Why Some Clients Are More Dangerous Than Others
You see, not only do I believe that firing clients can be good for your business. I believe that firing certain clients can be essential for your business.
This Innovation Advantage blog is usually about creating innovative customer touchpoint experiences that will drive more customers, more revenue and more growth in your business.
But the trick is to drive more ideal customers to your business.
And no amount of value creation, innovation or differentiation will matter if you allow the fox– or even worse the foxes– to take up space in your customer henhouse. (The hens being those ideal customers who are a perfect fit for your business and the foxes being those one or two dangerous customers who can, unfortunately, bring the entire henhouse crashing down around you.)
The good news is that there are 5 situations where, in my experience, not only is it okay to fire a client … but where firing that client is essential to the long-term survival of your business.
Five situations where the best option is to ‘Just Say No and Let ‘Em Go’.
Situation #1: When working with the client is a no-win situation
You know who I’m talking about. Those customers where no matter what you do, you will never be able to make them happy. Customers whose expectations are so high that they can simply never be met. Customers who seem to thrive on creating problems and for whom the words ‘high maintenance’ don’t even begin to tell the tale.
And even when the little voice inside of your head screams ‘This doesn’t feel right. Walk away now.”, most of us don’t.
Because often these no- win clients are more than able to pay for your products or services. And it’s hard to walk away from that kind of revenue just because the little voice inside of your head is having a bad day.
Now I’m not saying that you shouldn’t take on any difficult clients. Difficult clients are part of running a business and running a business is difficult.
What I am saying is that unreasonably difficult clients can be bad for business.
Because there’s a big difference between a client whose expectations are completely justified and a client who is just never satisfied.
The energy that it takes to keep these no-win clients happy is simply not worth your time. More importantly, the damage that an unhappy client can do to your business both during and after the customer relationship is simply not worth the money.
I know. I’ve been there. And the best thing that has come from that experience is that now I know exactly which customers I need to avoid. So…
Situation #2: When working with the client won’t be profitable
Now, this is a tricky one because it totally depends upon your definition of profitable.
For example, what might be considered profitable in the early years of your business may be different than what profitable means 5, 10 or even 15 years down the road.
Perhaps your definition of profitability is more focused on profit margins and the net/net bottom line.
Or perhaps you include softer measurements like exposure, referrals, test cases or any other mix of bonuses that can be considered a win for your business.
The key is to make sure that you know what your definition of profitable is for this customer and this mandate so that you can stay in control of the negotiating process. So that you can honor the value of your products or services because if you agree to a bad deal, it’s not the client’s fault. It’s yours.
And if you end up regretting the deal, it won’t be good for you and it definitely won’t be good for your customer. So …
Situation #3: When taking the business would water down your brand
This situation is more about the type of mandate that a client could propose, as opposed to the actual client.
And if you are in the early years of your business, brand integrity may not be at the top of your list of priorities. Bottom line? If you need to pay the mortgage, feed your family or send your children to school, take the business and bring home the bacon.
However, if you’ve invested years in your brand’s positioning, taking business that is outside of the brand story can seriously dilute your brand.
I often say that your brand story is like an expensive bottle of wine and that every time you do something that steps outside of that brand story, it’s as if you had poured water in that priceless bottle of wine
(Ugh. I shudder at the thought.)
For example, I have spent years developing a positioning as a customer experience innovation expert. It is all that I do. And although it covers a pretty broad spectrum of products and services, I simply don’t accept clients whose mandates don’t fit comfortably within that expertise.
If tomorrow someone asked me to do a session on team-work, managing stress or economic trends, it’s not that I couldn’t do it. It’s that to accept the mandate would be like taking my very expensive bottle of wine – wine that has been carefully conserved in my wine cellar for years – and pouring it right down the drain.
Of course, there could be a good strategic reason for taking work outside of your brand. Perhaps, for example, the work is an area that you are looking to move into. Or perhaps taking that business is the key to opening the door to a mandate that is in your wheel house. But for the most part…
Situation #4: When taking the business means you can’t be authentically you.
Pam was a successful young entrepreneur who attended one of our “Attract, Keep and Engage More Customers” workshops.
As we chatted together, Pam explained that she was part of an extremely traditional and conservative industry. The authentic Pam, however, was neither traditional nor conservative and yet she had spent years trying to fit in.
It wasn’t that Pam’s business wasn’t doing well because it was, bringing in well over one million dollars in sales annually.
But Pam confessed that she was miserable. She was tired, exhausted and ready to give up.
She didn’t like her customers.
She didn’t like the work that she was doing for her customers.
And she definitely didn’t like running the business.
Pam left our session with renewed courage and clarity and in the few short weeks that followed, she went from fitting in to standing out. She transformed her business in ways that put the authentic Pam – and therefore Pam’s authentic business – out there for everyone to see.
Within the first 6 months, Pam used our Five ‘S’ Solution and her newfound authenticity to exceed projected revenues by 27% and increase the money in her pipeline by 39%. And, a few years later, Pam sold her business for a ton of cash and moved to live her dream life in California – all because Pam refused to play small and to settle for a business model that attracted customers with whom she couldn’t be her authentic self.
Situation #5: When for whatever reason, you simply don’t want to work with that client.
As business owners, I think we struggle with the idea that we have the right to say no just because it feels like the right thing to do.
For example, once I turned down a big client because of what I had witnessed when I went to a meeting at their office.
I was shocked. The lack of respect and consideration was palpable. They were disrespectful to their staff and made negative comments about their clients.
Our values were not a match and I strongly believed that if I took the business, I would live to regret it. I guess we’ll never know but I certainly never regretted walking away.
You might not want to do business with a client because
- you don’t share their values,
- you don’t support their industry
- or simply because you have a bad feeling in the pit of your stomach. But…
The No #1 Reason You Really Need to Fire More Customers
Do you want to know the real kicker about taking business in any one of these 5 situations?
Bad clients are like rabbits.
They make babies.
And lots of them.
The client you gave the deal of a lifetime tells their colleagues and they want the same deal.
The client in the industry that you can’t support tells his friends in the same industry and they want to work with you too.
The client that hired you to do something that dilutes your brand sends you more clients with more work that dilutes your brand.
You get the idea.
Bottom line? Whether it’s clients you have or clients you could have, letting go leaves room for letting in.
And as long as you are determined to hold on to the foxes that are taking up the valuable space in your hen-house, there won’t be room for any more hens.
So the next time you think you have some foxes in your customer henhouse, remember, firing customers can be great for business! All you need to do is…
Imagine the Possibilities!