There are occasions when letting someone go can be good for maintaining a healthy business. In many ways, firing a client is similar to firing an employee. In both cases, you have an established relationship, you need to provide the client solid reasons for making the change, and you must be aware of the consequences before making the change.
Steps
Part 1
Part 1 of 2:
Deciding to Fire a Client
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Evaluate your client's performance objectively. There can be several key reasons why a client isn't working out for your business, but it's rarely in your best interest to end a business relationship just because the client is demanding or overbearing. Reputation is one thing that you can't buy, so make sure to guard your reputation by only letting clients go when the situation objectively demands it. [1] X Research source
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Determine whether the problem stems from your client's expectations of you. If the client has unrealistic expectations of what your business can do, it can cause them to place unreasonable demands on you. Maybe the client always expects free additional services. Maybe they just make demands on you that aren't worth what they pay. Should this be the case, try and manage their expectations on what you can and are willing to do before you need to sever the relationship entirely. [2] X Trustworthy Source Harvard Business Review Online and print journal covering topics related to business management practices Go to sourceAdvertisement
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Decide if the client is living up to your expectations of them. If the client is failing to provide your business the expected services or products--or isn't providing them in a timely fashion--it can cause your whole business to suffer. It's best to meet this kind of problem head on, before an acrimonious split becomes inevitable. Speak frankly with the client about their shortcomings, but most importantly, explain what impact their failures have on you. [3] X Research source
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Make sure that you are in the right. Since reputation is so important, if you feel that you must end the business relationship, it behooves you to make a few discreet inquiries to see if others agree that the relationship is unsalvageable. Talk to a few employers or partners in the company and ask them what they think. There might be things they can do to change or rectify an unacceptable situation. They might even be able to come to your rescue in unexpected ways. For instance, maybe another partner will want to keep the client for themselves. [4] X Research source
- Tally up the amount of money that this client brings in. Sometimes a client simply isn't bringing in enough revenue to justify they trouble that you have to go through to get it. If you can justify ending or modifying the relationship on that basis, all the better.
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Check whether the client is influential in the company. Does this client have many other clients as friends in your company or other companies you associate with? If handled improperly, firing one client can make you lose half of your other clients as well. There is a saying in business: "Do not shoot off your foot over a bad toe." Be cognizant of the possible chain reaction that might follow the firing of one client.Advertisement
Part 2
Part 2 of 2:
Firing the Client
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Prepare a good explanation. Even if you plan on ending the relationship in a face-to-face meeting, it's a good idea to have a script to work from. Use the documentation to explain to your client why you're unhappy with the services they're providing, the input they're giving, or their expectations from your business. Better yet, depersonalize the reasons for letting the client go. Show how your own business has changed over time and how it is no longer able to meet the needs that the client has. [5] X Research source
- Always seek professional business advice if they are a client that has stakes in the company.
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Treat disrespectful client behavior with a great deal of care. If the client is paying for services or goods from your company, they may feel that they had a right to be pushy, bossy or intimidating. If you're paying for their services as a consultant or a contractor, they may feel that being frank and bold was a good thing, while you simply found it confronting and rude. Although these are perfectly legitimate reasons to end your relationship with a client, in the interests of reputation, you should avoid laying the blame on the client directly, especially in this kind of situation. You already know that this particular client is prickly, difficult, and perhaps even impulsive or hot tempered. Therefore, you should give them as little reason as possible to badmouth you around town. [6] X Research source [7] X Research source
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Fire over the phone or in person. You can follow up with an email or letter to finalize things after the discussion. It is recommended that:
- You provide at least three reasons why you must let them go.
- Explain that you have more clients than you can handle, and that you need to pare down your workload. This has the virtue of always being true--even if you would be able to handle more good clients, this particular bad client is more than you can handle.
- Be respectful and listen to their point of view, but don't argue. If they become too aggressive, just explain that you value their input, but that your decision is final.
- Offer a new service company or another service worker that will be able to work with them instead of you.
- Be honest about why you are letting them go so they can change the way they act or help them change their attitude for the future.
- Be polite and act concerned about what they think. However, be firm about your decision and let them go.
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Decide what your deal breakers are going forward. As a businessperson, you certainly don't want to get into a situation where you are firing clients right and left. Therefore, you need to formally write out the types of client behaviors so detrimental to your business' well being that it will give you cause to end the relationship. Even if you don't share this list with your new clients, it will help you objectively evaluate each new situation as it arises. [8] X Research sourceAdvertisement
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Tips
- When dealing with bad clients, you may also need to make sure they have paid you in full before you actually fire them.Thanks
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References
- ↑ http://www.bloomberg.com/bw/stories/2007-10-28/when-why-and-how-to-fire-that-customer
- ↑ https://hbr.org/2015/01/a-consultants-guide-to-firing-a-client
- ↑ http://www.businessknowhow.com/marketing/fire-client.htm
- ↑ http://www.bloomberg.com/bw/stories/2007-10-28/when-why-and-how-to-fire-that-customer
- ↑ http://www.nicholasreese.com/problem-client-scripts/
- ↑ http://www.businessknowhow.com/marketing/fire-client.htm
- ↑ http://www.nicholasreese.com/problem-client-scripts/
- ↑ http://www.nicholasreese.com/problem-client-scripts/
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