FollowIn the best of all worlds you would enjoy working with all your clients, but unfortunately that isn’t always the case. Sometimes you need to set boundaries and “fire” clients that just aren’t worth your time and effort.
Read on to see my suggestions on when – and if – you should give up on a promotional products account. Here’s a letter from a promotional products distributor that best illustrates this not-too-uncommon dilemma:
“I have an immediate question and something that has given me sleepless nights. I’m into keeping all my accounts happy, just like you suggest. But, I’m contemplating firing a client. The problem is, in the past they’ve sent in a lot of business. As a company, their revenue is large, but in the last few months of working with them, they have not been as profitable as we would like them to be. They have become very difficult and irrational when I try to educate them on this industry. I believe they may be shopping my ideas and only looking for the lowest price. Do I fire this client, or continue sleepless nights or devoting my time to an unhappy group of people?”
Here’s what you can do. First, try communicating with the client about what’s going on. An honest discussion about your concerns may reveal some issues you may not be aware of. Be open to any feedback they may provide. Emphasize the benefits your company provides that they may not be able to receive from others. Keep the conversation positive and let them know how much you value their past business.
Next, use the questions below to evaluate not just them, but all your promotional products accounts. It’s a best practice to evaluate your clients periodically this can be a real eye opener.
- Are they profitable? On average, can you make at least a 35% gross profit margin or more on the orders that you sell to them?
- Do they accept the price you give them or are they always haggling?
- Do they pay in a timely fashion—30 days or less?
- Do they respect your ideas and your input without “shopping it?”
- Do you enjoy working with them?
- Do they have the ability to give you larger orders and repeat business?
- Are they part of a growth industry?
- Can they be a source of referral business for you?
If you answered yes to most of the above, it sounds like you have a good account. If not, it may be time to reevaluate your relationship. Not every client will be a good fit for you.
As a promotional products consultant, your good health and happiness are directly linked to your sales success. Think about what this client is costing you in terms of time, money and aggravation, and then I am sure you’ll make the right decision.
Additionally, make a checklist of the characteristics of your ideal client. Use this when you’re prospecting for new business. It will help you weed out the wrong type of clients from the start and save you time and effort in the future.
Once you’ve made the decision to let go of a client, take the high road. Don’t say or do anything that may come back to haunt you. Tell the client something such as… your company is moving in a different direction and unfortunately you won’t be able to work with them in the future. Wish them well.
I would like to hear from you. Have you ever had to “fire” a client? How have you handled the situation? Please comment below.
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Very interesting topic. Don’t think I have ever fired a client and there have been clients I probably should have fired. Meanwhile, thanks for reminding me to revisit this idea as one of the best things about working for myself, is that I can choose who I want to work with. It’s the relationships that I build with my clients that is most gratifying.
Thanks and Happy St. Patrick’s Day!
In 17 years, I’ve fired two clients. One was passive-aggressive and controlling and the second, which just happened last month, was passive-aggressive. If I meet someone who exhibits these tendencies, I walk away. Unfortunately, with p-a individuals, often these tendencies don’t show up early enough to walk away from an initial order. But, I won’t work with them again.
Ilene,
Glad you have standards and know what types of clients you don’t want. That’s smart thinking for your business!
Jeff,
Glad I could be of help in reminding you to evaluate your clients.
I just fired my oldest client after being a trusted supplier to them for 21 years. After being a great client, the new management started easing me out 2 years ago. I had lost almost all of the business and when I was accused of shorting two recent overs of the last item I ship them, which I didn’t short them and others in the company told me the offending party mis-ordered and wouldn’t tell me she was sorry, that was the time to end the relationship. I notified them that since they had chosen to use others it was time to wish them well in the future, but I was ending the relationship to concentration on my other clients who want me to continue being the primary provider.
While I wasn’t looking for revenge, I still got it. They have one area in the accounting software that they use where no one can help them from the software company or any consultants in the nation if there is a problem. I was on the original team that developed the package almost 25 years ago and I’m the last one who knows how to make it work if something comes up. Well, yesterday, something came up and the former client called in desperation. I had to politely tell them that I was no longer serving them. They could sign a new consulting agreement to retain my services at the rate of $3500 per year plus a 2 hour minimum consulting rate of $800.00 per call during the year. They are floored I would do that, but business is business and if I don’t charge for my expertise, why should anyone respect my time and expertise.
Dick,
That’s quite a story! I agree you should charge for your expertise.
Rosalie