o you have clients who waste your time, are rude to your staff and always argue over pricing? Clients like these, who cause you to lose sleep and pull out your hair, are costing you money and causing stress. Successful shop owners know when it’s time to release a problem client – and how to do it without hard feelings.
“One of the biggest benefits of periodically evaluating your client lists is to see who’s spending more or who’s just using you for the lowest price or is a client and doesn’t have growth potential. Evaluate these lists using the 80/20 rule – that 80% of sales come from 20% of your clients.
You could eliminate the bottom 50% of those clients and reallocate that time to clients who come to you for your quality and service. Now, you can increase your sales by providing more service and attention to your top 20% of clients, without increasing your work hours.”
- Shawn LaFave, president of NGA Promotions
Running a successful, profitable business means making the hard decisions, which includes letting go of that fear that keeps you holding onto unprofitable clients. If releasing clients is uncomfortable or difficult for you, we have tips on ending a client relationship professionally, so you can focus on the profitable opportunities ahead for your business.
4 Signs It’s Time to Let a Client Go
1. The Client Isn’t the Right Fit for Your Business
If you’ve ever been in a relationship that wasn’t working, there was probably a moment when you realized that you just didn’t want to be around that person anymore. The reasons could vary, but the bottom line was you just didn’t mesh. Client relationships can be the same way.
“If you can't serve the client in the way that they should be served, kindly step aside and refer them to another business or just tell them that you can't fulfill their needs and they would be best served elsewhere,” says Michael Nova, director of Nova Custom Label Printing. “Try to help them find a vendor if you have free time, because karma is a good thing!”
For some shop owners, having the same values or priorities in life is necessary to work well with a client. The mentality of “I’ll take any client as long as the check clears” can be detrimental to your business. It can lead to doing jobs that violate your personal ethics and value system. If you get bad vibes or just the feeling that you aren’t a “good fit,” then it’s better to end the relationship early.
“If this client is always asking you for a product that’s not something you typically do or know how to source, they’re not a fit,” LaFave says. “ Processing orders like this take 30% to 50% longer because you’re either learning as you go or dragging your feet because you don’t want to deal with it.”
- Michael Nova, director of Nova Custom Label Printing
2. The Client’s Disrespectful of Your Business Practices
You know the customer who monopolizes your time or doesn’t get back to you with pertinent information. They’re actually disrespecting how your shop functions. “It's hard to quantify this, but the reality is time is money,” says Alison Banholzer, owner of Wear Your Spirit Warehouse.
“If they’re slow to respond to quotes, artwork proofs, or simply like to chat you up for hours when in your shop, they’re costing you money. We’ve also let customers go because they are rude to staff members, or we simply can’t seem to make them happy no matter what we do."
- Alison Banholzer, owner of Wear Your Spirit Warehouse
3. The Client Doesn’t Want to Pay Your Prices
Think of this as cost analysis for you. Are you naming your price, but then lowering it to satisfy an argumentative customer? Chances are, they’re taking advantage of you, and you’re giving in. The next time they place an order, state your price and stick to it. If they balk, then it’s probably time to walk away.
“If you’re running your shop correctly, this shouldn’t happen,” LaFave says. “You should have an agreed upon-price for your services for each order prior to production. If a client continually comes back saying your price is too high or quality is subpar, evaluate the order to confirm it’s the best possible product you can produce and if there was anything that wouldn’t meet expectations. If that’s all good, then you probably didn’t set the right expectations with the client before sending the invoice.”
4. The Client’s Rude and Disrespectful
Every business needs rules for acceptable behavior and boundaries. If a client is rude or disrespectful to you or your team, call them out on it. If the inappropriate behavior continues, sever your relationship with them. You don’t have to take abuse from a client – nor does your team – no matter how much a person is paying you!
Once, Banholzer walked into her showroom to find a customer being exceptionally disrespectful to one of her employees. “I told them they’re not welcome in my shop anymore, and to take their business elsewhere,” she says. Then, this customer ran to social media to blast Banholzer’s shop. ”But my amazing customers jumped to our defense,” she says. “We even gained a large customer from the exchange because they had also had a run in with this person!”
Remember, though, sometimes people may just be having a bad day. “You have two options,” LaFave says. “Listen to what they have to say and do some soul searching to see if they’re right and your shop made a mistake. However, if this client is rude and disrespectful with more orders than not, decide if it’s a client you want to work with and keep or just release them and let them be someone else’s problem.”
How to Release a Client in the Best Possible Way
The first step is figuring out that the relationship isn’t working. The second is ending things as quickly, smoothly and professionally as possible. Here are professional and, hopefully, stress-free ways to end a client relationship:
1. Be Proactive:
Start by defining what your ideal client looks like. When you have this image in place, many times you’ll know from the beginning if the client meets those minimum requirements. If they don’t, or if there are a lot of red flags in the initial meeting, simply walk away. Don’t start a working relationship with them.
For current customers who are becoming more difficult to work with, you could consider making adjustments to the ordering process, that accounts for the extra lift it takes to deal with them. “Itemizing everything, line by line, on the quotes or invoices helps them understand everything that needs to be done to complete their order,” LaFave says. “You can add extra setup or processing fees due to the extra time it takes to work with that client. They won’t qualify for any discounts and they need to pay 100% upfront before you add their order to the production schedule. You can also extend lead times from two weeks to four, which gives you more freedom to produce their order.”
2. Have a Plan:
Don’t just barge into your meeting and proclaim, “This isn’t working anymore!” Have an idea of what you plan to say. Don’t bring up a list of all the problem spots that have led you to this decision. Instead, focus on the positive. Point out places where your working styles don’t mesh and let them know your goal is to pair them with a shop that can better meet their needs. You can even offer a referral.
“Being proactive makes you look like you have the customer’s best interest at heart.”
- Tanya Doyscher, owner and graphic designer at The Visual Identity Vault
“For instance, as a shop, you’ve gone in a different direction, added or taken away a product or service, or changed minimums. By identifying these reasons ahead of time, you can contact the customer as a ‘favor’ before they need that product or service. This also offers an opportunity to set new expectations about what you can do for them in the future, if anything. The customer ends up with a positive feeling, rather than irritation or unhappiness.”
3. Be Nice:
This might be a tough situation, so you don’t want to add to the problems by coming in with a chip on your shoulder. Instead, be as kind as you can in explaining why things aren’t working out. “Avoid being confrontational,” Nova says. “There’s no need to go into specifics of how you feel you’ve been disrespected, unless you feel it might help them when they work with future vendors.”
If the client still has an open order, either offer to refund their money or to complete it with the understanding that it’s the last one you’re taking from them. Whatever the circumstances, handle the breakup as professionally as possible.
4. Get to the Point:
Don’t let the meeting linger on. Keep it short, sweet and to the point. Make sure the relationship wraps up as quickly as possible. If you have one last order to fulfill, make it a priority to finish it up quickly and efficiently so you can move on to new business.
“Try to avoid escalating the situation further. Many times, these types of clients are poisonous and aren’t afraid to go on a rant with everyone who’ll listen. We haven’t had to do this often, but were direct and to the point that we couldn’t fulfill their needs and offered them some names of other shops that might.”
- Tanya Doyscher, owner and graphic designer at The Visual Identity Vault
Sometimes you don’t need to let a client know you’re letting them go. “Typically, most problem clients are commodity buyers, which means their orders are just transactions,” LaFave says. “If they just can’t get the hint, do a client review with them. You can set expectations during this time as to what you believe would make this client a better client. If they’re not on the same page, they’ve made the decision for you.”
Time to Attract and Keep Great Clients
Ending a working relationship isn’t easy. Sometimes determining if you need to end that relationship isn’t simple, either. Using these guidelines will help you tell which clients aren’t benefiting you and how to cut ties, so you can move on to clients who are a better fit. “Common courtesy and respect between vendor and client is essential to move forward with any business relationship,” Nova says.