Thursday, January 8, 2009

Even in the Worst of Times, Sometimes You Gotta Fire a Client

Although we all know we are in the worst economic slump of our lives, sometimes it’s better to FIRE A CLIENT than deal with their unscrupulous business practices and lack of ethics. Although I run a smallish global marketing company that can always use a new client, my integrity is worth much much more than a few very dirty dollars.

Recently I fired a client. It is a women’s networking company that is actively selling chapters around the country. Their name includes a color. This organization’s leadership does NOT have the members’ best interest at heart; this company has repeatedly ticked off potential partners and with my 30 years of a spotless corporate record, I wasn’t going to sell my soul and soil my reputation for a few bucks. Most four year olds have more knowledge about life in their little pinky fingers than the “leadership” of this group. SHAME ON YOU for doing this to women — and men — during such terrible economic times.

OK, so let’s talk about how this applies to YOU, a small business. How do you just rid of a customer or partner who is simply not worth the headache? Here’s a few reasons why you might want to consider dropping the dead weight of a client:

Customers who are physically or verbally abusive
Customers who don’t pay their bills
Customers who expect you to throw in extra free work to keep their account
Customers who want you to undercut your standard rates
Customers who can’t supply specifications, design elements, or other materials on a timely basis
Customers who continuously express suspicion or distrust of your professional ethics
Ask yourself the question: is the money I make from this customer worth the effort it takes to serve them? Note that the answer to that question can change over time, as your client mix changes (or as your clients themselves change). It’s possible to outgrow a client, as well as to realize that you made a mistake in the first place.

No matter what the reason, actually going to someone who has been paying you for a service and telling them you can’t do business with them, even if it’s the right move for both of you, is tough.

The strategy that I find has worked best for me over the years is to simply go to the client and inform them that you are making significant changes in your business and they simply do not fit with the direction your company is heading.

Some people’s brains lock up at the very thought of firing a customer. This is a natural, but I think misguided, reaction that stems from two main sources. First, we’ve all had it drummed into us that “the customer is always right” - and if you truly take that to heart, it’s difficult to imagine that there could ever be a reason to get rid of a customer. Second, the customer is the one who keeps us eating. Playing with new technology and keeping up with the latest trends is fun, but if you don’t have invoices that someone else pays, it’s very difficult to buy groceries....

Nevertheless, if you take the time to think about it, you’ll realize that not all customers are created equal. We all know that some customers are a joy to work with: accommodating, enthusiastic, reasonable. Conversely, other customers make us dread the ringing phone. They’re demanding, annoying, downright manipulative and abusive. If you’re just starting out and scraping for every dime, you may not be in a position to be choosy. But if you’re even a barely established company, do a cost-benefit analysis and identify the clients that you would be better off without.

Follow this checklist to sever the relationship as easily as possible:

End things in writing, not over the phone. You don’t want to leave any room for misunderstanding, and you don’t want to be argued into changing your mind. No good will come of continuing to work for a customer after you’ve told them you are done with them.

Complete all work-in-progress, and have all work product ready to ship back to the customer.

Have a full invoice for work-to-date ready, and deliver it with the termination letter.
Offer a referral to other consultants who you think might be better suited to the customer, if possible. Ideally these should be firms who you know are actually hungry for the business. Some people suggest dumping unpleasant and abusive customers on competitors that you’d like to cause trouble for, but I personally prefer not to offer a referral at all in such cases.

Be honest. If you’re unhappy with the customer because of consistent late payment issues that you’ve been trying to address for months, don’t tell them that you’re moving to Alaska. It won’t do you any good to get a reputation for lying.

Conflict is rarely pleasant, and firing a customer is as unpleasant as firing an employee. But when you have to make the choice between living with a nagging pain for months and years, or quickly moving on in your career, you should do the right thing for your career.

If you have any questions on marketing, public relations, strategy or sponsorships, please contact the self-proclaimed “Goddess of Marketing”, Mary Ann McQueen Butcher at or 702 994-7282.

Don’t Be the Best Kept Secret!
Mary Ann McQueen Butcher

Red Carpet Marketing, LLC
702 994-7282

Red Carpet Marketing, LLC is a full service media, marketing, advertising, public relations and promotional services company. It targets small to medium sized companies in need of marketing expertise; specifically the companies that cannot afford a marketing department, a publicist or an agency.

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