RESIGNING A CLIENT: Recognize the Signs and Know When to Walk Away

I had to fire a nice client last week and we were barely out of the gates. It was hard. It was also the right decision for the business.

As a service-oriented business we need clients in order to be profitable, but not all clients are good. Teams work tirelessly to outreach, research and pitch, and when the win comes in, oftentimes red flags are overlooked within the cloud of excitement.

DON'T BE BLINDED. Be wary upfront of potential clients who seem emotional, disorganized, miss meetings, aggressively haggle rates, or refuse to sign paperwork. Know the value you bring to the table and look for those who will compensate you accordingly. 

WHAT ARE THE SIGNS OF A BAD CLIENT?

It is easy to spot; failure of payment, abusive or dishonest behavior, unreasonable goals and deliverables, refusal to sign paperwork and just wants to "get started", the account creates internal chaos for the team, continual mission creep outside the scope of work taking up valuable time resulting in no action. 

WHY IS IT SO HARD TO LET A CLIENT GO?

In speaking with smaller boutique agencies and business owners, I am noticing a dangerous trend for keeping bad clients for too long. Mostly, the rationale revolved around a fear-based mentality. Fear of the economy in an election year, wanting to hold on because the client brand helps to provide credibility, afraid of disappointing the client or perceiving the result as personal failure, concerned about managing the client narrative to prospective accounts, and the list goes on. 

Not all clients will benefit your business, and the consequences can be expensive both monetarily and emotionally.

CAN IT BE SAVED? 5 ACTIONS WORTH A TRY BEFORE FIRING: Some Potential Solutions (?)

1.    Adjust your terms and begin billing for projects falling outside of the scope of work; or consider raising your rates to cover the financial hemorrhage (*this will only be temporary fix if there are additional issues). 

2.     Be proactive. Suggest technology or software solutions that may help to streamline the process.

3.     Don't work for free, you wouldn't expect your team to work without compensation and your client shouldn't expect the same. Think about a pausing work until invoices are paid. 

4.     Establish communication and status protocols that outline where delays are.

5.     Adjust your own expectations and think about sticking it out with short-term clients to buy time to replace the business. 

If you have exhausted your options to salvage the business relationship and it is still not working, it may be time.

HOW TO FIRE A CLIENT AND AVOID BURNING THE PROVERBIAL BRIDGE

1.     Clear Communication: Undoubedtly, multiple discussions have already taken place to outline what is not working. Know what the desired outcome will be and create a path to get there amicably. Send an email outlining your business decision and follow up with a phone call. This can be a simple as "our business is moving in a different direction and as a result we can no longer service your account".

2.     Adhere to the contract, it will serve as the foundation to guide the difficult discussion. Terms and conditions, if set up properly will outline the protocol. Give enough notice and maybe agree to a 30-day extension if the project is intensive. Ensure your payment with an invoice for a final balance.

3.     Be Professional: Finish what you started and tie up any loose ends. Complete all aspects of the project and recap. Avoid having heated discussions or pointing fingers; how you choose to depart the relationship is up to you. Reputation is everything.

4.     Find Solutions: It may be a bad client for you for many reasons, but maybe there is a better fit for them. Make intros only if it makes sense.

5.     Leave on Good Terms: Always show appreciation for the opportunity, be gracious and wish them well, take ownership over your own actions and acknowledge you may not be the right fit, and always recap the wins achieved together. 

Recognize when there is smoke and walk away from the fire while it is still manageable; you and your team will be in a better place to grow your business.