When to Fire a Client
Cramer-Krasselt, an ad agency, recently announced they would no longer work as lead creative agency for Panera Bread. While subsequent news stories made this a “he said/she said” story as to who fired whom, the conflict raises the interesting question of when a business should fire one of its customers or clients.
Most businesses place great emphasis on creating a great client experience and putting the client at the center of what they do. Attracting and retaining customers is the lifeblood of a business. In most cases, there are ways to improve a client relationship that is running into trouble. And yet – there are times when the prudent business decision is to terminate a client relationship.
At the heart of this decision is a cost-benefit analysis. How much is the client worth to your company? And what is the relationship costing you? This is in part a hard-nosed quantitative analysis. Some clients demand a great deal of service and are unwilling or unable to pay a fair price. Some customers are truly money-losers.
But what makes the calculation more complicated is that part of the cost/benefit analysis is qualitative. Consider the following scenarios:
A not-for-profit organization has been a long-time user of your services or products. They cannot afford to pay your regular fee. But they are highly-regarded in your community and their work is highly congruent with your company values.
A high paying client is difficult and demanding to work with. He is rude to your staff, inconsistent in his requirements, and never satisfied. Some of your staff members refuse to work with him.
You learn that a highly regarded client is engaging in behavior you consider unethical.In cases like these, the issue is not just financial. It has to do with your company’s culture and brand. What is it worth to you to protect your company’s people and values?
Part of visionary business leadership is the ability to weigh the intangibles as well as the tangibles and to do what is in the best interests of your company.
