Parting Ways with a Client: The Ins and Outs

Written by Paul Marchildon, on June 2, 2014.

It’s not you; it’s me. Well, mostly it’s you. Ending a relationship with a client who is no longer a good fit for your business is as difficult as severing ties with anyone else in your life – with the added concern of loss of revenue, impact to your reputation, and possible damage to your credibility. So, texting, “See ya – or better yet, not,” to your future ex-client isn’t going to cut it. How do you part ways amicably, and even create a mutually beneficial situation?

What Happened? When Client Relationships Go South

Client relationships shouldn’t be accidental. From start, and if necessary, to finish, they need to be carefully considered and respectfully negotiated. I’ve always taken a proactive approach, vetting potential clients just as thoroughly as they evaluated me to ensure that we “fit.”

One would hope that originally, your client was a good match and you took them on with the hope, and belief, that they would grow into a great client. Another scenario is that it has been a good relationship but the players have changed on the client side, or their budget has. Any number of factors can impact the fit. So here you are now, and you’re forced to have that conversation.

I Hope We Can Be Friends

Prepare yourself for a candid, honest conversation that encompasses why you believe this client is no longer right for your business. You’re not assigning blame; just relating why you think the relationship is no longer mutually beneficial.

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There’s a few ways this can go: one, your client might have an “Aha” moment. Maybe they didn’t realize they were underpaying you, for instance, or that they were placing too many demands on your time in relation to the budget. They might say, “I want to continue to work with you. We’ll find more money. If you’re on the brink of leaving, we need to do something differently.”

Admittedly, that’s best case. But there is no need to have a worst case. If you’re honest and forthright, they might simply say, “You’re right. We’re not a good fit.” You’ll part ways with mutual respect. Remember, you want these clients to continue to act as ambassadors of your services, to speak highly of you. Don’t “break up” with them via email, a curt phone call, or a “Dear John” letter. They deserve better, and so does your reputation.

Help Them Out

When the outcome of this conversation is a mutual decision to move on, why not try to find them a new supplier? Maybe this client, for instance, just wants someone inexpensive, someone who can do the down and dirty and keep it cheap. You don’t work that way, but there are plenty of suppliers who do. Maybe one of these “competitors” would be a better fit. No blame, no judgment. Simply a matter of a square peg finding a square hole and everyone being happy.

This can come around to benefit you in the long-run. The executive of a client with whom we parted ways, for instance, moved to another company. We were his first call because of the way we handled the situation with his former firm, and he became a great client. You have to handle these conversations delicately because, really, what goes around comes around.

What it comes down to is, knowing what’s best for your company. Too many people think that a client is a client, and you keep them at all costs. But what’s the opportunity cost? You’ll have good employees working on low margin business; you’ll have your best creative minds working on mindless projects. No one wins. I’ve seen companies go under because they continue to keep on clients who don’t fit. As one of my mentors once told me, “Those are the clients you want your competitors to have.”

It doesn’t matter if it’s you, or if it’s them. The bottom line is that parting ways with clients who don’t fit is the right step for both of you. Breaking up isn’t that hard to do; staying together, though – that’s tough.

Paul Marchildon

Paul Marchildon

A self-proclaimed Leisureologist and Motivational Speaker, Paul Marchildon applies his vast expertise in human engagement to help leaders create more productive, effective organizations. Building on an influential career as a pioneer in employee incentive and loyalty programs, strategic creative communications, social media and mobile marketing, Paul provides insight into the advantages of incorporating a leisure culture in the "work" place. He is past president of Society of Incentive and Travel Executives’ (Site) Canadian Chapter and founder of Atlantis Creative Group (now part of Maritz Canada). He is one of a select group of Canadians who have received the Certified Incentive Travel Executive (CITE) designation.