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5 Customers You Should Fire
 

In 18 years of running my own business, I've found it's important to know when to turn the tables and fire a client. Here are those five times.

The Sword of Damocles Scenario: The client warned, our recommendations had better be spot on or we'd be fired.

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You may know Inc.com as I do: It's a veritable treasure trove of best practices when it comes to attracting and retaining key customers. Important stuff--no question. But, to be honest, in the 18 years of running my own business, I've found it's equally important to know when it makes more sense to turn the tables and fire a client.

Here are five types of clients whose behavior caused us to exercise the 30-day termination clause in our contracts. If one or more sound familiar, I recommend you do the same:

1. The "skin in the game" client.

These are typically first- or second-stage start-ups that expect their vendors to share in their risk. So, they'll not only ask you to lower your fee and accept the difference in options, but they'll also expect your team to work 24/7 just like their minions. We've learned over the years that these relationships almost never work and, indeed, often turn ugly when grandiose expectations aren't met.

We fired one of these "I expect you to be available to me at all hours" clients after only two months. And, I'm glad we did. Life's too short.

2. The "fear-factor" client.

We walked away from one very-high-profile client because, frankly, they used fear to motivate their agency partners. Our account team was told at the start-up meeting it had only one chance to fail. So, the client warned, our recommendations had better be spot on or we'd be fired. Needless to say, this sword of Damocles scenario frayed everyone's nerves. The team was afraid to suggest out-of-the-box ideas in case the client might not like them. And, in turn, the client began complaining that we weren't being edgy enough.

So, when a competitor approached us, we fired the fear-factor customer and began a healthy relationship with another blue-chip organization that continues to this day.

3. The "check's in the mail" client.

Some clients think we're their bank. So, they'll ask us to front their out-of-pocket expenses. Or, they'll ignore our 30-day payment terms. As every entrepreneur knows, cash flow is the lifeblood of any business, so when a client starts abusing the financial aspect of the relationship, it's time to have a come-to-Jesus conversation.

We ended up firing one very prestigious client because they were decimating both our cash flow and profitability. Our accountants and lawyers still use it as a case study with their other clients.

4. The "expletive-deleted" client.

The CEO of one white-hot client company swore like a longshoreman. We let it slide in the first few meetings, but, after the third incident, I told him it had to stop. He said he understood and publicly apologized to the account team. Then, sure enough, in the very next meeting, he dropped more f-bombs on Peppercomm than the Allies dropped bombs during World War II.

I sent the CEO a note terminating the relationship, to which he e-mailed back: "This is complete and utter bullshit!" That line has now become part of agency lore and is often trotted out as a joke in internal meetings.

5. The "I always win, you always lose" client.

I believe that success and failure should be a shared experience between client and agency. When the agency scores a major victory, it should be celebrated as a team effort. And, when something goes awry, there shouldn't be any finger-pointing on either side. We fired one client who continually merchandised our successes as her personal achievements yet was always the first to point the finger at us if something didn't happen as planned (i.e., the client's product was omitted in an industry roundup story, etc.). One frustrated employee after another asked off the account.

So, rather than risk losing our talent, we terminated the prima donna client. And, I must admit, I enjoyed doing the deed.

The best thing about firing abusive clients is the morale boost it provides to employees. They know their paychecks are tied to the firm's billings, and that every client dollar is precious. So, when you step up and fire a bad customer, you win the troops' trust, loyalty, and respect.

Firing a client may mean a short-term hit to the organization's profits, but it's critical for the long-term emotional health of the organization. Try it. I have a feeling you'll like it.

Last updated: Jan 16, 2013

As co-founder and managing partner of Peppercomm, STEVE CODY is responsible for overall agency direction, management, and new business development. He is the author of What's Keeping Your Customers Up at Night?
@RepManCody




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