When to Fire Your Client

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After nearly 20 years of working as a contractor, advisor, consultant and business owner I have learned is that clients and customers are not all created equal. As we struggle to expand our business we sometimes latch on to every client we can find and then hold on so tightly that we forget that one basic lesson “not all clients are created equal”. It is a harsh reality that we don’t like to admit but there comes a time that you have simply fire a client. Yes “Fire The Client”!

If 3 of the following five signs are present in any of your working relationships, I strongly suggest you fire that client. Chances are, they are impacting your bottom line and your personal sanity.

1. They Stop Respecting You

Do you remember when you landed them as customer? Did everything out of your mouth seem like gold to them, like words of wisdom from some guru high on a mountain top? We all knew this honeymoon won’t last forever. There will come a time when your words no longer carry the same weight and, in fact don’t carry any weight at all. Instead of looking at how to implement your ideas, or merely asking for some clarification and justification for them, the clients starts demanding more. You’re met with responses like, “Well I checked with my wife’s brother’s friend’s son who took a course on it last year and he said we shouldn’t be doing it that way. Why do you think we should?”, or, “I was at a party the other night an overheard a conversation and they said everyone should be doing X – I’m not sure what it is, but I need you to implement it now”.

In either case, they are now valuing the opinions of strangers who don’t know the ins and outs of their business more than you do. There is nothing ever wrong with your clients getting a second opinion, but when they put more value in the opinion of strangers, you know you have a relationship problem.

2. They Don’t Value Your Time

Many business owners forget that time is money and you can’t waste time making the client happy. Just think how many times you’ve shown up on time for meetings, and they make you wait. Start tracking those 10, 15, and 30 minutes when the meetings don’t start on time, or when they keep going after the scheduled end time. You might not mind if you are billing them by the hour but it shows they don’t value your time as much as they value someone else’s.

Along these lines if your client is within a reasonable commute, how often do they insist you come into their offices for a physical meeting when a telephone meeting would have sufficed? Start adding up all the travel time plus the meeting time and you’ll quickly see that a 1 hour meeting is actually eating upwards to a ½ day of your time. Is the client getting invoice for a ½ day consultation? (See point 3)

3. Questioning Your Time

When generating client invoices always make sure to invoice for all the meetings, emails and phone calls. Do they question these times? I had a client once who kept saying, “When I call you, you have the answer I want in generally less than 30 seconds how come you’re billing so much?“ This is not an unreasonable question, but how they respond to your answer is an indicator that it might be time to think about “firing the client”. My typical answer is, when you call or email, I have to stop what I’m doing, respond to you, then remember where I was and start up again. All this takes time. The fact that I know the answer off-top of my head is because I work at keeping up to date. I read about the field all day long and apply what I learn to your needs and therefore I need to charge for that effort.

From previous tracking efforts, I typically now allocate a minimum between 10-15 minutes for every client phone call or email that I need to respond to.

4. You Are Working for Pennies!

In the world of consulting and project work, we are frequently required to do our best efforts at estimating how much time something is going to take and provide a fixed quote for it. If you estimated wrong that’s your fault and not the clients. Yet there are many clients who will try to take advantage of the fixed price and try to squeeze additional deliverables and then play the helpless game (“We need this little thing done as well, but I don’t have budget. I know you can help us”), which works extremely well if the client’s reprehensive is an extremely good looking person of the opposite sex.

I don’t advocate saying no to everything, but start keeping track. All those little things add up very quickly and you might see what you thought was a decent hourly rate start dropping to a level you wouldn’t have never taken on the job for. Remember time is money and time not spent on the needy (and unwilling to pay client) is time not spent finding a more profitable clients.

5. Where Did the ROI Go?

Think about how you felt when you landed the client/project. Did you see dollar signs jumping up and down? Make sure to keep track of everything related to the project (see points 3-4). On a monthly basis, add up all your costs and compare them against your billables. Now calculate your ROI. Is this the kind of return on your investment you were planning on at the start? If not, you need to talk to your client about rate increases or other forms of compensation for your time. Do this according to the terms of your contract as the contract comes up for renewal. Is the client willing to work with you on a new rate? Are they inflexible? How does the ROI compare to your other clients? Can you easily replace this client with higher ROI clients if you had more time to do so?

Ultimately all parties have to make a reasonable profit (ROI), and if the client doesn’t think your ROI is worth it from their perspective, most likely they’re not the client for you. Rest assured your client is thinking the same thing about you with every invoice they pay. Did I get my money’s worth from this? Remember, if you’re not delivering you know they will fire or drop you as soon as they can.

While there is no absolute 100% proven method for knowing when to fire the client, most of us will realize we should have done it sooner than later. By looking out for the above symptoms they might give us the wakeup call sooner than later. Of course when it comes to firing the client there are right and wrong ways do it. We’ll cover how to do that next article.

Alan K’necht
Alan is public speaker, corporate trainer (SEO, social media marketing & digital analytics), award winning author, and an online instructor for the University of San Francisco's on-line Internet marketing and analytics programs and the head of their Advanced Analytics course. He also co-hosts of the weekly Twitter Chat #SocialChatBe sure to follow him on Twitter: @aknecht
Alan K’necht
Alan K’necht

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  • http://www.straightnorth.com/blog Brad Shorr

    Hi Alan, Great post that touches on lots of identifiable situations. When I was freelancing I had occasion to walk away from business, usually because of #4. I tended to undervalue my time to begin with, and certain clients always feel like they are paying too much. Sometimes you reach a point when it’s just not worth it, but it’s a hard decision to make. Another thing that happened to me was that my business model changed fairly significantly over the course of a few years. Clients I had from the early days were no longer a good fit with what I was trying to do. This can also be a problem, I think. When you start to think of a client as a distraction from your core business, it’s a warning sign.

  • http://twitter.com/#!/brickmarketing Nick Stamoulis

    I don’t want to work with someone that isn’t going to respect me or my employees. I am more than happy to walk you through the reasons of why we do something, but at certain point I don’t want to be defending myself in the same situation month after month. If you weren’t going to trust me to do this job, why hire me in the first place?!

  • http://www.accidentlawillinois.com Barry Doyle

    You never feel quite so good as you do when you fire a client who deserves it.

    In my firm, I know when it is time for a client to go when my blood pressure starts to go up when I see your name in my in-box or caller ID. Doesn’t happen much, mostly because we work hard at setting expectations and have rules about client communications, the most important being no unscheduled incoming phone calls, mostly to avoid having to drop what we are doing to tend to a phone call. We do all this at the outset so we end up with few client communication problems.

  • http://www.marcensign.com/blog Marc Ensign

    The big red flag for me is when the client starts running the project. When they start insisting they hold the mouse I make a run for the hills!

  • http://www.websites4accountants.com Norm

    I actually heard one client use racial slurs when talking about stock photography used on their website. Queue The Don; “Your fired!”.

  • http://www.5280creative.com David Skul

    “While there is no absolute 100% proven method for knowing when to fire the client, most of us will realize we should have done it sooner than later.”

    Wow is this ever a truism and If I had a penny for every client I should have fired I would be a rich man. This is a great article keep up the good work and I look forward to seeing how you go about firing them.

    David Skul

  • http://www.articlemoz.net Tarun Saini

    Yeah completely agree with you Alan… Every client use to follow these things when you spend 4-5 years with his project and even some clients use abusive words also for you that really hurts when you work for him with your full dedication and in last you have you face such sorts of things.

  • http://www.CaseyMeraz.com Casey Meraz

    Thanks for this article Alan! I have a client that meets all of the criteria above. Although it’s rare for me I have found that the clients you need to “fire” are typically the ones that pay the least and expect the most. It’s so important in this industry to set proper expectations for your clients and charging accordingly. Finding work on Craigslist or underselling yourself can be a big no no.