Fire A Client?

Posted on May 9, 2010

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Should you ever get rid of a client? I don’t know how you would answer that question, but I can tell you that I would answer it differently after reading Patrick Lencioni’s “Getting Naked.”

In the current economy, there are many reasons why businesses would want to keep any client on the books. Clients lead to revenue. Revenue leads to paychecks. We like paychecks. Many of us would say that we don’t have the luxury of selecting only the best clients. 

Lencioni raises a good question, however: Should we get rid of bad clients? Before we can answer this question, we have to define the word “bad.” Is a bad client a customer who berates you or your employees? Is a bad client someone who monopolizes your time? Is a bad client someone who you lose money on trying to accommodate and serve?  The answer could be “yes” to any of these questions.

The argument is strong, “Having a bad client is better than having no client at all.” Who will argue with that?  However, let’s consider three reasons why Lencioni states we need to consider firing a bad client. These statements made me think; perhaps you will find reason to ponder too:

1.  Bad clients prevent you from finding other good clients

Bad clients, particularly those who monopolize your time or emotional energy prevent you from reaching out to, and serving, potentially new clients who could be more profitable or help you accomplish the purpose of your organization. Many businesses will run with a capacity based on the size of the staff or self-imposed limits of growth. A bad client can handcuff an organization.

2.  Bad clients are unlikely to give you a good reference

One of the best means of advertising is a satisfied client. A satisfied client will often share the good news of your service and readily provide a referral.  It is certainly true for me; there are several businesses that I quickly refer to friends because I value the product or service these businesses offer.  A client that is often complaining, who is never satisfied, or who continually finds fault with your services or employees is not likely to endorse you or your business.

3.  Bad clients make employees feel bad about coming to work

I had brunch with my daughter, Amber, last month at Front Page News in Little Five Points. The chicken & cheese biscuit was superb; the time with my daughter was even better. She is a senior at Georgia State University, studying economics. She is also working her way through school by working at a local restaurant.  As we were talking she shared the perfect example of what Lencioni states here.

Amber shared how their restaurant runs a special every Sunday evening.  The special is a buy one, get one. As a result, the restaurant is flooded with diners eager to get a great meal at a greatly reduced price. The problem, however, is that the promotion attracts people who are not only looking for a deal, but who are simply “cheap.” On Sunday evening, the tips for the servers fall well short than any other night—and this is off the reduced bill. These patrons apparently are clueless that a tip should be paid off of the bill as if there was no discount. Furthermore, these Sunday evening deal-diners are more demanding and less cordial.

My daughter shared that none of the servers wanted to work Sunday nights. They would work harder and make less money. It began to create an employee morale problem.  Fortunately, the management, who valued their employees, tweaked the special; a gratuity was automatically added to the discounted bill. Now the clients would still get the discounted meal and the servers would be adequately compensated.  Did this move upset some of the diners? Absolutely! Did they lose a few patrons, (clients)? Most likely. Was it the right move? The answer is a resounding “Yes.”

One of the repeated mantra’s of business is that the customer is always right. I don’t fall in line with that cliché. The customer is not always right. Sometimes they are wrong. They can be wrong in what they expect. They can be wrong in how they treat our employees. They can be wrong in how they fail to pay their bills. Customers are not always right. I would much rather lose a bad client than lose a top employee.

In our business, I don’t think we have ever fired a client. My desire is that we never need to. Yet, Lencioni does make me think. If the situation demands it, I hope I will have the fortitude to do it.

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