Nine Types of Clients You Should Cut Loose

Every great gardener knows the benefits that winter pruning will have come springtime. Michael Houlihan and Bonnie Harvey explain how that basic gardening principle can have a huge impact on your business when you use it to cut unruly clients loose.

March 2016

The coming of spring may have business owners looking forward to taking advantage of new opportunities to help business grow and blossom. What you aren’t looking forward to is another year full of Client A cursing you out every time you have a meeting. Or Client B always asking for more change orders and then complaining once they get the bill. Or Client C being so slow to respond that every estimate takes twice as long as is necessary. These are the clients, say Michael Houlihan and Bonnie Harvey, who starve your business of the energy it needs to grow and prosper. They suggest it might be time to do some pruning and cut off those bad branches.
    
“Bonnie’s mother used to tell us that seasonal pruning makes the trees grow stronger and produce more fruit,” says Houlihan, coauthor along with Bonnie Harvey of “The Entrepreneurial Culture: 23 Ways to Engage and Empower Your People” and the New York Times bestseller “The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand.” “The same is true of pruning troublesome clients. When you disconnect your business from these toxic energies, your employees will be happier, you’ll be happier, and everyone will be able to focus their time and energy on more productive, more rewarding tasks.”
    
But before grabbing your pruning shears, it’s important to have a plan. First, you need to truthfully evaluate the situation. Do you have more troublesome clients than happy campers? In other words, are you the real problem? Is the client behaving badly because you’re providing bad service, or are they chronically abusive and disrespectful even when you provide great service? Second, you have to prune with finesse. It should be done in a way that prevents bad feelings on both sides.
    
“Make it about you,” says Houlihan. “Explain that it’s not about them, but about the direction the company is heading at this time. Depending on what the case may be, tell them that you’re reorganizing, making changes due to personnel issues, focusing on a set number of clients, and so on. You don’t want to permanently burn any bridges.” (See the sidebar for advice on how to fire unruly clients.)
    
So what kinds of clients should you consider putting on the chopping block? Below Houlihan and Harvey provide a list of client types that you should consider pruning from your contact list:

The Abusers
These clients never have a kind word for you or your employees. In fact, interactions with them are usually peppered with demeaning language and expletives. It’s one thing when they treat you like crap, but an abusive client being nasty to your staff is something you simply can’t tolerate. Nothing can sink employee engagement and happiness faster than rude and abusive clients.
    
“I find that a popular phrase with abusers is always ‘or else,’” says Houlihan. “They yell at you or your employees that you better do such and such, or else! Know that you’ll never be able to please them. There will always be an ‘or else’ looming. Know that at the end of the day, you’re in control, and you get to decide whether you’re going to put up with them or not.”

The Pot Stirrers
These clients aren’t team players, but they do infiltrate your team. Unfortunately, once they’re working with you, they do nothing but stir up trouble. They say bad things about you to your employees and vice versa.
    
“Clients might do this because they feel like it gives them an upper hand,” notes Harvey. “If they can play everyone against each other, they think they may be able to work out a better deal or keep everyone scared enough that they’ll do everything they ask. Pot stirrers are poison to a company. It’s important that you nip this kind of behavior in the bud as soon as you realize it’s happening.”

The Unhappy Campers
Time and again, you deliver great work, but your unhappy campers always find something to complain about. They’re never fully satisfied, and their lack of gratitude has taken the wind out of you and your employees’ sails more than once.
    
“Unhappy campers may not be the worst clients on your list, but they can be exhausting,” notes Houlihan. “When you and your staff have put time and energy into a project and you’re pleased with the results, your clients’ appreciation means a lot. And it doesn’t have to be a big show of gratitude. A simple ‘thank you!’ is all it takes. But unhappy campers can’t be bothered. If they’re not happy, you’re not happy, and it’s best to cut them loose while you still have energy to give to other clients.”

The Cheapskates
Any business owner knows that deciding on how to price your products or services is never an easy decision to make. Chances are before presenting a client with a price list, you’ve already put a lot of time and thought into it, running the numbers to settle on a price that works for your business and potential customers. But cheapskates don’t care about any of that. They’re the clients who always ask for a discount or want to keep paying based on an outdated price list.
    
“Of course, it’s OK to give clients a discount here and there,” says Harvey. “But cheapskates have no problem bleeding you dry. And the worst cheapskates are also chronic late or non-payers. They never pay invoices on time, causing you to have to spend time tracking them down in order to get paid. Your energy is better spent elsewhere.”

The Know-It-Alls
These are the clients who make you wonder why they even hired you in the first place. They never want to take your advice, fight you at every turn, and then change all the work you send their way. Even worse, when they do it their way and don’t get the results they wanted, they find a reason to blame you or call you and need you to fix it under a ridiculous deadline.
    
“When a client prevents you from doing what you do best, that’s a big problem,” explains Houlihan. “It makes the work you do for them less satisfying, and worse, you run the risk of having your business’s name attached to subpar work.”

The Sponges
Your sponge clients seem to think they’re your only clients and use your time accordingly. They call constantly, send email after email and request needless meetings or flake on important meetings and deadlines because they view their own schedules as much more important than yours.
    
“You put much more into your interactions with sponges than you get back,” says Harvey. “They eat up valuable time with unimportant tasks and worries that keep you from servicing other, more profitable clients.”

The Headache Inducers
These are the clients who hold up a hoop and expect you to jump through it. Then, they hold up an even smaller hoop and expect you to jump through it. And on and on. They specialize in making unreasonable demands and last-minute requests that put unreasonable stress on your company.
    
“If anyone is going to give you a migraine, it’s this type of client,” notes Houlihan. “You might be able to rein them in by setting boundaries—for example, ‘no changes can be made within 24 hours of a deadline’—but if they repeatedly breach those boundaries, it might be time to pass them on to your competition. You don’t need the headache!”

The Cowboys
Every interaction with these clients feels like a “Wild West” showdown at high noon, but instead of carrying a six-shooter, their biggest threat is firing you. They constantly remind you how easily you could be replaced.
    
“Unfortunately, the best way to handle cowboys is to be the first one to pull the trigger,” says Harvey. “You might suggest that they’d be happier working with another company and help them take steps to make that transition. There’s no joy in always being under the gun, and you’re never going to do your best work when you’re being threatened with termination.”

The Two-Faced
With these clients, you never know what’s up or down. They won’t hesitate to lie to get what they want—or conveniently forget previously agreed-upon goals or deadlines. They’re always changing the rules and moving the goalposts. You can never reach a satisfactory point with them because they’re always changing their expectations.
    
“You never know where you stand with these kinds of clients,” explains Houlihan. “And that can cause a lot of unnecessary frustration and confusion. It becomes difficult for you to make the right decisions for them. You end up constantly second-guessing yourself or wondering when they’re going to turn everything on its head. Don’t waste your time. There are plenty of honest clients out there.”
    
“Once when I was a young boy, I complained to my father about a schoolmate,” says Houlihan. “And my father said, ‘Michael, you are like a space station orbiting the earth. You have only three or four ports where visiting spaceships can dock. When all the ports are taken, no new ships can get in.’ Like Bonnie’s mother’s advice about pruning, my father’s lesson to me was simple: You have to get rid of dead weight in order to open yourself up to new opportunities.
    
“Whether you think of freeing your business of troublesome clients as pruning away the bad or opening up a port to welcome new opportunities, the results are the same,” he concludes. “Your business will be healthier. You and your employees will be able to blossom and pursue those activities that can truly improve your business.”

Michael Houlihan and Bonnie Harvey are coauthors of “The Entrepreneurial Culture: 23 Ways to Engage and Empower Your People” (Footnotes Press, 2014, ISBN: 978-0-990-79370-0, $9.95, www.thebarefootspirit.com).
    
Houlihan and Harvey were the keynote speakers at the 2014 World Conference on Entrepreneurship in Dublin, Ireland, and recipients of the 2014 Distinguished Entrepreneurship Speaker Award from the Turner School of Entrepreneurship and Innovation at Bradley University. They coauthor weekly no-nonsense business blogs at www.thebarefootspirit.com and www.thebrandauthority.net. For more information, contact info@thebarefootspirit.com.

 

Seven Big Rules to Follow When Firing a Client

By Michael Houlihan and Bonnie Harvey

Firing a client is one of the most difficult decisions a business owner will ever make. And when push comes to shove, few actually do the deed. First of all, firing clients goes against everything a business owner knows. Clients keep the business going. Clients put food on the table. Clients spread the word and bring in more clients. So, when you consider firing one, it feels like you’re purposely harming your business. Second, it’s a hard, uncomfortable conversation to have. And that’s why so many business owners never do it. They just hope the bad clients will eventually go away.
    
But the truth is bad clients hurt your company a lot more than they help it. And often, getting rid of them frees you up to do so much more productive work toward building your business that cutting that one terrible client loose means you can bring in several other better clients.
    
So, how do you do it? Here are seven rules to follow when firing a client:

Do it in a measured, planned way. Firing a client should not be a quick decision. If you’re angry, cool off before you even think about having this kind of conversation. And when you do it, avoid using the words, “You’re fired.” You need a plan. You need to know exactly what you’re going to say ahead of time so that bad feelings and harsh words don’t come into play. So, once you’ve decided to fire a client, create a plan. Think about when it’s best to do it (will a project be coming to an end soon?), where it’s best to do it (should you go to them or meet in a neutral location?), and how it’s best to do it (what will you say?). Then do it quickly, succinctly, and move along.

Line up a replacement first. Close a new client. Then, sit your old client down and say, “We’ve recently begun work with a new client and due to time constraints will no longer be able to continue our work with you. We recommend that you reach out to [insert competitor].”

Phase them out. Explain that you’re taking the business in a different direction, and as a result, you’re transitioning away from certain projects. Bring any projects you have with them to a closing point and then opt not to renew the contract.
    
If you can, give them a time frame. For example, “In three weeks, Project X will be complete. At that point, we must devote our time to other clients. We wanted to let you know now so that you’ll have plenty of time to find another vendor.”

Hand them off. Set them up with your competition. Yes, you read that right! At first glance, it may seem odd to hand your competitors a shiny new client. But think about it; you’re not exactly handing over a gem. Let your competitors deal with the client’s bad habits. While they do, you’ll be growing a much healthier business.
    
And the great thing about handing clients off to your competition is that you can do so without permanently burning any bridges with the client. Tell them, “I’ve changed the direction I’m taking my business. I think you’ll find that [insert competitor] will be better able to meet your needs at this time.”

Call it like it is. If a relationship with a client has been especially contentious, the best route may be directness. You might say, “I think you’ll agree that our working relationship has become strained. I don’t feel that my company can satisfy you. As such, I believe it is best if we cut ties. [Insert competitor] provides similar services to ours. I recommend that you reach out to them for your ongoing needs.”

Tell them how you’ll wrap things up. Clearly state how you’ll be bringing your work together to a close. If any of these details are unclear, you run the risk of drawing the separation process out, which won’t be pleasant for you or your client. Tell them what duties you’ll fulfill and give them a hard end date. Meet those fulfillments, and stick to your deadline.

Stay strong. It’s not uncommon for bad clients to suddenly realize just how wonderful you are as you’re showing them the door. They might start to promise that this time they’ll really change, offer to pay more, give you more work and on and on. Don’t give in. Know that chances are a year from now you’ll find yourself in the same situation with them. Let them go and focus your time on clients who appreciate you and your company from the get-go.