Have you ever had to sack a client? Or have you ever wished you could?
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:
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:
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!
By Kevin Sheldrake (originally posted as a guest blog in April 2016 in the excellent Re: Accountancy blog).
Do you have a Benefactor Client? Someone who: Probably has a strong presence in your industry; they are easy to manage; you have a good relationship with them; and the custom they give you is longstanding, reliable and lucrative.
Maybe the ongoing work is a bit of a given. Maybe you don’t have to work too hard to keep them happy, or to keep the income flowing. Maybe you’ve already come to see them as a bit of a ‘Golden Goose’ to your business?
Don’t get me wrong, there are many advantages to having a Benefactor Client:
Sounds great, doesn’t it? However, these highly desirable benefits and opportunities come at a price, and a flipside that can pose a significant risk to your business:
With some regularity, I come across a business in the grip of turmoil, where they have lost their comfortable Benefactor Client and suddenly found themselves needing to make up a substantial shortfall in income and brush up on all the skills and activities they have neglected.
While there is no need to kill the goose (drop an existing Benefactor) or avoid acquiring one, some smart planning is required to make the most of the opportunities, without over-exposing yourself to the risks. These four tips are a good start:
Benefactor Clients are an excellent way to give your business a boost or give it some stability in a rocky period. But, you should always keep your business moving forwards. Don’t let yourself become reliant on your Golden Goose, you just never know when it might be poached by a wily fox or meet some other misfortune.
Look for new opportunities and continue to forge new relationships and connections. Grow your presence and visibility in your industry on your own terms to work towards your business goals.
What are your views on ‘Benefactor Clients’? How do you balance your resources and time between Benefactor Clients and smaller clients? Let me know in the comments.
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