recognize that the needs you have are not congruent with the service my business can currently offer. Your needs in the areas of THIS THAT and THE OTHER are not at the core competency for my business and we believe you’d be better served finding a new SERVICE PROVIDER. Upon the completion of our contract, I will offer you a recommended list of next steps.”
- Be clear, be direct, be kind and be done.
- Suggest other options for the client to service their business.
- If you happen to have competitors, now is an OK time to suggest their names. Be mindful though, what goes around – comes around. So if they are a real jerk, I’d steer clear of this.
- Give them suggestions on how they might accomplish the work internally by hiring additional full time resources.
- Offer them an end of contract report that will give them next step suggestions. Usually clients decline this, but it is always good to offer and simple to create. Make it one page.
And that’s that. You are done! Relationship over. Great job! Now, take the time and energy you have to go find a better more lucrative client relationship that furthers your goals. You need clients that make you Sparkle. NOTHING else will do.