by Michael Lodge
Anytime that a company or a firm has something that creates a crises it does two things. First, it makes the firm stronger because you found the weakness and you replace it with stronger people and procedures. Secondly it weeds out all of the bad clients which is a good thing to make a firm stronger. So get through the crises and make the needed changes quickly, and it is OK to loose the bad clients. The fact in every business some clients just have to go. What I have learned in our firm is the if 1 bad client leaves they get replaced by 3 very good new clients. So when a bad client leaves it is a good thing.
I read a very good article from Mike Michalowicz in which he compares clients to a pumpkin patch, he says, “It’s time to remove the diseased pumpkins so your existing top clients, and other new clients, can blossom. If this step freaks you out, find the client who is the biggest pain and who, when fired, will have the least financial impact on your business. Fire that one first.”. Sometimes you have to let the bad pumpkins go before they kill off the good pumpkins.
Our firm went through a crises that hit us all at one time and it has let the bad clients go, the ones who created trouble for the firm as clients. But don’t let a crises do the work that needs to be done in finding and retaining good clients, you also have to fire the bad clients also.
Mr. Michalowicz also gave some good pointers on letting clients go.
1. Eliminate services. To get rid of clients who are downright nasty, just telling them you no longer offer one service so they don’t come back and ask for your other services may not work; you may have to go about it differently. For example, you might eliminate a specific service or servicing a specific type of company (the same type of company your sucky client has . . . what a coincidence). To do this, use the industry expertise trick. Explain that “We have shifted all of our resources to serve an industry other than yours, and we can no longer help you.”
2. Prioritize the stars. When the good clients call, they get serviced first. The cringe- worthy clients get pushed to the back of the line. When you’re on the phone with a cringemeister and a star client calls, you (politely) hang up on the cringe client and move on to the good guy. The cringers will get the hint. Sure, it’s a little bit Mean Girls, but it gets the job done.
3. Raise prices. If you really want to see bad clients run for the hills, raise your prices. And I don’t mean a measly 10 or 20 percent. Increase your fees until it becomes prohibitive for the client. In rare cases, some clients will just rise to the occasion, paying you seriously good money just to keep working with you. Now they can’t afford you failing, so they’ll likely become all nicey-nice and help you.
4. Refuse to two-time. Another way of breaking ties with a diseased client is to say you have an agreement with a major client that prohibits you from servicing them any longer. I am not suggesting you actually create a contract; the goal is to have an explanation for the break. Just give your major client a heads-up—and get their nod of approval—that you are going to pin your breakup with a bad client on serving them (your good guy) better.
After you’re through with the awful clients, it’s time to get rid of the ones who simply aren’t a good fit. Even great, friendly customers need to go away if they are unfit for your offering. When the nice folks want to do business with you, but are unfit, introduce them to another vendor who can serve them. You are giving them great service by introducing them to someone else who is the right fit.
So from this we find that it is not all that bad when bad clients go. Now sometimes those bad clients want to make a big scene on something out of your control, or they just love causing trouble, they think very highly of themselves. Usually you see that those types of clients are the ones taking the biggest risks and they think the louder they are the more right they are when they are wrong – risk is not good for any firm or company. Fire the risk filled clients – let them go – you don’t need the trouble.
The good clients deserve your attention. If you are good firm you will bend over backwards to help good clients achieve their goals. If you have to spend so much time on a bad client your wasting the time you could devote to a good client that has the ability to do great things in their lives or their companies.
Learn from a crises, learn from bad clients – it is not all that bad to restructure and weed out the bad pumpkins.
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