When you first started your small business, you were probably overjoyed when you landed your first customer. You were grateful for the work, and their belief in you validated the reason you became your own boss.
Then you got your first bad client — you know, the one that makes you cringe when they call. The Mr. Nothing’s Ever Good Enough or the one who believes shouting into the phone is a perfectly normal way of conducting business.
Soon, you realize that the customers who are causing you grief are also costing you money. For all the time you’re spending trying to fix the unfixable, you could be pursuing your dream clients. Everyone has the occasional bad customer, yet it’s important to recognize when they’re costing your small business big.
Before you decide that firing a client is the right step to take, do your due diligence and plan for the event in advance.
1. Determine whether your client is actually terrible or just challenging.
Although both may drive you to tear your hair out, the difference between terrible and challenging client relationships comes down to communication and collaboration. Bad clients don’t respect your expertise, time, or work ethic, while challenging customers might simply have a work style that clashes with your own, or they’re dealing with unnatural levels of bureaucracy, or they’re likely raising the bar for the work you’re able to produce. For example:
- Terrible clients communicate on polar ends of a spectrum. You’re either dealing with the nonresponsive, disappearing artist or the clingy, nitpicking client who fires off 30 emails in an hour and phones, texts, and issues an APB wondering why you haven’t responded to their request to adjust a pixel on an image. Whereas challenging clients will respect your boundaries and give clear direction in terms of tasks and expectations, but perhaps their communication style might be lacking.
- Problem clients believe that every project is “easy and quick” because they don’t understand the complexity of what you do. The know-it-all client requires constant education and a constant defense of your fee and the time needed to complete the project. Challenging clients, on the other hand, understand and respect that they’ve hired an expert, and they’ll push you outside of your comfort zone to get the best-ever work of which they know you’re capable.
You can adjust your style and process to the challenging client, but the horrible one will never be a true partner.
2. Evaluate whether this is the right time to fire.
It may be hard to fire a client if your income depends on them, or if firing your client would be either unethical (that is, you’d be leaving them in a bind without a replacement) or a breach of contract. As a small business owner, if you’re just starting out, or if your pipeline is not full, it may be difficult to decide if firing a client is the right decision.
If firing the client is not the goal, then, as a first step to address the situation, you can raise your rates to pay for the pain (and throw in some small extras to counter the sticker shock). Or, you can offer a transition period where you volunteer to find and train your replacement. However, if neither of these tactics works, realize that the situation is only temporarily sustainable and map out your exit strategy. Think about how you felt when you gave notice at your 9 to 5. Create and commit to an end date and then the day-to-day won’t feel as terrible.
After studying all your alternatives, if you determine that firing the client is your best solution, we’ll show you how to cut the cord with the right plan and three stress-free scripts.
3. Observe the client-firing ground rules.
- Schedule a time to meet in person or chat via a video conference call. You met the client face-to-face, so it’s important that you give them the respect of ending the client relationship face-to-face.
- Don’t make it personal. This is a business decision. Show how ending the arrangement is beneficial to them.
- Be calm and professional. Don’t engage their anger or play the blame game. No matter how heated the conversation gets, be polite and professional. Your industry is small and people talk. Let them remember you were the graceful one in the situation.
- Set expectations for what comes next. Don’t leave them frantic and stranded, no matter how terrible they are. Remember, this is your reputation. Deliver all remaining work as defined by the terms in your contract and allow for a reasonable transition period.
4. Create the three scripts.
There are three routes you can take when firing a problem client. Customize the scripts when you speak with them, and always close with a solution and defined next steps.
- Script #1: You’re Shifting Focus. In this scenario, you’re letting them know that you’ll no longer be working in your field. “Cathy, it’s been an honor to work with you. I’ve been evaluating my business over the past year and I’ve decided to pursue [new focus] rather than [current work]. As a result, I need to reshape my client base to have more of a work-life balance while I focus on my new business direction. Unfortunately, I’ll no longer be able to work with you as of Y date. Please know that it’s been amazing working with you and I appreciate your understanding as I enter this new phase of my life. I know you have a lot of work in the pipeline, so I’d be happy to help you find another partner who can give your business the attention it deserves.”
- Script #2: You’re Raising Rates. In this scenario, you want to double (or more) your rate to guarantee you’ll price out your bad client. “Mike, it’s been a privilege to work with you and your team. I know you had other options on the table and when we learned you had chosen us as your partner, we were thrilled. Over the past [five years], we’ve achieved X and Y goals together. Recently, I’ve evaluated my pricing and have decided to change my rate structure. My business has grown astronomically over the past year and, to meet this demand, I’ll be changing my rates to X as of Y date. Let me know if this will work for you. If not, I’d be happy to refer someone who would be more in line with your budget. Please let me know if there’s anything I can do to make this transition period easier for you.”
- Script #3: You’ve Had Enough. “Jim, I really appreciate the opportunity to work with you. I’ve given this a lot of thought, given our partnership and how long we’ve worked together. Over the past few [insert time], I’ve noticed issues in our working relationship, and I’ve come to the conclusion that we’re not the best fit. This isn’t an easy thing to say, but it’s important that you have the best partner who will be able to be on the same page with your vision and expectations. I’d be happy to connect you with someone in my network.”
Regardless of the scenario, your close should be concrete and clear about what happens next. Present a list of next steps, including a hard end date, expectations re: deliverables, and the associated timing for completion. Communicate that you’ll outline your discussion in a follow-up email.
Firing a client should be your absolute last resort, and you should only do it when you know that the relationship is beyond repair, or if it’s hurting your team or other customers. If managed well, your professional reputation will remain intact. Being clear, direct, and honest about the arrangement and why it needs to come to an end may be less painful than you think. However, don’t waver on your decision, and don’t leave the door open for negotiation or discussion.
How have you handled a terrible or challenging client relationship? Tell us about your experience and how you handled it. Share your comments below.
View Comments (52)
My projects are typically last about 3-4 months, and then they are completed. There is never ongoing work, but a client can come back, any time within a month or two, or years later. If a former irritating client comes back, I don't have to have any kind of come-to-Jesus meeting with them.
Oddly, most of the really difficult clients do come back, so it probably means that they treat everyone else like they treated me.
I simply tell these unwanted clients that I have too many other client commitments at the time, and won't be able to take on any work at this time. Projects usually can't wait, but if they ask when I can take it on, I tell them I'm busy for 6 months, and that is the end of it.
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I am a people pleaser. I would fire that client the passive aggressive way. Raise my prices to the point that it would be worth my frustration dealing with them. I decorate and when clients order flowers, 95% of them complain about them. They almost always complain about something. The shape of the arrangement, the size, the color choices, the vase etc etc etc. Unfortunately I have to deal with the flowers because it's part of my trade and I don't want to bring competitors into my contracts. Whenever I get a client who asks for something really specific, I try to refer them to somebody else, but they seem to never accept a referral. Some clients act like the flowers are a total waste of time and money but when I offer to replace or substitute them, they act like there is no point. I feel that 90% of these customers just want me to say I am sorry and here is a refund and by the way since it's too late now to order from somebody else, go ahead and keep the flowers. I have had customers order flowers and then say they are allergic to them, I show up with White flowers and their booth color is white and they complain there is too much white now. When I think I make perfect choices, they still almost always complain. I think honestly everyone just wants to get free flowers. My suppliers are just as bad. They like to try to sell me bad flowers, charge me double because a shop that is 80% roses says that when I want roses it's a "Special Order"??? They offer me a 10% discount to bring all my business to them and then "Forget" they made that agreement the next time I come in? I have learned that when dealing with flowers I have to just say "it is what it is, if you don't like it too bad". Actually I think that. What I say is nothing, or sorry and walk away. If I believe there is legitimate a legitimate complaint, I will do anything, even at my expense to fix it.
This article is very timely. We have a few customers that really try our patience when trying to really stretch the boundaries with us repeatedly. Nothing is good enough, or is too expensive, etc. We have not yet cut the proverbial umbilical cord with them. I am hoping this will provide a way to do it less traumatically than we picture in our mind. We are not looking forward to it.
Thank you for reading, Denise! - Elizabeth
Excellent article and very useful in private healthcare practices. Some patients just can not be satisfied no matter how hard you try. We have learned over the years to set expectations way ahead of time during the onboarding phone call, by explaining office policies and what it is that we do and focus on. Even then, some patients with unreasonable expectations still slip through the cracks, which is when we use some of the techniques described in this article. Like hiring employees, the best solution is prevention by setting a clear message about what is it that your business does.
Great advice. Thank you for reading and sharing your feedback with us. - Elizabeth
A healthy percentage of our sales came from smaller multi-store retail chains and national mail order catalogs. That being said, we didn't hesitate to walk away from companies that took unauthorized charge backs or dragged their feet paying invoices, both warning signs in our book. Also walked away from a very large, long term account that changed their terms to require we "guarantee sales" for a custom item they wanted in their Christmas catalog. ( Having a vendor guarantee sales is another huge red flag in our book that a customer is in financial trouble and/or has cash flow problems.) Our independent sales rep went ballistic over our decision to not accept what would have been a six figure purchase order but he later apologized after that company abruptly closed their doors right after the first of the year, declared bankruptcy, and left many of the small vendors he represented in a terrible financial lurch.
I rarely read these types of emails. The email subject line for this article caught my eye. I made the decision to not pursue a contract renewal with a client, subconsciously, about a month ago. The contract PM constantly complains and expects uncontracted expenses for free. So I have not inquired about the renewal and have already taken the necessary steps to finish scheduled tasks by the end of the contract.
It was nice to read this article because it helped me realize that I made the right decision the right way.
Thank you Hartford. I liked the articulate--I could really relate. It was right to the point and reminded me of one of my nightmare clients that I had to get rid of. I hate to put it that way, but this person crossed the line in so many ways--at which point, I had my office manager call to tell her that our prices were increasing and that one of my clinicians will be working with her child. She always insisted on having me work with her child at which point, I knew the price increase and working with another clinician would send her on her way. She tried to engage with me though email in a very defensive way. However, I ignored her emails because you can't fight crazy. Needless to say, this will never happen to me again. I simply will not tolerate this waste of my time and energy. No amount of money is worth that!
Of the 3 scripts offered, number 3 is the only one that isn't completely unethical. You don't lie to a client you want to fire by telling them you're moving to a different line of business. How'd that be for your reputation? And you don't act as if the only problem is that your rates are too low when in fact the problem is the client's conduct.
Excellent article. Most people (myself included) struggle with this issue. Thanks for the advice.
Thanks for reading and for your feedback! - Elizabeth