Is It Time To Break Up With Some of Your Clients?

20-Sep 2022
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Chelsea Williams COPYWRITER

You work hard to attract clients and set out to deliver value to everyone you could possibly reach. The thought that you might not be able to help all of them could be disappointing.

It’s a classic case of business FOMO: trying to be all things to all people because you fear what you’re missing by not jumping at every opportunity. 

A reluctance to turn down work could lead you down a path to excess or poorly matched clients, some of whom are costing your business rather than upping your profits. Tough as it may be to digest, the best solution could be to break up with those who aren’t helping to move your mission forward.

Below, we’ll review:

The Costs of Holding Onto Bad-Fit Clients

In your personal life, you may relate to the experience of keeping something or someone around for a little too long, even when you know it’s not the best thing for you. For a while, you can push through. But eventually, there will be real consequences.

The same is true in business. Clients who aren’t a good fit for your team or services may be a source of stress and tension, but they’re also probably contributing to tangible expenses if you look closely enough.

Strained Resources

It’s simply not worth it to expend a lot of time, energy, creativity and other resources on clients who aren’t experiencing the best possible outcomes. Stretching your team thin puts pressure on your people — and your bottom line.

In the midst of day-to-day work, it’s common to be unaware of the specific adverse effects of demanding clients on your team. You may even be likely to blame your employees for inefficiencies that originate from these problematic relationships. To avoid losing great team members and incurring the additional costs of employee turnover, investigate how incompatible clients could be contributing to their discontent.

Time Leakage 

Every moment your team spends putting out small fires for someone whose expectations don’t align with your services is a moment they could have invested in a better-fit, longer-term client. Plus, even short interruptions can make us twice as likely to make mistakes, so your team could be losing accuracy and time when they’re getting distracted by high-maintenance clients.

Worse, if you’re not tracking your employees’ time and closely monitoring billable utilization with an automated solution like Accelo, you’ll never know exactly how much you’re paying for this misallocation of minutes.

Higher Churn

Another major cost associated with dedicating time and resources to your least well-suited clients is increased churn. Not only could bad-fit clients be unhappy and more likely to leave, but your best clients could feel neglected, too.

Churn costs more than just the immediate loss of revenue. You’ll have to pay your team for all the labor required to sell to and onboard new clients to replace the ones you’ve lost.

Difficulty Attracting New Business

Finding those new clients can also be difficult if you’ve kept bad-fit clients for so long that they’ve become disgruntled. 94% of consumers recall a time when one bad review was all it took to make them avoid a business.

Thus, holding onto client relationships that aren’t ideal means running the risk that things will turn sour and they’ll reveal their grievances on a public review site or social media platform. In professional services, an industry in which solid connections are critical, the costs of negative attention can be immeasurable.

Luckily, all of the above are avoidable if you know how to pinpoint which clients are potential sources of trouble.

Which Clients Are Negatively Impacting Your Business?

For all the reasons above, and counterintuitive as it may seem, trimming your client base could be a smart move. But which clients need to go?

A client who isn’t a great fit might:

  • Expect you to bend or ignore your policies
  • Be reluctant to commit to timelines
  • Compare your contracts or offerings to their previous service providers 
  • Provide ambiguous direction on deliverables
  • Bog your team down with requests that result in scope creep
  • Fail to trust you and your team after you’ve successfully delivered what they asked
  • Make late payments more than once or twice
  • Be hard to get in touch with and communicate abruptly or rudely 

Or sometimes, your team and services just don’t mesh with a client’s values, preferences or personality — and you’ll figure that out pretty quickly. Initial difficulties, no matter whose fault they are, can be damaging. A 2020 report by Vonage showed that 51% of customers would never do business with a company again after a single negative interaction. Rather than forcing the relationship and risking a blow to your reputation, it may be best for everyone to move on.

☝️It’s much easier to determine which clients are draining your resources when you have robust, reliable data like you’ll find on Accelo’s profitability dashboard.

How To Compassionately Let Go of a Client

If you suspect you may have a problem with serving too many incompatible clients, you’re in good company. Gartner predicts that 75% of businesses will implement a “breaking up” strategy by 2025.

That doesn’t mean following through on that strategy will be easy. It requires an organization-wide understanding of healthy boundaries and getting comfortable with the idea that you can “fire” your clients.

When you feel ready to share the news with a client, you should first review the terms of your contract. Have you upheld everything you agreed to? Is there a legal process you must adhere to for termination? Even if it’s not compulsory, most clients will appreciate your team finishing their current project as a statement of good faith.

Once you’re clear to proceed with the breakup, document your reasoning in a letter. Personalization is important, but templatizing this process could be helpful if you’ll be splitting from more than a few clients in the foreseeable future.

Best practice calls for a follow-up call, in which you and your team should be willing to answer your clients’ questions honestly while maintaining professionalism. 

Finally, to show that you care about the client’s outcome, you might consider recommending another service or industry colleague that could be a better fit.

Keep Immaculate Records of Client Relationships 

You may not be used to having help with the act of ending a relationship, but a smart client work management platform can make you feel fully supported with this difficult decision. 

Get essential, detailed data about a client’s history of interactions, payments, projects and more to reassure you that they aren’t a great fit. Schedule a demo to see how Accelo could help you prepare to break the news.

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