Why and How to Sack a Toxic Client

4th October 2013 | By Frances Pratt

Fired

Some clients are just plain toxic, you know who they are and you can see the effect that they have on the people in your business … and yet … we still work with them.  Why?

In my experience it is often a function of the belief that we have to, or that there is no alternative.  Often however, when I sit down with clients I find that they haven’t honestly assessed the worth of keeping this client.  As well as the financial aspects, look at the cost of servicing clients that aren’t in your sweet spot.  This distracts the whole company from its core strategy and very often leaves both parties less than happy with the end result.

Here are some questions to review the pros and cons of client relationship:

  • What revenue do they bring in?
  • Do they help bring in new clients?
  • Is there a prestige reason for keeping them?
  • What is the financial cost of servicing this client?
  • What is the emotional cost of servicing this client?
  • What can’t you do because you are using your resources to service this client?
  • Are they strategically aligned with where you want your company to head?

There are three outcomes from such a review – you will have:

  • Clients you need to change something about how you deal with them
  • Clients you wish to sack
  • Information that you can use with prospective clients about your expected working relationship

The decision to sack a client is one of the most difficult in business, but if after this review, you have decided it isn’t worth keeping… then the next thing to do is to put that into action.

Here are some points on how to go about this:

  • Where possible, do this face to face.
  • Start by explaining your process  “We have reviewed all of our clients to ensure that we are the best company to help with <your solution>.  We did this by looking at <list the criteria>”
  • Tell them the outcome of this review as it relates to your relationship with them, be specific.
  • Tell them the decision you have come to
  • Tell them how you are going to help them transition to a new provider

It is a difficult discussion, but in my experience it often releases a great sigh of relief and I have often heard people say … “Why have we waited so long to do that?” And in truth, it helps the organisation grow – just like cutting off dead wood, it breathes new life and allows the company to grow in the right direction.

- See more at: http://www.metisan.com.au/2012/10/01/how-to-sack-a-clien/#sthash.qCSm3gP9.dpuf

Some clients are just plain toxic, you know who they are and you can see the effect that they have on the people in your business … and yet … we still work with them.  Why?

In my experience it is often a function of the belief that we have to, or that there is no alternative.  Often however, when I sit down with clients I find that they haven’t honestly assessed the worth of keeping this client.  As well as the financial aspects, look at the cost of servicing clients that aren’t in your sweet spot.  This distracts the whole company from its core strategy and very often leaves both parties less than happy with the end result.

Here are some questions to review the pros and cons of client relationship:

  • What revenue do they bring in?
  • Do they help bring in new clients?
  • Is there a prestige reason for keeping them?
  • What is the financial cost of servicing this client?
  • What is the emotional cost of servicing this client?
  • What can’t you do because you are using your resources to service this client?
  • Are they strategically aligned with where you want your company to head?

There are three outcomes from such a review – you will have:

  • Clients you need to change something about how you deal with them
  • Clients you wish to sack
  • Information that you can use with prospective clients about your expected working relationship

The decision to sack a client is one of the most difficult in business, but if after this review, you have decided it isn’t worth keeping… then the next thing to do is to put that into action.

Here are some points on how to go about this:

  • Where possible, do this face to face.
  • Start by explaining your process  “We have reviewed all of our clients to ensure that we are the best company to help with <your solution>.  We did this by looking at <list the criteria>”
  • Tell them the outcome of this review as it relates to your relationship with them, be specific.
  • Tell them the decision you have come to
  • Tell them how you are going to help them transition to a new provider

It is a difficult discussion, but in my experience it often releases a great sigh of relief and I have often heard people say … “Why have we waited so long to do that?” And in truth, it helps the organisation grow – just like cutting off dead wood, it breathes new life and allows the company to grow in the right direction.

- See more at: http://www.metisan.com.au/2012/10/01/how-to-sack-a-clien/#sthash.qCSm3gP9.dpuf

Some clients are just plain toxic, you know who they are and you can see the effect that they have on the people in your business … and yet … we still work with them.  Why?

In my experience it is often a function of the belief that we have to, or that there is no alternative.  Often however, when I sit down with clients I find that they haven’t honestly assessed the worth of keeping this client.  As well as the financial aspects, look at the cost of servicing clients that aren’t in your sweet spot.  This distracts the whole company from its core strategy and very often leaves both parties less than happy with the end result.

Here are some questions to review the pros and cons of client relationship:

  • What revenue do they bring in?
  • Do they help bring in new clients?
  • Is there a prestige reason for keeping them?
  • What is the financial cost of servicing this client?
  • What is the emotional cost of servicing this client?
  • What can’t you do because you are using your resources to service this client?
  • Are they strategically aligned with where you want your company to head?

There are three outcomes from such a review – you will have:

  • Clients you need to change something about how you deal with them
  • Clients you wish to sack
  • Information that you can use with prospective clients about your expected working relationship

The decision to sack a client is one of the most difficult in business, but if after this review, you have decided it isn’t worth keeping… then the next thing to do is to put that into action.

Here are some points on how to go about this:

  • Where possible, do this face to face.
  • Start by explaining your process  “We have reviewed all of our clients to ensure that we are the best company to help with <your solution>.  We did this by looking at <list the criteria>”
  • Tell them the outcome of this review as it relates to your relationship with them, be specific.
  • Tell them the decision you have come to
  • Tell them how you are going to help them transition to a new provider

It is a difficult discussion, but in my experience it often releases a great sigh of relief and I have often heard people say … “Why have we waited so long to do that?” And in truth, it helps the organisation grow – just like cutting off dead wood, it breathes new life and allows the company to grow in the right direction.

- See more at: http://www.metisan.com.au/2012/10/01/how-to-sack-a-clien/#sthash.qCSm3gP9.dpuf
 

Some clients are just plain toxic, you know who they are and you can see the effect that they have on the people in your business … and yet … we still work with them.  Why?

In my experience it is often a function of the belief that we have to, or that there is no alternative.  Often however, when I sit down with clients I find that they haven’t honestly assessed the worth of keeping this client.  As well as the financial aspects, look at the cost of servicing clients that aren’t in your sweet spot.  This distracts the whole company from its core strategy and very often leaves both parties less than happy with the end result.

Here are some questions to review the pros and cons of client relationship:

  • What revenue do they bring in?
  • Do they help bring in new clients?
  • Is there a prestige reason for keeping them?
  • What is the financial cost of servicing this client?
  • What is the emotional cost of servicing this client?
  • What can’t you do because you are using your resources to service this client?
  • Are they strategically aligned with where you want your company to head?

There are three outcomes from such a review – you will have:

  • Clients you need to change something about how you deal with them
  • Clients you wish to sack
  • Information that you can use with prospective clients about your expected working relationship

The decision to sack a client is one of the most difficult in business, but if after this review, you have decided it isn’t worth keeping… then the next thing to do is to put that into action.

Here are some points on how to go about this:

  • Where possible, do this face to face.
  • Start by explaining your process  “We have reviewed all of our clients to ensure that we are the best company to help with <your solution>.  We did this by looking at <list the criteria>”
  • Tell them the outcome of this review as it relates to your relationship with them, be specific.
  • Tell them the decision you have come to
  • Tell them how you are going to help them transition to a new provider

It is a difficult discussion, but in my experience it often releases a great sigh of relief and I have often heard people say … “Why have we waited so long to do that?” And in truth, it helps the organisation grow – just like cutting off dead wood, it breathes new life and allows the company to grow in the right direction.

- See more at: http://www.metisan.com.au/2012/10/01/how-to-sack-a-clien/#sthash.qCSm3gP9.dpuf

Some clients are just plain toxic!

You know who they are and you can see the effect that they have on the people in your business … and yet … we still work with them.  Why?

Why we stick it out with Toxic Clients

In my experience it is often about our belief that there isn't an alternative.  We focus on the money or we don't want to upset them, but allow them to upset us and our team.... well just like in the playground ... that's not fair!

My question to this is have you honestly sat down and assessed the real worth of keeping this client?

Of course you have to assess the financial implications, but also make sure you look at the cost of servicing clients that are difficult or aren’t in your sweet spot.  There is an opportunity cost here as this distracts the whole company from your core strategy and very often leaves both parties less than happy with the end result.

Here are some questions to review the pros and cons of your client relationships:

  • What revenue do they bring in?
  • Do they help bring in new clients?
  • Is there a prestige reason for keeping them?
  • What is the financial cost of servicing this client?
  • What is the emotional cost of servicing this client?
  • What can’t you do because you are using your resources to service this client?
  • Are they strategically aligned with where you want your company to head?

 

There are three outcomes from such a review – you will have:

  • Client relationships where you need to change something about how you work together
  • Clients you want to sack
  • Information that you can use with prospective clients about your expectations in your relationship with them

 

How to sack a client:

 

The decision to sack a client is one of the most difficult in business, but if after this review, you have decided it isn’t worth keeping them… then the next thing to do is to put that into action.

Here are some points on how to go about this:

  • Where possible, do this face to face.
  • Start by explaining your process  We have reviewed all of our clients to ensure that we are the best company to help with <your solution>.  We did this by looking at <list the criteria>”
  • Tell them the outcome of this review and how this impacts on your relationship with them, be specific.
  • Tell them the decision you have come to
  • Tell them how you are going to help them transition to a new supplier / provider

 

Why it's worthwhile sacking toxic clients:

Let's face facts! It is a difficult decision and discussion, but in my experience it often releases a great sigh of relief and I have often heard people say … “Why have we waited so long to do that?”

In truth, it helps your business grow – just like cutting off dead wood, it breathes new life and allows the company to grow in the right direction.

 

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