When to Fire a Client

I once interviewed John Wren, the CEO of Omnicom Group. I asked him what the most important part of running a business was, and he said: “It’s the quality of your clients.”

I thought this spoke to a necessary evil of being successful: You need to know when to fire a client.

I'm talking about those bad clients that don’t pay their bills on time, so you're always chasing them around. Who think nothing’s ever good enough, so you're constantly wasting time adjusting work they won't like anyway. Who don’t appreciate anything. Who, on account of all of these factors, don’t let you do your best work.

The ironic thing is, you end up spending so much time and energy on these bad,"squeaky wheel" clients, and your good clients - the ones who pay on time and treat you well - get the least amount of your time.

Not only that, but you spend all day trying to appease bad clients, and then you come home exhausted and cranky and your family ends up getting less of you.

Sometimes we think these are our "best" clients, because they buy the most from us. But we're simply confusing "best" with "biggest." No matter how much sales you're getting from a big client, if that client is de-powering, rather than empowering your employees, you need to cut bait. Among other problems, you're running the risk of losing good employees.

A little story:

A few years ago, one of our best customers at Steiner Sports was a sports collectibles chain in Philadlphia. They bought a lot from us. But the main buyer there was very difficult to deal with. Every time we sold them something, it was a bitch to get paid. And we haggled over every price. I mean, this guy was some kind of pain in the ass. He meant a lot of money to us, but he meant even more wasted time and negative energy and emotions.

One day it just became too much, so I arranged a meeting in New York with the buyer, the head of the chain, and my main sales guy.

When we met up, I told the head of the chain: “I needed to meet with you, because I wanted to be face to face when I fire you guys. I'm sure you hired this man as a buyer for a reason, but we can’t deal with him anymore.”

My sales guys practically fell out of his chair. The Philadelphia guys looked dumbfounded.

“We're one of the top collectible companies in the country," I said. "And you’re one of the biggest vendors. Don’t you think it would be important for us to have a good relationship? Don't you think that when we do something new, we should be excited to call you? But that's not the case. We dread calling you because of how you operate with us. You nickel-and-dime us. You never pay on time. I'm firing you."

Wouldn't you know it? They discussed it for a few moments in private, came back, and said: “We're sorry. We’ll work this out. We'll do better."

These scenarios are similar to when you have to cut a friend or even loved one out of your life - the person is simply more trouble than they're worth.

That's when you have to put your foot down, draw that line.

We rarely think of clients this way because they have something we need so much: their money.

But when you're maintaing a relationship solely based on money, at the end of the day, that’s the best you’re gonna get out of it. And usually, you're not going to get nearly enough of it to justify all the agita.

That's when to fire a client:

When it help ensures that the best people in your life get the best of you.