Why “sacking” your clients is good for business.
How to decide if an invoice is worth it or if it’s time to give someone the chop.
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This week:
💭 Why sacking your clients is good for business
💭 How Mike and Dan have done it in the past
As with everything, these are just our views, and you don’t need to consider every single one. But, if you do, over the course of a year you’ll have tried 52 extra things to improve your sales and marketing and make your business less shit.
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Q from the community:
How would you “bin” a client or decide if someone is worth binning? I hate working with some. When I took them on I needed the business and I didn’t know how they’d be to work with, but now I no longer want to work with them and I’m not sure how to go about cutting ties amicably.
💭 Mike
Not all customers and invoices are created equal.
My own experience is that it’s usually the lowest-paying customers that cause the most hassle and expect a lot more from you for their money. In relative terms the cost of services might be a lot to them, so the investment and need for it to work is no lower than someone spending 6 times the amount, but those who do spend more usually have a better understanding of how things like that work and what to expect.
In my previous business, after we’d sold, they increased their prices by 40% knowing it would mean they lost a % of the lowest paying but highest hassle clients. It meant that they made the same money with fewer clients and could give them a better service that they didn’t begrudge - makes sense, right?
That’s how they “sacked” some of their clients, but they had the luxury of that to hide behind, if you’ve not got a big company name to do the same behind and it’s YOU doing the firing, it can be awkward.
💭 Dan
There are loads of reasons to sack clients.
The first is if they’re taking up far too much time, expecting too many changes, or imposing their will too much on your work to the point where it’s barely even profitable, you’ve got to ask yourself whether it’s worth keeping that client on. And 9 times out of 10… it’s not.
The next is if they’re having a negative impact on your team and their morale because at the end of the day, everyone knows how fucking hard it is recruiting people for your team, and if you’re in the creative industry fuck me it’s always been hard to get the right team together, so if you’ve got one client who’s negatively impacting them and not only their work but the work they’re doing for other clients, you’ve got to ask yourself again if it’s worth retaining that client for the sake of your team.
The process for us is simple, just have a really open and honest conversation with the client and just explain it’s not right, it’s not working for you and they’re probably better off going elsewhere.
We’ve all been in the position of working with someone we dread.
You know every conversation is going to be difficult, they don’t see your vision and you’d rather get your sleeve stuck on a door handle every time you walk past it for the rest of your life than do another day of the work you’re having to produce for them.
But surely the perks of working for yourself, or within a business where you have significant control over what you do and don’t do, should include having a say in whether or not you get out of bed for work you enjoy with people who respect your time.
One of the reasons we get into business is to stop answering to other people who make life difficult. And the bonus is that there’s a huge amount of work out there at the moment, so if you hate working with a certain client then let someone else fill that spot.
If you’re worried you’ll struggle to replace them or it’ll be at a detriment to how much money you’ve made at the end of the month, you might want to start looking at how you’re positioning yourself in the market. There are always ways to make yourself more attractive as a business and if you’re fixing a problem for someone, why wouldn’t they use you?
Whether it happens early in your relationship or starts to deteriorate after years of working together, once it goes wrong, it can cause more than just problems for your sanity - like Dan said, if it causes your team to struggle at work, it can start to get in the way of other clients and inevitably your accounts.
That's why, sometimes, you have to make the call and get rid.
We did a newsletter on identifying your target enemy - you can read it here 👇
It was all about how to go about deciding who you don’t want to work with so you can narrow down how to properly find who you do. It should save you from having to have these conversations with people when they turn out to be an absolute nightmare.
If there are red flags at the beginning then it’s easy to overlook them and bring someone on board because of the money, but we reckon you should always trust your gut and if you think someone’s going to be difficult, they probably are.
Whether they talk over you in meetings, question your quotes and payment terms, or disregard comms you send them, you know you’re locking yourself into that for a few months. Is it worth it?
How do you decide if it’s time to show someone the door? 🚪
So just because a client is difficult or you find them challenging to work with, doesn’t necessarily mean they need to be fired. Part of your job is to make clients happy - even the annoying ones.
Some people are difficult but it’s not the end of the world, you can get on with it and still achieve what you need to. In an ideal world we’d all only work with people we want to and everyone would say please and thank you, but we don’t live in an ideal world, we live in the real one.
Assuming you’ve experienced working with difficult people who put you in difficult situations, and that you also understand that in business as well as life, we don’t always get what we want.
But if said client starts getting in the way of you being able to do your job properly, then we don’t blame you. Chop them.
Have you at least tried making the situation better?
Sometimes there’s miscommunication between you and a client. You get annoyed at them for it and they get annoyed at you, but probably neither are at fault and it doesn’t mean you need to terminate any contracts. If you don’t know why they’re unhappy or being difficult, and they think you’re not doing as they expected, sorting out your communication might be the first step.
Think about: Have a decent go at making it work. Maybe you need some clarity around your project process, a more detailed brief, or a different way to manage expectations on both sides. Can it be improved?
Are they making you lose money?
If you’re always working through your margins because they expect so much, the work you’re doing is only going to end up costing you more than you make.
If they’re someone you only do ad-hoc work with then it’s easier to get rid because you can just say you no longer have the time to service smaller projects, but if they’re on a big retainer it can be hard to accept the loss of that money, but in reality, when you work out the hours you’re putting into their account - are you making much?
Think about: If you’re putting in 50 hours to a 30-hour project, you’re going to very quickly be running at a loss with them. The time you get back can be used to find work that doesn’t have such a low margin. That is, of course, so long as they’re the reason for the hours running up, and not because you’re working at a snail's pace or producing work that’s off the brief.
Is it a you-shaped problem?
Do you not like working with someone because they challenge you on things you create? This one can go either way, because if they’re always trying to change the work you do for them then it’s likely you’re not the right person for their job, in which case, you should part ways and they can find someone who is.
But you might also be letting your ego get in the way of what the client wants and what you think is best. If you think what’s best isn’t what they’re suggesting, communicate your reasons why. Explain why you think what you’re producing is bang on the money and why you did it this way.
Think about: A client isn’t an idiot just because they didn’t love your proposal or work, maybe you’re the idiot for not listening to what the direction was that you needed to take with it. But then again, maybe they are an idiot for not listening to someone who knows best at what they do - there’s a fine line.
How to chop a client, tactfully ✂️
We found these online and jazzed them up a bit. Don’t come for us if you use any and it goes horribly wrong.
👉 Don’t lie.
You can stretch the truth by saying things like, “We’ve really enjoyed working with you but…” even though you threw darts at their photo, but don’t lie about the reason. It can come back to bite you later, as most lies do.
Be straight up and explain your reasoning if you’re confident enough, otherwise, just explain you won’t be continuing and trust that being vague will go well.
👉 Don’t be a jerk.
When I say don’t lie, it doesn’t mean you have to tell them that everyone on your team hates their guts. Sugar-coat things a bit. You can say things like, “It feels like we haven’t been able to find a way to work together that is beneficial for both sides.”
By both sides you can 100% mean your side, but they don’t need to know that. There’s no reason to be rude, it probably won’t make you feel as good as you think it will.
👉 Don’t just email.
You can send them an email but make sure you also have a chat with them on the phone. It’s more professional, you’ll be sure to get the tone right (not a really angry one), and there's a better chance to minimise any hard feelings.
Ok, maybe if they’ve been really hideous and rude then you can probably ignore this one and just email them. Decide if the relationship is worth enough to keep amicable.
👉 Don’t leave them in the lurch.
Finish up whatever deliverable you’re working on, package up their files and have them ready to hand over (as long as the client is all paid up, of course). Recommend another agency or consultant who might be a better fit for their needs.
Ghosting and ignoring the problem won’t make it go away. They’ll see you posting on LinkedIn and they’ll know you’re still alive, so just rip off the plaster and get it done. The sooner you do, the sooner they’ll stop being a problem.
👉 Don’t get into a he/she/they said.
Take the high road and don’t get into the weeds of specific situations unless it is absolutely necessary.
If they’ve treated you terribly or upset one of your team, stick it to them. But if it’s just a clash of ways of working, let it be professional.
Homework ✍️
Spend some time this week identifying the clients you least like working with.
Do they share characteristics?
How much of your time do they take up?
Are you imminently going to do a Britney and full shave if you get another condescending email from them?
Or simply increase your price so it becomes “worth it” for the time you’re putting into the account and the internal screams you’re doing on the daily, or have it be their own fault for not wanting to pay more - or just politely sack them off.
Episode six is here next week, and we’ve got some decent pointers and opinions from all our creators.
It’ll definitely give you something to think about. Maybe even put you off being in business altogether.
But as always, chuck any of your questions in Slack and we’ll answer them all either on there, in a newsletter, or on the episode after next.
Let us know how sacking everyone who pays your bills goes.
See you next Tuesday.
VAMO 📺
After being in hospitality I have a much lower tolerance than most on this. I will sack a client straight away if it’s starting to get “tetchy”. Full refund, wish them the best and move on. Don’t try and fix and focus on something bad when you can focus on the good relationships which will result in a better outcome.