Firing the Client and Entrepreneurship

By | February 7, 2011

Tim Askew - CEO Corporate Rain InternationalSometimes you need to fire your client. God, that’s a hard one for me.

After 16 years at the helm of my own company and over 700 clients, I’ve only given a client the pink slip four times (and once it was simply for their sake because they were really too busy and successful to use what my company was doing for them.) However, in terms of long-term branding and business reputation, it is a road that must be taken occasionally.

It was real hard to let a client go in the wake of 2008. With fear, uncertainty, and outright panic widespread it was particularly painful to give any client the heave-ho. But even in the worst of times there is a point of demarcation that must not be crossed.

In my case that line of demarcation is first and foremost discourtesy to or abuse of my staff. My employees and associates are ultimately my first priority. They are more important to me than my clients. This is certainly counter intuitive for many of my small business colleagues. For example, The Guardian Life Index: What Matters Most to America’s Small Business Owners recently reported that customers are priority numero uno for the vast majority of entrepreneurs.This is certainly understandable given the cost and time commitment that goes into generating new business. However, my feeling is that I can get new clients, but maintaining an ethical, culturally consistent employee base is ultimately more important to the long-term health of my company. In fact, the customer is not “always right” when a basic incongruity emerges in corporate culture between your client and your company. Then it is better to gently disengage.

Crain’s New York reported  that CEO Kevin Labick of digital consulting firm Empathy Lab recently fired a huge retail client. He recounts a litany of offenses that ranged from treating staff disrespectfully to late payments to nickel-and-diming small matters clearly stipulated in the contract. Such a nuisance is a time waster and a distraction from long-term goals and the branded reputability of any small firm. Also,  you may be judged by your client’s values and reputation, as much as your own.

Ecclesiastica  in the Apocrypha states, “Have regard for your name, since it will remain for you longer than a great store of gold.”

Thank you, Ecclesiasticus.

Editors Note: The Digital Nirvana is very pleased to welcome Tim Askew to our team of bloggers. Tim is the founder of Corporate Rain International and a renowned expert on sales, sales management and entrepreneurship. Thank you Tim!

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3 thoughts on “Firing the Client and Entrepreneurship

  1. Litho Film

    A very modern approach to management from a small business perspective. So many small business managers tend to work their staff hard in to please the client and ultimately keep them.

    Most bosses I know would scoff at the idea of firing a client but myself I have had many a client that is just not the right fit for me and I have had to politely say that we will have to go our separate ways.

    “When” I get my own staff, I think a leaf taken out of your book would be a good place to start.

  2. Chris Harmon

    I am firm believer in the 80/20 rule.
    20% of your clients bring in 80% or your revenue. 20% of your clients create 80% of your hassles.

    Guess what? They are never the same 20%! If a customer continually costs more to service than they provide in revenue, it is time to consider firing them. Many people are working on razor thin margins these days, so it doesn’t pay to have abusive, nickel-and-diming customers that may eventually cause your best CSRs to leave for another job. The cost of replacing a god employee is very high.

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