Natural Selection

Most companies are busy trying to find clients, so it was somewhat of a surprise when recently a discussion started around when should you get rid of a client. The natural reaction is to adopt the view that you never reject a customer. After reading tales of late payers, the day-to-day frustrations of customers who continually change the goal posts or the agreed terms, those who are rude or disruptive, make unreasonable demands, or customers who don’t pay their way. Clients who don’t communicate, especially worrying near deadlines, or fail to meet their obligations. When you start to untangle these details then maybe there is a case for being client selective.

While there might be a myriad of ways for a customer to send up the “get rid” flag, it might be worthwhile to perform some due diligence before making a decision that a customer should banished. The essential thing is to distinguish between what you think may be going on and what actually is going on. If you’re not a one-man business then seriously raise and discuss the issue with others. Maybe your slow payer (frustrating for the financial team) are great clients (for the sales team) bringing in lots of satisfying jobs and other clients. Maybe your lousy client (changing job specs, being indecisive) are your greatest revenue generating customer (pay on time, regular work and big margins). Identify if this behaviour is actually a “problem”. You may have an otherwise great client who doesn’t pay on time. Speak with them to understand the reasons. Is it a one-off issue? Is it a cash-flow problem for them? Are they just slow payers and are never going to change. If the latter, does it really impact your business? If you have good cash flow and their payments are predictable albeit slower than normal, then what’s the problem. They’re just slow payers. Learn to live with it.

Some form of customer review programme will help you from just throwing away business. But what happens if you are a one-man band, maybe a graphic designer. You have a client who you agree to bill for two hours work. Because the customer changes their mind and challenges your designs despite agreeing to them initially, you end up with a 10 hour job that you still have to bill for two hours. Those are distinctly eight hours lost to your other clients, your profitability and probably your sanity. This then becomes a business problem, so prepare to don the “get rid” persona. But take an idea from this. Have you ever opted out or unsubscribed from something. Some confirm you are Gone. Forever. Others will take you to a smart little page that says “sure we know you want to leave but before you go” and offer some options. Which bits do you want to leave? Unsubscribe from everything? Or just from our daily newsletter but keep informed about special offers. The point being there is some further communication, some checking of the added-value of this relationship. For our graphic designer it could be to go back to the customer and suggest that as the service they agreed to had been changed by them, so did the workload, and they are still getting exceptional value but are being billed for the work done, which was 10 hours. If they refuse to accept this and insist on paying you for just two hours, then just accept the hard-won lesson. Then tell them in future they will probably be better dealing with a larger agency that can accept such an impact. If they do ask you to bid again just don’t, or premium price to allow not just for the extra workload but the inconvenience.

For certain industries and some situations the rationale would be to always retain the client, but there is a good rationale that certain businesses just aren’t worth having. The outcome doesn’t need to be a dramatic “we-won’t-do-business-with-you” situation. There are lots of subtle ways to distance yourself from a less-than-attractive client. It comes down to communication, understanding the customer, getting them to understand you, and articulating the value you are providing. Getting rid of clients? As an old boss of mine used to say “nice problem to have”!

This entry was posted in Business, Marketing and tagged , , , by Robert McCaffrey. Bookmark the permalink.

About Robert McCaffrey

Robert is based in the UK and enjoys being involved in marketing and business development, with experience ranging from the IT services industry to social housing, and currently in B2B with a market leader. His interest and enthusiasm for small business arose after two years of digital marketing experience with a not-profit organisation in the UK, helping people start up in business, as well as providing mentoring and online business support advice. This period also made him enthusiastic to personally contribute in this area, and become involved in business forums.

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