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When to fire a client

by Evan Horowitz  |  December 19/2013  | 

When to fire a client

Over the course of my career, I’ve had the pleasure of working with some truly amazing clients. Many have become good friends. But I’ve also run into the occasional client who has been less than ideal to work with—they’ve kept me up at night, churned my stomach and made me wonder whether it’s worth it to keep them.

As someone who now coaches small business owners, I’ve seen many of my own clients endure hardships with some of their clients. Today I’ll review personas for four common troublesome clients and share some approaches for salvaging the relationship—and the revenue. I’ll also cover off when it’s time to cut your losses and fire them.

The Dictator

How to Identify Them

The dictator client is extraordinarily demanding. He’s calling at midnight. Your work is never good enough; and he always expects out-of-scope work for free.  You cringe every time you receive an email from him. Some dictators can even be downright mean.

How to Try to Salvage It

I think it’s important to first recognize that dictators often behave the way they do, not because of ill will, but because they don’t know what you consider to be reasonable work parameters. They may also have developed bad habits from working with other, more pliable, contractors. So, the way to improve your working relationship is to educate your client on what works for you. Clearly explain what you’ll be able to accommodate and what you won’t…whether that’s your work hours or what’s in-scope. One of my clients, who recently had a boundary-setting conversation with a dictator, was pleasantly surprised when her client apologized profusely and happily went along with the new arrangement. It’s also a good idea to offer options for how they could get more of what they want (an additional project they could fund, for example).

When to Use the Ejector Seat

If, despite your requests, the client refuses to respect your boundaries, it’s time to bail. Continuing the project is likely to hurt or destroy your (and your team’s) morale. I’ve also seen it destroy relationships and lead to employee resignations. And, often, your other clients suffer because you’re distracted and not giving them the attention they deserve. Bottom-line: retreat from the dictator’s territory, and keep your allied clients happy!

The Deadbeat

How to Identify Them

The deadbeat is the client who won’t pay, or won’t pay on time. Bad cases include a client who doesn’t respond at all to your invoice, even after the payment deadline has passed. Perhaps worse is the client who repeatedly says, “I’ll get you the money by X date,” and then fails to deliver—always with a new excuse.

How to Try to Salvage It

From what I’ve seen, many unresponsive clients aren’t trying to cheat you, they’re just busy. So the best first step is to make it as easy as possible for them to pay. For example, you could combine and add together all outstanding invoices, offer to accept a credit card, or offer an installment plan.

It’s also helpful to consider how checks are cut by your client’s company. For a client who writes checks herself, I’ve successfully used: “I’ll be in your neighborhood Tuesday morning, would it be okay to come by around 10am to pick up my check?” If invoices have to go to an accounting department, ask your client for the contact info for the accounting person so you can go directly to the source. That is more efficient and also allows you to stop bugging your client.

When to Use the Ejector Seat

If a client won’t pay their invoice after all your attempts to help them, stop working for them, if you haven’t already. I’ve seen too many companies continue to work for the deadbeat, long after they should have bailed. I’ve heard people cite faulty rationales like, “Well at least it’s work,” or “I’m sure they’ll be good for it eventually.” In the past I told myself similar excuses, until I wised up to see that it’s not work—it’s volunteering, which provides a disincentive for the client to ever pay.

The Donald Trump

How to Identify Them

The Donald Trump client is the one who asks you to fix another vendor’s bad work. At first you’re happy for the opportunity, but then you learn that there were actually three other vendors before that… and that Donald fired all of them because he thought none of them were any good. You eventually learn— usually when he fires you too—that the vendors weren’t the problem.

How to Try to Salvage It

I advise my clients to gather as much information from the client about what went wrong with the past vendor(s) in order to sniff out a Donald Trump as early as possible. If you sense you’ve got a Donald on your hands, I suggest not getting involved, even though it can be tempting to want to be the one who will finally make the Donald happy.

If you do take a “fix-it” project with a client you’re hoping will turn out to be reasonable, I suggest that you protect yourself by getting paid in full upfront. I’ve seen too many great people left unpaid because the client turned out to be a Donald who didn’t like their work either. Also, be extremely explicit, in writing, about what you are planning to deliver. The less ambiguity there is about your role, the less friction there will be.

When to Use the Ejector Seat

If you find yourself involved with a Donald Trump you can’t please, get out as out as soon as you realize who you are dealing with. This way, it’ll be you who ends the relationship, before they do. You can follow the example of one of my clients who recently approached a Donald and told him that he didn’t think the project was a good fit after all, and that he would finish up his part of the project, then bow out. Donald appreciated my client’s proactive approach and the project ended amicably.

The MIA

How to Identify Them

An MIA hires you for a project and then disappears. When you need information or approvals from them, you get no response. Even after you continue to follow up, you still get no response. Which is so weird, because it was so urgent when they hired you, and they paid a deposit. It’s frustrating, because you want to do the work and get paid the balance you’re due.

How to Try to Salvage It

First of all, resist the natural tendency to take it personally—we often think the client must be unhappy with our work. But I find that it’s almost always just that they’re busy, that their priorities have changed. I’ve found the following two approaches often help to reengage the MIA client. First, reach out again and be clear and direct about possible consequences. If the project launch will be delayed, or a key goal missed, let them know. Second, make a response as easy as possible for them. Instead of sending a spreadsheet asking them to fill out the whole thing, find one next step and send an email saying, “This is what we’re thinking, okay to go ahead?” Another idea I’ve seen work is to ask for another contact to work with.

When to Use the Ejector Seat

If, after at least five attempts—including email and phone calls—to get your simple next step question answered, it’s time to take your foot off the gas. You rarely need to fully eject from an MIA client, but you do need to stop obsessing and reallocate that time to hunting for your next client. Create a calendar reminder and just check in with the MIA once a month. It’s likely that at some point, their priorities will change again, and they will be ready to reengage.

Share Your Experiences

How have you dealt with troublesome client situations? What advice can you give our community on how to salvage the relationship, and when to cut your losses? Share your thoughts below.

About the Author: Evan Horowitz empowers successful small businesses to grow faster. His clients have a dream that’s bigger than their business experience, and Evan brings his experience: his Harvard MBA and 10 years running businesses as big as hundred-million dollar global businesses. With Evan’s help, small business owners become smarter CEOs, and achieve much faster growth than ever before.

Get more free business tips from Evan by signing up at www.EHAdvising.com.

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  • Definitelynotjoysthrowawayname

    I have another one to suggest: THE BULLY. This person was probably picked on in elementary school and now takes every opportunity to revisit the beatings on anyone who will take it. They know everything and you know nothing. Every time you see their name on your inbox your stomach does a backflip and you start sweating and PRAY that they took their meds today; because if not, you know that any conversation you have with them is going to sarcastic, unproductive, and downright mean.

    What do you do about THAT one? :)

  • http://www.EHAdvising.com/ Evan Horowitz

    Thanks for mentioning the bully. I think a lot of us have had this experience, and it’s an ugly one. My suggestion is to ask yourself why you are doing this project. Do you desperately need the cash? If so, keep the cash in mind, and you can grin and bear it. Otherwise, you’re better off dumping this project right away, and using the time on marketing. You can find a much better client, and be happier for it.

  • http://www.lawolfe.com/ Lahle Wolfe

    This is a great article because I am really struggling with whether or not to let go of a client who never pays on time and is often 60 days in arrears. I like them a lot but I have my own bills to pay and even when they don’t pay on time I keep working hard to meet their needs.

    I began using Freshbooks because many of my clients would say the reason they were late is that they never got an invoice. I love being able to see when they read an invoice on Freshbooks so I at least now I know if they are lying. This helps me understand if there is some other reason for late payment and makes it easier to decide if the client is really just busy, or does not have the funds to pay me.

    I also now take credit cards via Freshbooks and will be offering discounts for timely payments but I am going to have to start adding late fees because some clients just still seem to feel it is okay to pay whenever they want. If I paid my phone bill late they would cut off my service!

  • http://www.EHAdvising.com/ Evan Horowitz

    Hi Lahle — glad you liked my article, and that’s awesome that Freshbooks is helping you so much getting your invoices paid on time.

    Another strategy you can try for chronically late clients is increasing the amount up front as a deposit — or even requiring payment in full before beginning work. Many of my clients have reduced their headaches significantly this way.

    Good luck!
    Evan

  • Skaled

    The other persona is the “wait you’re not on retainer”. This one signs up for a project and then proceeds to add additional requirements that make the engagement no longer feasible. Hopefully, you don’t have to fire this client and can salvage the relationship but many times it comes down to expectations being completely unrealistic.

  • http://www.EHAdvising.com/ Evan Horowitz

    Hi Skaled – yes that is a good one, thanks for mentioning it! There’s nothing like a really clear Statement of Work to help reduce the risk of a “wait you’re not on retainer.” :)

  • Philip Cottrell

    Most of my clients pay late – usually after a least one or two interest penalties have been applied, but when they pay they only pay the original invoice amount. What is the appropriate action to take at this point? Does anyone go after the interest penalty, or do you edit the invoice to remove the penalties so that you balance? Is unpaid interest penalty considered bad debt at tax time?

    Enquiring minds want to know!

  • danseker

    Another one to add to the list – newbie clients who have no idea how the contracting process works and make unrealistic demands and constantly make attempts to alter scope. There are also clients who are not necessarily dictators or bullies but are tough negotiators and make an unnecessary fuss – the micromanagers.

    At the best of times these people are figured out ahead of time and avoided. At the very least spell out the expectations in your initial communications and a contract.

  • http://www.EHAdvising.com/ Evan Horowitz

    Great additions! Micromanagers and Clueless Newbies can be huge headaches. Your advice is great–a detailed written contract so expectations are crystal clear!
    Thanks!

  • http://www.EHAdvising.com/ Evan Horowitz

    Hey Philip – it’s a judgement call whether to enforce the interest payments. My recommendation is to use them as leverage to get what you really want — the project fee. Let clients know that if they are late, x% interest will be assessed. Then, if you choose to enforce it, there are no surprises, and if you choose to waive it, you’re a hero.

    The tax implications are outside my expertise; your accountant can tell you for sure.

  • Donald_FreshBooks

    Hi Philip – I’m sorry to hear that you have to endure this from your clients.

    We just published a post with some advice that you may find helpful – so I thought I would point it out to you:

    http://www.freshbooks.com/blog/2014/03/18/5-ways-to-deal-with-dead-beat-clients/

  • http://twelvetwo.net/ Clay Asbury

    Great post. When you’re freelancing, it’s easy to become isolated. Love to hear general guidelines on this. In 2 years of freelance work with roughly 40 clients, I’ve fired one…and it was exhilarating. I worked over 15 years for other people – people I liked generally and was treated well – but working for myself has given me an ironic kind of independence. Although my income fluctuates, 95% of the time I get up every morning knowing that I am doing what I love with people of MY choosing. I didn’t start freelancing to work with people who are chronically difficult. Yep, that means less money sometimes, but it’s hardly a sacrifice.

  • http://www.EHAdvising.com/ Evan Horowitz

    Hi Clay — I can certainly relate to what you’re saying! I think so many of us who are on our own really enjoy the ability to work with people we choose on work we choose. And yes, it can be isolating. What I’ve found helpful is spending time with others who are also running their own show. I really enjoy the camaraderie of my fellow brave entrepreneurs!


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