We all want our agencies to grow and succeed. That desire compels us to want to see our client list grow steadily, too. So, when you lose a client (for whatever reason), it can feel like a slap in the face — a failure. To truly grow your agency, you need to win new clients while keeping as many of your current client base as possible; right?
While it may feel like a devastating loss when you lose a client, losing clients is part of any ambitious agency’s growth. To continue to grow your agency you will need to consider actively firing a few clients at some point. Ending client relationships is not something many of us prepare for – and it’s never easy. But knowing when to fire problematic clients is a crucial part of being a good agency leader.
When should you fire a client? What are the warning signs to look out for?
Unreasonable and Abusive Clients
Let’s start with an easy reason to fire a client: the abusive client. As with many agencies, it’s likely that you put time and effort into creating a positive, vibrant and productive environment for your talented team to thrive in. You could get everything right internally and have a flawless agency mantra. But regardless of the internal environment you may have created, allowing abusive, aggressive or disrespectful clients into the mix is going to cause problems.
If you’ve been at an agency for any length of time, chances are you’ve done your time in client management roles at some point in your career. You know that all it takes is one negative or demanding client email, a short-tempered call or an upcoming meeting that you’re dreading to ruin your entire week. Don’t allow unreasonable clients destroy the morale of your team and leave them feeling degraded and underappreciated. This will have a damaging effect on all their work and could lead to damaging unproductivity and inappropriate internal complaining.
It’s just common courtesy to be polite and conduct yourself with an air of professionalism. You wouldn’t allow your staff to be abusive to clients and you shouldn’t allow clients to abuse your staff either. Ensure you collect evidence of all negative incidents along with dates and times. Document everything! Present this as a major concern to the most senior client contact and ask for an immediate change. If things don’t improve, then stop the relationship in its tracks. (NOTE: Be sure that your Agreement with a client allows for an easy exit strategy if the client relationship goes south.)
Resource Draining Clients
There are two common types of heavily resource draining clients. The clients that want extra “out of scope services” for free and the clients who simply consume unhealthy amounts of your time.
For some clients once that retainer agreement is signed, the documented deliverables and defined scope of work gets thrown out the window and it can often turn into a free-for-all. As far as they’re concerned they own you now that they’ve parted with a monthly fee, and they will continuously try to push their luck for scope-creep extras. This is particularly true for newer businesses because you’ll feel compelled to keep all new clients as happy as possible — and saying ‘no’ early on in a new relationship can be tough to do. One of the major issues here is that if you let too much slide early on, you create a relationship where it’s easy to be taken advantage of. Being accommodating but stern and realistic in the early days of a new client relationship is crucial to setting the right tone for the working relationship moving forward.
As for the monumental time wasters. Often your client main contacts are tasked with looking after the agency relationship as a main part of their role at the business. Giving them all the time in the world to chase after, call, request unnecessary meetings and demand on-the-spot status reports can lead to an unnecessary time suck on your part – and can cause chaos with your team spending too much time “putting out fires.” The major problem is that you do not have the same amount of free time to continuously play ball when it doesn’t benefit the project directly. They may not be demanding additional or free services, but in an agency where time is the most valuable resource you have, you simply can’t afford to give it away for free.
In both scenarios, you are right to consider firing these clients. The best approach is to have a very frank and direct conversation with them first. Remind them that you are a business, too, and that nothing — not even your time — comes free. Revisit the scope of work and deliverables you both agreed upon. Compare this to what time and deliverables they have received. Perhaps even show them what the value of those “extras” would have cost if they were billed for the extra time they took from your schedule. Moving forward, the scope and cost will need to be amended or the extras will need to end. If an agreement can’t be reached, it may be time to pull the plug.
Failing to Pay on Time
Late payments are the age-old pain of every agency owner and financial director. All the smart accounting platforms and scheduled payment systems in the world simply can’t force clients to push the button or write a signature on a check. Paying on time is a courtesy as well as simply good business practice and often speaks volumes about business relationships. One thing to remember, though, is that paying late isn’t always intentional. Many business owners are simply overworked, traveling or are perhaps simply forgetful. It’s hard to know how tough to come down on clients who pay late.
Before considering firing clients who pay late, take a few basic steps to try and address the situation. Provide all your clients with a payment schedule alongside your work delivery schedule so that you’ve provided invoicing and due dates upfront. Send reminders prior to when invoices are due as well as a friendly reminder on their due date. If you don’t receive any responses, follow up with a call to check and make sure everything is all right and confirm that they are receiving your reminders.
The first strong step after reminders and communications fail, is to issue a pause work date. This is simply a date by which all work for the client will cease if payment has not been received by. After all you can’t go on working for a client who is having trouble paying on time. When should you fire clients like these? It’s a tough call and you’ll need to treat each case as unique and sympathetic to any reasons given, but at some point, continued work will need to stop while you await payment. If communication regarding payment breaks down for a lengthy period of time, then you will need to strongly consider firing the client and billing for all outstanding invoices and work delivered.
Remember, your client and your agency are partners. As partners, treating each other with respect is crucial. Make sure that you’re doing right by your clients and that they’re doing right by you. If you’re getting the short end of the stick, seriously think about cutting ties after you’ve tried all else.
Tell Us What You Think?
Have you ever had to fire a client? Share your story below. Not only would your story or advice be a great learning experience for all digital marketing agencies, it would also be nice to know that you’re not alone in this situation.