Knowing when and how to fire a client is a skill that can benefit your career tremendously.
Whether you are a lawyer, accountant, a freelancer or a business owner, there is no joy in losing a client. They are the foundation on which a successful enterprise is built.
Firing a client is a road less troubled - but it can be a bit scary if you're not used to it.
The problem, however, is that a client can sometimes stop being an asset and can actually inhibit your growth. Such clients are in reality a liability and deciding to retain them can do more harm than good. These clients consume valuable time and resources without contributing in a significant manner to your success.
Letting go of your first troublesome client can be a challenging experience, but honestly, it’s one of the most important milestones in your business.
Recognising troublesome clients
It’s common knowledge that in a business all clients are not equal. The Pareto principle, named after Italian economist Vilfredo Pareto, recognises that 80 percent of the results come from 20 percent of the participants. The argument here is that 20 percent of clients account for 80 percent of your income. The remaining 80 percent are either indifferent or they are liabilities to your business.
As such, it makes sense to analyse and profile your clients. You should channel most of your resources to your most valuable clients.
This does not necessarily mean you should go around firing the other 80 percent, but it might be worth dropping the troublesome ones. These are those clients who:
- Are constantly not satisfied by your work
When you do everything in your power to make a client happy still they aren’t happy, it is a sign that you should go your separate ways.
- Don’t pay bills on time / insist on old pricing
Some clients are too slow in making payments and this can affect the stability of your income. Others will insist on old pricing even when it’s clear that you’ve outgrown your original rates. Ideally, your price should be an indicator of the value and quality of service you provide.
- Disregard your professional advice
Chances are you’ve met a number of clients who don’t follow your advice. However, when this descends to the complete alteration of your work, you should consider ending your engagements. Should anything go wrong, they will still hold you responsible.
- Aren’t communicative
This kind of client hires you, issues strict guidelines but when you need additional input or feedback, they are unavailable.
- Take up a huge amount of time
If a client issues you with time-consuming tasks the pay should be worth it. Otherwise, such tasks can only slow your progress.
It’s in the best of your interests to channel your resources to the profitable 20 percent while not letting your profitability suffer due to the demands of the costly few.
How to let go of a client
No one likes firing a client. However, when you do decide to sever ties, it is important to ensure that you do so in a professional manner.
Remain professional. Don't burn bridges that you might need to cross in the future.
Point to the client the issues and problems that you encounter working them. Offer possible solutions, and ask the client for his or her opinion. If the problems with your client persist and if the client resists your reconciliation offers, then you can proceed and terminate your engagement.
Firing a client isn’t something that you do every day and it’s best to meet with the client in person. Remain professional and courteous and avoid being defensive, you don’t want to burn bridges that you might end up having to cross sometime in the future.
In the meeting, have with you any documents related to your engagement, including contracts and invoices. Attend to final details and paperwork and assure the client that you will deliver the pending tasks if any. Explain to the client that you feel that he or she may be better served by going somewhere. If possible refer them to another provider who is interested in taking the client.
Should you find the firing process a little too much for you, you might want to hold on to the client till the end of your current contract. At that point, you can decline a renewal and calmly explain to the client that you wish to put your engagement to an end.
The beauty of running your own business is that you can let go of a client when you need to. After all, to make room for better, more strategic, and more lucrative clients, you have to be willing to let go of the ones that are holding you back.