Is it time for a client cull?
Five types of client you need to ditch – and why
In my experience, I find that most small businesses work with clients that are not right for them. In fact, the number of clients they should ditch can be as high as 20%!
When I see that one of my new clients is working with customers who are not right for them, I suggest a timely exit. But I get excuses – justifications for why they are hanging on to someone who is clearly not a good fit.
“They are a big spend customer!”
“They will change!”
“The issues they cause are not too bad!”
“They do occasionally pay me on time!”
Ditch them ASAP!
If you are going to grow your business on your terms and have customers that are value-aligned and respect you, you have to lose those that are a PITA (pain in the ass).
Once you free yourself from dealing with these customers, you have the capacity to take on new, better ones, and your business and your team will flourish.
You can then turn away any prospects that your gut tells you will be a problem. Being in that position is better than having to rely on clients you don’t want to work with but cannot afford to lose.
Here are five types of client you should wave goodbye to immediately if you want to build the right business.
1. The invoice dodgers
There will always be the occasional late payment for legitimate reasons. And this is fine so long as the clients communicate with you and understand the impact that it creates. But if you’ve got clients that are frequently late when it comes to settling invoices, don’t communicate properly and just fob you off with excuses, you need to ditch them today.
The time you spend chasing late payers will be better spent finding new clients who actually value what you do and are prepared to pay on time.
2. The scope creepers
“Any chance you could just add…?” “Would you mind just doing…?” “Can we just get an extra…?
While it’s tempting to try and keep clients sweet by doing the odd favour, those favours can quickly add up. And the more you do for free, the less the client will value your time and skills.
Sometimes taking a step back and looking at your total activity v what the client pays will tell you just how profitable they really are.
If you don’t value your time, your clients never will. Lose them.
3. The time hoovers
You can deliver an excellent service without having your client call you and your team every two hours for updates and email you every five minutes with new requests.
You know the type – if you don’t reply to their email within five minutes, you get a call or voicemail, then a text to ask if you picked up the voicemail they left about whether you received their email.
They message late at night and first thing in a morning, wanting answers that could wait.
They cancel their meetings at short notice, turn up late, are constantly distracted and just don’t respect your time.
Communicating effectively and setting expectations is critical. A client can’t expect you to drop everything whenever they need your attention – they wouldn’t want you dropping their projects for one of your other clients.
A good acid test when you lose a customer is that your team are glad rather than disappointed. Ditch these customers.
4. The backseat drivers
Don’t let clients micro-manage you, dictate how and when you should work or tell you how to do your job. It’s important to get their feedback and input, but they should also trust your judgement, opinions and decisions.
They are paying for your expertise because they don’t have it. They hire you because you’re the expert. If they think they can do a better job themselves, then maybe you should leave them to it as they will never be happy.
5. The unscrupulous
Don’t compromise your values for a client – ever. You don’t want your business to be associated with an immoral, illegal or unethical company. A reputation can take years to build and minutes to lose.
“Can I pay you cash? Can we find a way around the VAT as I am not registered? Can we just say this on the funding application? Can you share that sensitive information with me?” Erm, no!
Trust your gut, and if a client isn’t the right fit because they don’t play with a straight bat, then put your reputation ahead of the potential financial gain and walk away. Put your efforts into finding clients with integrity.
Build the right business
When I’m helping my clients to exit their clients who are a bad fit, they often struggle to see the long-term good – they can only see the short-term loss. I always say that they will thank me in three months. And they do!
It can be tough turning down work, especially in the early days when you’re still finding your feet. But if you keep saying yes to the wrong things, you’ll end up with a business that doesn’t work for you. Working too many hours, not getting paid the rates you deserve, and delivering products and services you would prefer not to. You find yourself trapped.
Fortunately, we’re used to helping business owners get unstuck so they can create the business they want – a business that gives them the freedom to choose.
Running a business is tough and without the right plan, the right support and the right focus, it’s easy to become trapped. When you get to this stage, you often feel overwhelmed, stuck or uncertain as a business owner. Discover which one of four areas of your business is trapping you and how you can achieve the freedom to choose where, when and how you work.
Take our Business Trap Diagnosis test here: tendo-uk.com/diagnosis