Let's face it, some clients just suck. It's ok to not like all your clients. After all, it's really hard to be all things to all people.
As business owners, we work hard to land a new client, then we work to develop a strong client relationship and produce good work. So the thought of firing a customer seems counterintuitive. However, to grow your business severing a few relationships is actually healthy.
The real cost of that client may actually be greater than the revenue they generate. Here is why you need to say good-bye to a few clients and hello to your sanity.
As business owners, we work hard to land a new client, then we work to develop a strong client relationship and produce good work. So the thought of firing a customer seems counterintuitive. However, to grow your business severing a few relationships is actually healthy.
The real cost of that client may actually be greater than the revenue they generate. Here is why you need to say good-bye to a few clients and hello to your sanity.
Bad clients:
1. Sap Time
We have all heard of the 80/20 rule, think of the clients who are in the 20% that are taking up 80% of your time. Are those clients top revenue generators or lower down the pack. If they are lower down, they are using up valuable time that you could use to generate new business.
The easiest was to identify a time waster is your immediate reaction when their email address pops up; do you cringe 'what now'?
When you think of time as money, if a client is using up more time than the revenue they generate, you need to either better manage that relationship or cut ties.
2. Sap Energy
There is nothing worse than a bully client. We have all had them. Your stomach turns when you have to deal with them. Your employees try to avoid the client and the issues just gets worse.
It is amazing how draining a bad client can be on morale, they not only sap time, but energy and creativity. A client of this nature is obviously not a good fit and can cost you more than lost revenue..think sleep, time and possibly employees.
3. Impact growth
If all your time is spent managing poor relationships it's not being spent growing your business. I know you think, if I lose that client I lose revenue. However, think of the opportunity cost; this is time you are not devoting sales, investing in better clients, developing employees, setting growth strategies and a million other things that are better for business.
4. Do Not Refer
Guess what, bad clients don't refer good clients, and generally don't refer at all. What is even worse is that a bad client is more likely to bad mouth you to others, either through their informal networks or on social media.
Referrals are like gold, they can be an easy sale, because someone you know has already helped sell you and your business. Devote your energy and time to clients who refer.
The overall health of your business, whether you're a company of one or 1,000, is what matters most. You can't take care of your audience when your company is a drowning, because you let some bad eggs through the front door.
Off-loading a bad client can be a delicate job, but disengaging can often be a relief to both parties. Many times a client is just not a good fit with your business. Sometimes all it takes is a honest, albeit difficult, discussion. Think of a break-up with the tears.
If you feel immediately ending ties will bring strife, begin developing a relationship-ending strategy. If you are under contract, sever the relationship when is that contract up or when is the job you are working on complete.
Whatever you do come up with a plan and don't let a few bad clients suck the life out of your business.
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