TIME TO SACK A CLIENT?
Through my work with Spark and Eskil, I mentor entrepreneurs, intrapreneurs and leaders – it’s a very cool part of what I do and I am always coming away from these sessions having learnt something new.
This in itself provides a rich vein for future books, articles and blogs for me.
In fact, my latest session with a transformation project manager introduced me to the theory of the monkey: that if we embodied an action or responsibility in the form of a monkey, we would see who is carrying it around. The theory has been in the public domain for quite a while (for example, a 1999 edition of Harvard Business Review) but doesn’t make it any less relevant.
The next day, I was able to take this conversation to another mentee to outline dysfunctional management behaviors (taking the monkey back after having delegated ownership to someone else).
As well as the exchange of ideas, many mentoring sessions see the evolution of thinking as we go – expanding on concepts; exploring experiences; building a new body of knowledge.
Working with forward-looking clients can be fun but, in reality, this is a fleeting event (it can be measured in months and years but, in the grand scheme, it’s still relatively tiny) – at some point, for the benefit of the client and the supplier, a particular engagement (e.g. mentoring or training or consulting) has to step back – there is an ebb-and-flow to the relationship.
Sometimes, possibly with an effort inversely proportional to the amount of effort that it took to win the client in the first place, we need to let some people go. Now, no one likes to lose a client (the time and energy invested in winning them in the first place; the lost revenue; the loss of testimonials, referrals and their log on your site, etc.) but, just as unproductive employees can hold you back, so can an unproductive client.
For clarity, the ‘client’ can be an internal as well as external party. Intrapreneurs have their own challenges in this instance as their unproductive client is also a colleague.
The key issues is that a bad client can be the drag factor when it comes to your own business growth:
- they want favourable fees (‘mates rates’) – the argument from the client is “look at how much business we’ve given you” whilst disingenuously forgetting the amount of work you did in the process – you’ve worked hard for their money. In some cases, you may have ‘bought the business’ to start with – undercutting competitor fees just to win the deal… but now what? Where do you go from here? Your costs may be rising but you have no room for manoeuvre in terms of increasing your own fees;
- tendency to pay late – remember the early days of the relationship when credit control was a standard? As time goes by, sales people, relationship managers and account managers are now tasked with ‘having a word’ with their client counterpart;
- they become ‘difficult’ – it’s easy to forget in the excitement of securing deals as to whether or not the client will be pleasant to work with. From an organisational health perspective, you want the people involved in delivery and support to be just as enthusiastic about the client relationship;
- breaching the contract – all too often, clients review what they are spending with you and how it may be simpler just to employ your staff instead: poaching your people.
At times, the client may no longer fit with your product / service portfolio (hopefully you have educated them about the portfolio and they come on the journey with you… but, sometimes, they won’t). Strategically, such an organisation may not fit your own corporate objectives and, over time, you let them go.
In the worst case, however, you may now have a client that is asking for more, paying for less (and paying late) whilst steadily upsetting your own staff. Crucially, you are now being distracted away from finding better clients and better relationships.
The idea of sacking a client may feel counterintuitive, but if you sit down and ask yourself key questions about your top 10 clients, you may be surprised to see what’s happening. It will be interested to see, during the course of your engagements with clients, where that monkey is!
Contact Neil directly if you would like to talk about enabling startups and scale-ups (business growth).