Is it ever a good marketing decision to sack a client?

Most professional service firms have at least one “bad client”, which might exhibit one or more of the following negative traits:

  • Never pays their bills without repeated chasing.
  • Is constantly bombarding you/your staff preventing you from getting on with the job.
  • Expects more than is reasonable to be done for free.
  • Regularly changes the brief, moves the goal posts or has indecision half-way through the job.
  • Is abusive towards your staff.

Sometimes there is very good reason to keep a “bad client”. Perhaps they are a key player in the industry and simply having them on your client list raises your kudos and credibility; maybe they are hugely influential and good to have on your side; or maybe they contribute so much in fees that some negative behaviour can be ignored.

However, there will be some others, which don’t have a valid reason to be on your client list other than the fact they seek your services, and these are an opportunity cost.

I write about “opportunity cost” quite frequently in my blogs, as I believe that this is a critical success factor in the professional services sector. When making money is about charging time it is important to ensure that time is used effectively and to maximum advantage.

Time spent servicing these “bad clients” (non-chargeable client maintenance, write off, chasing debt etc) could arguably be better spent in other ways – looking after the “good clients”, sourcing new work or even improving internal procedures. There are other opportunities, which your “bad client” prevents you from following.

When analysing your client base as part of your client relationship management programme take a critical look at all your clients and dig beneath the figures. Remember that high billing does not always equate to high profitability. Take an honest, hard look at your client list and you might find a few clients, which need thinning out to allow others to flourish.

Sacking a client is a brave thing to do and should not be undertaken lightly but done for the right reasons it can provide a chance to explore other opportunities and turn a cost into a benefit.

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[…] identify those clients that cost you money to service (see an earlier blog post on this subject) and either work out a way to turn that around or say goodbye to […]

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