Blog Post

The Why and How of Firing Clients

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

“Web Worker” is a big tent. Some of us are building Web 2.0 and beyond, hopping from coffeehouse to meeting room and fueled by VC money. Some are telecommuting full-time for a single employer, working a job that’s traditional but for the fact that we don’t drive in to the office every day. And some are lashing together careers from some mix of freelance and consultant gigs, bouncing around online as we try to fill the needs of multiple clients over the course of a day.

If you’re in the latter group, you’re likely used to the eternal search for the new work needed to keep the cash flowing. But if you’ve spent your career focused only on client acquisition and retention, you’ve missed a very important skill: getting rid of bad clients.

Some people’s brains lock up at the very thought of firing a customer. This is a natural, but I think misguided, reaction that stems from two main sources. First, we’ve all had it drummed into us that “the customer is always right” – and if you truly take that to heart, it’s difficult to imagine that there could ever be a reason to get rid of a customer. Second, the customer is the one who keeps us eating. Playing with new technology and keeping up with the latest trends is fun, but if you don’t have invoices that someone else pays, it’s very difficult to buy groceries.

Nevertheless, if you take the time to think about it, you’ll realize that not all customers are created equal. We all know that some customers are a joy to work with: accommodating, enthusiastic, reasonable. Conversely, other customers make us dread the ringing phone. They’re demanding, annoying, and downright abusive. If you’re just starting out and scraping for every dime, you may not be in a position to be choosy. But if you’re an established web worker, it’s time to do a cost-benefit analysis and identify the clients that you would be better off without.

In general, you should seek to extricate yourself from relationships with customers who are more trouble than they’re worth. Among other things, this can mean:

  • Customers who are physically or verbally abusive
  • Customers who don’t pay their bills
  • Customers who expect you to throw in extra free work to keep their account
  • Customers who want you to undercut your standard rates
  • Customers who can’t supply specifications, design elements, or other materials on a timely basis
  • Customers who continuously express suspicion or distrust of your professional ethics

Ask yourself the question: is the money I make from this customer worth the effort it takes to serve them? Note that the answer to that question can change over time, as your client mix changes (or as your clients themselves change). It’s possible to outgrow a client, as well as to realize that you made a mistake in the first place.

If the time has come to part ways with a client, you should strive to do so in a polite and professional manner. While you can’t prevent an abusive ex-customer from saying bad things about you behind your back, there’s no sense in encouraging them to do so by being abusive yourself. Besides, it’s hard on the karma. Follow this checklist to sever the relationship as easily as possible:

  • End things in writing, not over the phone. You don’t want to leave any room for misunderstanding, and you don’t want to be argued into changing your mind. No good will come of continuing to work for a customer after you’ve told them you think they’re not worth your time.
  • Complete all work-in-progress, and have all work product ready to ship back to the customer.
  • Have a full invoice for work-to-date ready, and deliver it with the termination letter.
  • Offer a referral to other consultants who you think might be better suited to the customer, if possible. Ideally these should be firms who you know are actually hungry for the business. Some people suggest dumping unpleasant and abusive customers on competitors that you’d like to cause trouble for, but I personally prefer not to offer a referral at all in such cases.
  • Be honest. If you’re unhappy with the customer because of consistent late payment issues that you’ve been trying to address for months, don’t tell them that you’re moving to Alaska. It won’t do you any good to get a reputation for lying.

Conflict is rarely pleasant, and firing a customer is as unpleasant as firing an employee. But when you have to make the choice between living with a nagging pain for months and years, or quickly moving on in your career, you should do the right thing for your career. A professional relationship should be professional in both directions.

Have you had to go through a client firing? How did it work out for you?

17 Responses to “The Why and How of Firing Clients”

  1. I’ve been extremely fortunate over the almost 20 years of having my FileMaker Pro consultancy to have only needed to fire a client only once or twice. The most recent was a couple years ago after being verbally threatened and threatened with an attorney after the relationship soured and grew rather contentious.

    In that situation, I finished the project as agreed, making sure that all was in writing and that I was paid in full upon delivery. They even requested some additional functionality for which I quoted them using my “AH rate” (AH is an abbreviation, of course), which is $50 per hour higher. It was too bad as they really needed the support, and I had lunch about a year later with the colleague whom they called. It was a much better fit.

  2. I had to layoff a client last year because a) their partner was very difficult to work with and b) my client was running out of funds. I did what you recommended. I forwarded a letter informing my client that I don’t work on a commission-only basis for design, online marketing and copywriting services… candid reasons about my position, project and cirumstances while providing a few tips to help them continue with their goals elsewhere.

    Great article.

  3. Great post! You’ve definitely provided some sound advice.

    I wrote a fairly series on firing customers in general (as well as a sample letter/email) on my customer service blog a few months ago. It’s interesting to see your take on the issue for the freelancer crowd.

    Here’s the series: Part 1, Part 2, and Part 3.

    You may find it interesting. If you have any feedback, please feel free to send me a note. :)

  4. IMO, it isn’t worth explaining to a client the reasons why they are difficult to work with. Either the client is valuable and you put up with any problems, or you ditch them. If you have a good relationship with a client, then discussing any problems that arise is usually pretty straightforward.

    I’ve only once told a client that I would no longer take their business, but I have on several occasions simply stopped accepting contracts from others on one pretext or another–usually for the more-or-less truthful reason that I’m just too busy to take on any more work right now. After a few refusals, they usually go elsewhere.

    And the only reason so far that I have “fired” a client is for late payment of invoices. In ten years, I have never NOT been paid, but waiting three months for an invoice worth several thousand dollars is extremely irritating, especially if it’s a habitual occurrence.

    Good article, BTW. It’s important to remember that just because you’re a freelancer, doesn’t mean you have to put up with BS. After all, fleeing the BS is one of the reasons we’re freelancers, right?

  5. Great Article! I think its fair to point out that sometimes the customer doesn’t realize how much they suck. Its important to point out the difficulties you are having along the way and be sure to illustrate how their responses lead to consequences over time (misunderstandings, late work, etc.).

    Its also important to point out that as a service provider you yourself will have a hard time producing quality work for a bad client (the same is true in the employee/ employer relationship). No one does their best when they’re unhappy. I feel that you get better quality work done when your excited about that work and who you’re doing it for.

  6. Eric Gruber

    I had to fire a client once; no regrets.

    The client was a small, private preschool that wanted to micromanage every little detail about a web site for them.

    A lot of the things they wanted didn’t adhere to my policies regarding web standards, and it worked out fine. We just agreed that I wasn’t what they were looking for and went our separate ways.

    Months later, I noticed they were still looking for a web designer.

  7. This is simply fabulous. I ran a consulting firm for 8 years (now I’m working on a time management tool for lifehackers), and this is a lesson hard-learned.

    You have to segment out your customers by the value they bring you… Invariably you’ll find that 10% of them bring in 90% of your revenue. On the other end of the spectrum, you have the 10% of them that demand a disproportionate amount of your time. Consultants need to realize that the clients who are taking up most of their time are harming their ability to serve their high-value clients, and further harming their ability to acquire new high-value clients.

    It’s REALLY easy for a freelancer to spend their time servicing low-profit clients– after all, that’s what you’re good at. You need the money, right? But the best thing you could do is gently clear them off of your plate and make room for time to invest in selling/marketing to new customers.

    If you have the time, give a listen to this panel from SXSW about the concept of getting to a 4-day work week. A lot of what he talked about really speaks to this issue.

  8. This is definitely food for thought; we have a customer for our web service who paid for a lifetime membership and has at times been the bane of my existence. She emails other customers to say nasty things about me personally, she brews suspicion about my motives and personal “greed” on our member forums, and any time there is a kerfuffle, she has to get into the middle of it and points blame at me and my “shoddy” administration of our community. I go out of my way to give her excellent customer service and answer every tech question she puts my way, but apparently, kindness hasn’t killed her yet. I have even asked her straight out what her beef is with me, but she never responds, and just keeps this passive-agressive game going on and on and on…

    How does one “fire” a customer that no longer owes you money, particularly when one also values this customer’s right to vent? Or conversely, how the hell do I win her over? She’s otherwise a great asset to the community. Nothing I have tried thus far has succeeded, and she isn’t going away any time soon, if ever.

  9. hey mike this is a great article for me cause I have been in retail for 13 yrs and I always don’t make out so well with retail. And I notice I need a career change but I don’t know how to do it. School is too much these days and Alot of times I don’t have time to sit and do homework. Alot of times I am watching kids and things but its a great article for working people in todays world. But I plan on starting my own business soon.

    thanks again. . .