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Is it OK to fire a client?

youre fired

During a kick-off meeting recently for an engagement with a new client, I was talking with the owner of this market research firm and he mentioned that he had recently fired one of his largest clients – a Fortune 500 company that generated several hundred thousand dollars worth of business for him every year! Evidently, though, this client was overly demanding and downright abusive to his employees. So, his choice was… fire the client or risk losing some staff members. Wow! Tough situation.

And one I hear about far too often.

What do you think? Is it OK to fire a client… or do you believe that every bit of revenue is precious and worth holding onto, regardless of the ‘cost?’

According to those business executives we’ve spoken with, there are several ‘legitimate’ reasons for firing clients. These include:

  • For whatever reason, your relationship with a particular client is no longer adding to your bottom line, or at least not at a level it needs to.
  • “High maintenance.” For those clients that pester you all the time – that are simply a big pain-in-the-ass – it might be time to fire them.
  • “I need it now.” There are clients whose every request is followed by – “and I need it right away.” And you know that’s really not the case, but the client has learned to take advantage of your efficiency and your kindness.
  • “Abusive.” Like the story above, if a client is not treating your staff with the respect they deserve – because of some sort of superiority complex or because they’re simply not very nice people – it might be time to fire them.
  • “New direction.” You have one remaining (“old school”) client who still insists on doing surveys by mail (or some other outdated methodology) – yet, all of your internal processes and infrastructure that might support it are no longer in place. When you have moved on, it might be time to let the client go.

They all sound like very legitimate reasons… but would you fire a client if business was way down this year? What about during a downturn in the economy when acquiring new clients is so difficult? Hmmm…

What about firing a prospect?

By “firing a prospect,” I mean… have you ever turned down an opportunity to bid on a project with a brand new client, even when the scope of the work was in your wheelhouse and the prospect was in your target market?

I did this recently. Was I wrong?

The story… the founder of a firm in our industry reached out to me and we began the buyer/seller dance. After a couple of fairly lengthy telephone conversations to get to know each other a bit and uncover his needs, it became obvious to me that this business owner and I had very different opinions and philosophies about the value of marketing and sales to an organization and how they should be implemented.

And that’s OK… every business owner has their own opinion on how to best run their business. But it was evident to me that there was no way that we could achieve any level of success together because we had very different ideas about how to best go about it.

So rather than put our firm into what [I believe] would have been an uncomfortable (and perhaps combative) situation, I ended it… which, of course, came as a shock to the prospect.

However… for a couple of weeks now, I’ve been second-guessing my decision. “Should I have taken a chance and submitted the bid… or was I right to trust my instincts?” I guess we’ll never know.

Unlike firing clients – which comes after a track record of some kind – firing prospects really comes down to one thing: gut feel. That is, at some point early in the relationship, you get a sense that this potential relationship is not in your firm’s best interest or that, for some reason, there isn’t a good “fit” between you and the buyer.

Summary

Firing a client or prospect means saying “goodbye” to revenue or potential revenue… a very difficult thing for any business owner or executive to do. Revenue is, after all, the lifeblood of every organization. But it seems there are those circumstances that dictate doing just that… for the overall betterment of the firm (I think).

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