When is it time to fire a client?

Over the last 25 years we have interviewed hundreds of people to be a part of our team. As with any good interview, you allow candidates to ask questions about the business, how you operate, what your philosophy looks like, and hopefully what your plan for the future is. My favorite is, “What is something you tell every employee?” Our answer is always the same, “We are never afraid to fire a client” and the response is almost universally “that’s refreshing.”

While it is true that clients are the lifeblood of a business, there are times when the relationship between the parties becomes toxic and is no longer providing a productive and positive outcome. How do we know when the relationship is toxic? How do we know that it won’t produce a positive outcome? What are the metrics (the red flags) that help you determine such an important question and take decisive action? These are all excellent questions and there are only a few situations where it is black and white.

Through the 90s and early 2000s the chase for revenue outgrew the need to reduce the level of toxicity within a Vendor->Client relationship. The concern was, “How much money are we making from the client?” Thankfully, for many that time is long gone and there are more than enough businesses that understand that a relationship with a vendor is a partnership. That partnership should work toward the mutual success of both parties. The following is a list of red flags that could mean it is time to part ways with a client. It is by no means meant as a single incident qualifier, but as markers to pay attention to.

The client wants a deal without mutual benefit

I often run into this with clients during the negotiation process. It is most often worded as, “So what kind of deal can you make me?” This is a red flag for a number of reasons:

  • It isn’t reciprocal. The client wants something for nothing.
  • They may not value your offering.
  • They may be having difficulty paying invoices.

Any “deal” should always be reciprocal. In Command Prompt’s industry an example would be, “If I can guarantee you X amount of revenue per month, can you give me a discount on your hourly rate?” This is a reasonable question and a positive sign of a new relationship. The client understands that you are valuable and is willing to commit to make the relationship stronger. On our end, the consistent nature of the work and revenue allows us to plan better and we are therefore in a better position to be able to be flexible to the client’s request.

The client consistently refuses to heed your advice

There are perfectly valid reasons why a client may not be able to heed your advice/recommendations. It could be budget constraints, uptime requirements, external business factors or a host of others. However, there are times that a client will refuse your advice to the detriment of your business and theirs. When this happens, it is a marker of the stability of the client’s business as well as the maturity of their leadership.

Your leadership is constantly on-call

There can be tense times in any relationship and sometimes leadership needs to calm the waters, help the client (or vendor) understand requirements, or just generally ease tensions between multiple teams. This is normal. However, if you find yourself in constant conversations where your engineers are requesting leadership present to redirect projects back into scope, push back against micro-managers, or generally be present to keep people on their best behavior, it is a sign of a dysfunctional relationship.

An inability to be nice or respectful

It is no secret that many technical teams are lacking in certain human skills. A lot of times it is a holdover from the days when technical people were left to their own devices to deliver solutions that nobody could understand. This is no longer an acceptable behavior. Every person on a team deserves to be treated nicely and with respect, even if you disagree with them. Communications should always be professional and with purpose. If a mistake is made, the focus should be on reconciliation and solving the problem, not blame or counter attacks.

They question every invoice

Invoices should be reviewed by clients. It keeps everyone honest and provides transparency into the project. However, if you find yourself constantly defending a certain type of billable (for example: Project Management), the client is showing that they do not value that particular part of your service. There are times when this can be resolved through client education, but often it is a client that will always nitpick your invoices. This further reduces your productivity for the client by focusing your time on items that are not actually within the scope of the project.

There are of course other behaviors to be considered and none of these should be an instant Stop Work order. It is critical in all situations with a client when any form of rupture occurs that repair happens as soon as possible. If you’re consistently phasing the above or related issues though, it may be time to go your separate ways for the mutual benefit of everyone involved.