Getting customers is hard enough, so you might think it’s nuts to suggest that you fire any of them. But there comes a time when certain customers are no longer worth the money they spend with you. Here’s advice on deciding when to let a client go and tips on how to do it.
For some businesspeople, “firing a client” is an oxymoron. “Fire” and “Client” are two words they would just never think of conjoining. “Fire a client? Are you crazy?”
There are many others, though, who realize that divorcing a client is sometimes the right thing to do when a client has crossed the line of irreparable damage to the client/provider relationship.
This relationship should be based on a “win-win” or mutual value premise: providing a valuable service in exchange for compensation, usually in the form of payment. No client in their right mind would want to hold onto a provider who did not perform their agreed-upon service. In this same light, there are times when the words and/or actions of a client lead to a significant loss on the part of the provider, and continuation of a business relationship cannot be justified. This is when it makes good business sense to set these clients free.
Some justifiable causes for firing a client
Prolonged Accounts Receivable
You’ve had a client for years. The remaining balance, instead of diminishing, has been steadily increasing with each passing year. He’s sent intermittent payments of only nominal amounts, or of late has sent no payment at all.
Nonpayment of accounts is absolute grounds for terminating a client.
RELATED: When the Customer Won’t Pay
Chronic Complainer or Overly Demanding
This is the client who perhaps never has anything good to say about you or your business. In their mind and words, you’re possibly too expensive or the service you provide is never good enough. This is a person who is often very demanding and cannot be satisfied. You know that what you are providing is exemplary, but they complain nonetheless.
A client who constantly berates you or your business is not a client you should be involved with.
RELATED: How to Deal with Demanding Customers
These clients make you feel like they want to take up every moment of your day. In essence, they want you to be at their beck and call 24-7. Traits of The Time Eater may include:
- E-mails or calls several times a day.
- Insists on being able to reach you at any given moment.
- Frequently cancels or reschedules meetings.
A client who takes up a disproportionately large amount of your time is not a client worth having.
Your client is being audited by the IRS. In order to properly represent your client, you’ve asked that she provide you with some critical papers and receipts. You’ve explained to the client the importance of getting this information to you by a certain date. A month after your deadline — and one day before the audit — you receive your information.
A client who repeatedly demonstrates an inability to meet their obligations on a timely basis negatively impacts the quality and integrity of the services you provide. Persistent deadline deadbeats you can do without.
Being Lied To/Being Asked to Lie
Trust and integrity are the cornerstones of a good business relationship. Finding out a client has been dishonest with you is a quick road to that relationship’s demise. And any client who would try to pressure you into engaging in dishonest or unethical behavior needs to be set straight. The good reputation of your business must always be upheld. Unless these clients can be convinced that “honesty is the best policy,” you’ll be better off without them.
Clients who repeatedly lie to you or ask you to lie for them are perfect candidates for client firing.
These clients may consistently exhibit one or more of the following:
- A short-temper where the least little thing seems to set them off.
- Use of foul language.
- Insults or screams at staff members; accusing them of being; i.e., incompetent, lazy or stupid.
- Habitually slams down phone when they don’t like what they hear.
If you have a client who harasses or verbally abuses staff members, it’s time for them to be shown the door.
RELATED: Staying Calm with Angry Customers
How to fire a client
When you’re sure all contractual obligations on your part have been met, prepare and send a termination letter. Remain professional and courteous to the client. Without placing blame or fault, explain that you feel he or she would be served better by going elsewhere, that you’re just not the right fit for them. Give a referral if possible to another provider. This would hopefully be someone to whom you have already spoken with who is genuinely interested in taking on the client. Send a final invoice for any unpaid balance, due upon receipt.
Organize everything you have on the client, place in a file, and store securely.
Resist the urge to talk publicly about the client you had to “divorce.” If you must vent, do so at home with your family. You don’t want to set yourself up for potential slander and libel claims.
Firing a client is an uncommon step for most businesspeople, but if a client is causing you and your business undue hardship or loss, it is probably time to say goodbye. And if you’re in the enviable position of being able to pick and choose clients, weed out “red flag” prospective clients during your screening process. This is far easier, less stressful and cheaper than dealing with a problem individual or company once they’ve already become a client.