When they’re just starting out, entrepreneurs want all the clients they can get – obtaining more connections means more assured revenue streams, gives a company the chance to build its reputation and can serve as an effective business builder. While organization owners go out of their way to impress these clients and ensure they’re satisfied, this doesn’t always work both ways.
Difficult clients make it complicated for any entrepreneur to conduct sales and ensure the company’s reputation doesn’t suffer. However, once an organization has grown from its initial client base and has firmly established itself, a business owner may be able to get by without revenue from these channels and get rid of its most demanding clients. Saying no defines you and your brand. It is important to identify the circumstances under whcih you will decide to let a client go.
When to Let a Client Go
For some entrepreneurs, it’s hard to fathom voluntarily losing consistent sales. But there are some circumstances in which it just isn’t worthwhile to keep working with someone. It’s important for enterprise owners to know when it’s a good idea to let a relationship fall by the wayside – if sales are low, a company’s revenue base still isn’t secure or an organization recently encountered unexpected expenses, it may not be the best time to let go of a client.
Certain situations may call for a business owner to let go of a client in order to preserve their business. Demanding clients whose complex projects take up a great deal of time may be wasting a company’s resources especially if it takes employees hours to complete tasks requested. Other clients may simply not pay enough to be worthwhile to an enterprise’s bottom line and entrepreneurs may feel as though they’re wasting their time conducting business with this individual or company. In other instances, business owners may dislike providing the type of service a client requires and be looking to move away from completing these tasks.
Salvage the Relationship When Possible
Most entrepreneurs have a client they’d rather not work with, but many aren’t sure of how to convince these companies to take their requests elsewhere. There are several strategies a business owner can employ when it’s become evident the relationship is no longer working for their firm.
- Explain the situation. If a client’s demands are straining a company, speaking up about the situation may allow an owner to retain the business and solve the problem at the same time. When a client insists on impossible deadlines and an entrepreneur’s staff is working overtime to accommodate the request, an entrepreneur may do well to explain the short turnaround times are no longer possible and projects will require more lead time. A client that isn’t satisfied with this new situation can look to other providers for services.
- Raise prices. Business owners may give some customers steep discounts, especially if these companies were among their first clients. However, this strategy can limit profits, particularly when teams are spending quite a bit of time on work that a client pays well below the market rate for. Conducting research and determining what reasonable pricing for services should be is essential if a company wants to make its business profitable.
- Offer an alternative option. Entrepreneurs sometime shift their companies from the direction they were initially intended to move, and that’s perfectly normal. However, they sometimes retain old clients and continue offering these old partners services they are no longer interested in providing. Explaining that a company is slowly eliminating services and introducing them to another provider can help make the transition as seamless as possible and help a firm retain its reputation.