Is it Ever Acceptable to Sack a Client?
Ooh! Bet that’s got your attention! Dare we speak of this taboo subject! The fact is, all businesses have clients that, for one reason or another cause so much pain that we really wonder if we’d be better off without them. But a customer is a customer, right? They were possibly a hard-won client and it feels counter-intuitive to let them go. In addition you may be thinking that it’s easier to work with them than to find a new client to replace them. Or perhaps you worry what it would do to your reputation if you were to sack a client – how would that be viewed in your market sector?
A recent article on Accounting WEB suggests that “politeness in the workforce may be detrimental to UK business” with the background research indicating that business managers are reluctant to initiate difficult conversations with clients.
It might pay to establish early on what, for you and your business, would lead you to have that awkward conversation. That way, you do have a chance of confronting the situation early on and possibly turning it around. Some grounds for “dismissal” might include:
- Wanting something for nothing. Oh yes, I imagine some readers smiling wryly at that. The client who pushes for work over and above the agreed brief or contracted terms.
- Expecting you to be available at all hours. We all know that a crisis might arise necessitating some out of hours work – but if your client is expecting you to jump to attention in response to their calls late in the evening or at weekends, warning bells should sound.
- Spurious complaints – behind these are the clients for whom your best is never going to be enough. They will find fault with something, either because that is just the way they are or because they have another agenda, for example….
- Asking for a discount. A client may on the grounds that something wasn’t quite right, insist on a discount on work carried out, or work in the pipeline. Give in to this and it’s a slippery slope to more of the same.
- Setting one part of your organisation against another. There will always be the chancers who claim that “someone in sales” agreed a certain price/a discount/longer invoicing terms…
- Changing the scope of the work required without expecting to pay additional fees
- Refusing to accept your expertise, recommendations or advice, continuing to do things their way yet blaming you when things go wrong as a result
- Providing oft-asked for documentation at the last minute forcing you to work into the small hours – the adage “poor planning on your part does not necessitate an emergency on mine” (Bob Carter) comes to mind!’
- Taking too long to pay your invoices, remember cashflow is key
- Rude or abusive language or behaviour to you or your staff – for me that’s non-negotiable. Everyone should be treated with respect or courtesy.
Quite a list isn’t it? Only you can decide which of these, on its own, or in conjunction with others, is reason to consider sacking a client. You may initially prefer to try reasoning with them, speaking honestly about how their behaviour or attitudes impact your business. Such conversations run the risk of alienating the client such that they threaten to, or do, take their business elsewhere so before entering into such a conversation, you need to be prepared for such an outcome.
There are those who think the answer to problem clients is to increase your fees in the hope that they will then just go elsewhere without any confrontation. There’s always the possibility that those clients will accept the increase – but with it will come a rise in their expectations of your service to them! Are you willing to take that risk?
One creative solution could be to propose that competitor firm x might be better suited to their needs. You solve your problem and pass the headache to someone else! Be careful though – they may do the same to you!
If you’ve explored all options and feel that losing a problem client is the only way to free you for more productive work, your letter or email to them will have to be carefully worded. Focus on indisputable facts, citing examples, never get personal and end with the wish that they find someone better suited to handling their business. Alternatively you can keep your correspondence quite simple, without offering any particular reason beyond “not best fit” or “due to increasing workload we reluctantly inform you that we are unable to continue to represent you/work for you…”
When you’ve drafted your resignation email/letter, Mark Lee, consultant practice editor of Accounting WEB advocates not sending it straightaway. His advice is to promise yourself that you will do that after you win a new client paying you similar fees. His view is that it’s amazing how much of an incentive that can be to seek out such work!
It’s a sad fact of corporate life that some clients are, in the long term, more of a liability than an asset to your business. The best advice we can give is to place the value of yourself and your business above that of a fee generated by working for people who don’t appreciate you.