How to Fire a Client (Amicably)

Don’t hold on to a bad customer relationship just because you don’t know how end it. Try these proven tips instead.

 
Written by PROFIT Staff

A good client can earn you millions in revenue and boost your profile. A bad client can cost you time and resources and make your working life miserable. But telling a customer you no longer want to do business with them can be a daunting task. Recently, we asked readers and experts on how to end a client relationship that just isn’t working out. Here are some of our favourite responses:

1. Don’t be a pushover

“A problem client can be utterly toxic. When your gut is telling you a client is more trouble than they’re worth, it’s time to act. I recommend three things. First, use what psychologists call €˜feeling’ statements, which avoid assigning blame. Try phrases like, €˜This is causing me a lot of stress’ or €˜I feel I’m not giving you what you need.’ These statements are inarguable, and they tend to reduce conflict. Second, have a plan for pushback. No one wants to be dumped, and clients will often defend themselves and promise to change. If you’re not prepared for that, it’s easy to acquiesce. Finally, have a plan in place for the tactical execution of the breakup. You need a plan for what you’re going to do about things like documentation, billing, NDAs and protocol. This will help you get through the more awkward elements of the conversation, because it will get the customer thinking of file folders and logistics instead of, €˜How dare you!'”

Naomi Dunford, founder, IttyBiz, London, Ont.

READ: Is It Time to Fire Your Client? »

2. Tell them the truth

“Start by being clear about why the relationship doesn’t work. Does the client conflict with your core values? Do their behaviours not work well with yours? Are you losing money on them? If you tell a client, €˜Look, we’re selling you something for $1,000, and it costs us $1,200,’ it’s pretty easy for them to understand. You have a reason that’s tangible, not subjective. You’ll lose the business, but you won’t damage the relationship.”

—Kevin Lawrence, strategic advisor and coach, Vancouver

READ: The First Step to Growth: Fire Your Clients »

3. Set a timeline and stick to it

“Set up a meeting in person or at least over the phone. Never end a client relationship by e-mail. That’s just not professional. When you do deliver the news, give them a list of steps and a timeline of how you’ll phase out the relationship. For example, €˜Here are the five deliverables we’ll give you over the next two weeks, and here are the three actions you need to complete to make this transition go smoothly.’ And if they violate those terms or stretch things out— which often happens if they haven’t lined up a replacement—tell them your rates will be higher. There needs to be a financial incentive for them to uphold their end of the bargain.”

—Nick Reese, co-founder, Broadband Now, Nashville

4. Make them think it’s their idea

“If you can swing it, the best way to end a client relationship is to make the client feel it was their idea. You can do that by presenting an attractive option that will allow you to stop working with them altogether or at least cut back. That could mean finding a more suitable company to work with them. You could say, €˜You know, we could continue to work on the project, but there’s another option that would save you money.’ The client will usually say, €˜Oh, great, we’ll do that.’ That way, you’re rid of the client, and the client is happy. It can even make you seem altruistic.”

—Evan Horowitz, Evan Horowitz Advising, New York

READ: The Good Way to Deliver Bad News »

5. Lose your ego

“A lot of small-business owners just don’t want to hurt their clients’ feelings. But you know the expression, €˜Hire slow, fire fast?’ The same is true in ending business with a client. And at the end of the day, the customer is always right—even when they aren’t. So put the blame on yourself, and get your ego out of the way. If it saves your company a bad review or a burned bridge, or simply avoids that awkward meeting at the local coffee shop, you’re better off.”

—Terri-Ann Cormier, president, Executed Solutions, Rothesay, N.B.

This article is from the Winter 2014 issue of Canadian Business. Subscribe now!

Have you had to fire a client? How did you do it and what happened? Share your thoughts by commenting below.

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Originally appeared on PROFITguide.com

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