Photo by Edmond Dantes
Some clients are a dream to work with, and others, well, not so much. You know the type: They are rarely satisfied with your work. They question every item on every invoice, then don’t pay until their second notice. They negotiate every project as a zero sum game. If this relationship is not a one-shot deal, then you have to keep losing in order to please them and that is unsustainable. Should you let this high-maintenance customer go?
The Problem
First, query your team and define all the ways this client makes trouble for you. Do any of the following sound familiar?
Communication: You need their input to deliver their custom solution, but they avoid participating in the process. They refuse to tell you how they want to receive communication then complain they missed an update. They expect immediate responses from you, but they ignore your questions. Their vague, last-minute changes disrupt your service to your other clients.
Deliverables: They scope creep by regularly asking you to do more work than you agreed to and they don’t want to amend your contract. They complain you don’t do enough for them even when the deliverables in the contract are met.
Payment: They question every invoice. They ask you to lower your fees. They chronically pay late.They have threatened to take their business elsewhere more than once.
The Assessment
Now that you know what the problem you are solving for is, determine how bad the problem is. What is the impact on these areas?
Finances: Are they a significant source of your income, or are they actually costing you money with their late payments, demands for discounts, and scope creep?
Resources: How much of your team’s time, energy, and attention does this client take? How many other clients could you serve if you reclaim those resources?
Stress: How much frustration do they cause you? How much do your coworkers worry about this particular client? How far does your team’s productivity drop when working on this customer’s projects?
The Preparation
If the negative impact has outweighed the benefits for at least one year, then it’s time to consider ending the relationship. How should you proceed?
Look at Your Data: Do a cost analysis. Over the course of the contract how much of your organization’s resources were spent on this customer? For every team member, note all the time spent on internal and external communication as well as the actual work on the project. What is the percentage of everyone’s total hours worked? Show these numbers broken down by team member in a report. This unsustainable loss is the main reason you can site for ending the relationship.
Review Your Contract: Understand the terms of your agreement, especially regarding termination. This will help you navigate the process legally and ethically.
Visualize Your Encounter: See yourself explaining to your client why you’re ending the relationship. You are confident. You are not angry. You are calmly and tactfully getting right to the point. You are stating how it’s in the best interest of both parties to go your separate ways. Now rehearse out loud what you’re going to say.
The Conversation
All the analysis and preparation has lead to this. What is the best way to break the news?
Schedule a Meeting: Arrange a time to speak with the client. Face-to-face is ideal, but a video chat can also work. You want to see as many of their nonverbals as possible.
Be Direct and Polite: Start by acknowledging the positive aspects of the relationship, then explain why it’s no longer working. For example, “I’ve enjoyed working with you over the past year, but I feel that our working styles and expectations are no longer aligned.”
Focus on the Business: Emphasize that the decision is based on what’s best for your business. Pull out that cost analysis you worked so hard on.
Offer Alternatives: Suggest other professionals who might be a better fit for the client’s needs. Before offering this, ask those other professionals if they are willing to meet with this client.
Keep it Professional: Stay calm and composed, even if the client reacts negatively. Avoid personal attacks and blame. Take a deep breath, settle your emotions, and focus on the process. Your goal is to end the relationship on as positive a note as far as it is up to you.
The Aftermath
The hardest part is over. What loose ends still need tied?
Wrap It Up: Send your now former client an email summarizing the conversation and confirming the termination of the relationship. Request immediate payment of their final invoice. If there are any remaining tasks, clarify who will handle them. If they seemed interested in your suggestions of other companies who may be a better fit for them, include their contact information.
Move Forward: Use this experience for process improvement. Now that you know where your team’s boundaries are, communicate them to potential clients from the beginning of the relationship. This will help you vet them. For example, if they complain to you about the company they work with, then expect them to complain about you when inevitable conflicts arise. When it’s time to draw up a contract, include details on expectations for communication, deliverables, deadlines, and firm payment terms.
Have you ever had to fire a client? Please share your experience in the comments.