Firing Clients! Are you mad?

When was the last time you fired a client? Have you ever fired a client? Are you nuts?… I hear you ask.

Although it may sound ridiculous to some, the idea of letting a client go is not new or radical. Many clients need to be fired!

A colleague asked my advice recently about a client that was causing some sleepless nights. It seems the client was forever complaining about pricing, wanted everything yesterday and was notoriously slow in paying . Usually the accounts payable department would call my friend to see if a lower price could be negotiated, after the job had been completed, even though price was part of the original contract.

To complicate the situation even more, the contact person for the client was a friend. Not only was the business relationship on shaky ground, the friendship, valued by my friend, was beginning to wane.

After being told that this client accounted for less than 20% of my friend’s business, I suggested that he save his friendship with the client contact person and fire the client. I explained that the time spent trying to maintain the friendship, and appease the accounts payable department could be well spent cultivating additional clients that were less hassle and more appreciative of his efforts.

Many of you, especially those that are consultants, or those with newly created businesses looking for the first month in the black, may think my advice was a bit rash, but I believe the advice was sound. In the long run, I believe my friend will come out ahead.

There are plenty of companies that want to treat suppliers fairly and in return they expect to receive full value for their dollar spent. These are the companies that we should be pursuing as clients.

I once had a client who always complained of a “cash flow problem” (translated that means the client has enough for himself, his wife, kids and a boat, but not for you). He would ask to pay a partial payment each month as evidence of his “good faith”. I was young, eager and broke so I took the deal. It took me about six months of “good faith” payments to realize I had been taken. When I told the client that he would have to pay in full before he received any more of my services… he fired me! He had everything he needed by now so I was of no use to him and… he got my services at a cut rate.

I was devastated, depressed and felt violated! I vowed never to let that happen again.

That is not to say I won’t or haven’t worked with clients that are not always flush with cash. But we both know the situation at the start of the relationship. Solid relationships are built upon trust.

A client you can’t trust will cause you more grief than you can handle. They will always want more for less and take longer to pay for it. In the meantime, the value of your service decreases to both you and the client.

How do you fire a client? Be neat, quick and professional. Don’t leave loose ends. Submit a final statement with payment terms clearly defined. Be specific when telling the client why you are taking such action.

You may feel a little pain and miss the income for awhile, but, if you put the same amount of effort into growing new clients, I’m willing to bet you will soon be more productive.

 


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