Here’s a tough dilemma for any business owner: is there ever a time when should you say goodbye to client?
Never. For the past fifteen years, my first response to that question has been—never voluntarily say goodbye to any client. You work to hard to get clients. You invest a lot of extra hours—beyond your paid compensation—working for those clients. And in economic times like these, clients are even harder to come by. In fact, my philosophy has always been that every client is a good client, one worth sticking with through thick and thin.
However, over the past several years, I’ve come to realize that some clients are simply better than others, and that sometimes there are legitimate reasons why you might want to consider parting ways with a client. Here are a few reasons you might want to consider.
Partnership. There’s nothing better than a true partnership with a client, one where the goals and outcomes are shared and the vision to execute them are mutually agreed upon. But not all clients want or need a partner. Sometimes clients just want a vendor who can deliver high quality service in a timely fashion—and fairly paid basis. And while there’s nothing wrong with a good, solid client-vendor relationship, where both parties benefit from the relationship, sometimes the lack of partnership is too much to overcome.
Respect. Whether your client views you as a vendor or client, no relationship works without mutual respect. Treating and being treated with respect is crucial in any relationship. When it becomes obvious that a client does not respect the amount of time, work and effort that you put into your deliverables, it might be time to say goodbye. And I’m not talking about clients who are demanding. Every client has the right to be demanding, and when coupled with respect and appreciation, these are the clients we like best because they challenge us as well as themselves to reach new levels of achievement.
Constant Price Pressure. When your client relationship starts with price negotiations from day one and cost reductions are the main driver of the relationship, it may be time to rethink the agreement. Constant focus on cost reductions means the client doesn’t value your work or simply isn’t willing to invest in quality. These days no client has money to burn, so being accountable for measurable results is a mandatory part of any business relationship. But great clients don’t mind paying for great results. The best clients are those who even increase their spending once benchmarks are achieved so that they can push the bar even higher.
Redeployment of Resources. In tough economic times, every business needs to closely examine the resources they employ to make sure that they are getting maximum efficiency from them. When it takes two people to work on a $50,000 client with a 25% margin and the same two people could work on a $150,000 client with the same or better margin, you’ve got a financial decision to make. Of course, other factors such as long term potential, loyalty and marquee-value may also be legitimate reasons to stay with a client even if they aren’t the most profitable client. But every client relationship needs to be examined from both a financial and business standpoint to make sure that both parties are benefiting.
Ultimately, the decision to say goodbye to a client is one of the most difficult that any business owner needs to make but sometimes, it can be the right one.
If you’ve faced this dilemma at your business, I’d love to hear your thoughts on how you handled the situation.
As business owners, we are programmed to think, “The client is *always* right,” and “Over-deliver.” But, I have had to ‘fire’ a client, and most of my fellow entrepreneurs say the same. I consider it a badge of honor, actually, because there are times when we are simply not the right partners for our clients. We probably know it before they do, and/or are prepared to address it before they are.
In these cases, we have two options: Take the money and try like hell to get it right, or have an honest conversation to address the needs of the client…. and help them find the best solution.
One of my favorite cartoons shows two halves of a ying-yang (so, two yings, if you will…) looking at each other. The one says to the other, “You want me to turn upside down and do what?!”
Forcing a square peg into a round hole is awkward at best.
As adages and quotes go, I prefer:
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
Farewell, my blessing season this in thee!
Thanks for the great insight into the mind of a CEO. It is particularly interesting to see that the decisions of make or break with clients don’t just come from financial projections, especially in more difficult economic times.
Also, great comment Jackie, I especially liked the ying-yang cartoon. Funny!
Relationships are always hard to let go of. Working with associations, our team builds relationships with our customers and the can do attitude…we must find a way…prevails.
The biggest issue is the service and price equation. Customer require the service but can’t afford the price and in 2009, price won. While we continuously improve processes and make improvements to lower costs, we still place a value on service.
So if they must go we don’t say Goodbye, but instread, “hope to see you later.”
Excellent post and not something we like to talk about…openly.
Thanks David for weighing in on this difficult topic. It completely goes against the nature of every entrepreneur to let a client go, but sometimes it’s necessary.
Sometimes you just have to turn the page. When clients decide respect can no longer be part of the equation, it’s time for them to go. We’ve fired very few clients during the past 28 years. Most of them say for a long, long time. But, there really does have to be a limit – something you won’t do for money. Self respect is more important than any client.
Thanks Elaine for your thoughtful response.
Jim:
Good article and true.
I’d also toss in firing a client when continuing to service them demoralizes your staff. I’ve seen talented people leave agencies because they feel like hanging on to a marginal client is more important than keeping their staff intact. When the client forces you to do crappy work, it’s time for them to go.
I am strangely loyal to my clients, almost to a fault. I fight for them and their businesses because I want to. I honestly feel just as passionate about their projects, as I do my own. I know something is not right whenever I start to feel anything less than complete loyalty towards a client. Whenever that happens, it is extremely rare, and usually due to a lack of respect, as you mentioned in your post. When that happens, you try to reach an outcome that will suite everyone involved and, unfortunately, the best thing sometimes is to part ways.
Great post, I found you on the Junta 42 list of Top Marketing Blogs, (I made the list too!). I wanted to say congratulations!
Best regards,
Missy Martin