Maybe one of your clients is in financial straits: Their most recent invoice payment, for only half of the overdue balance, arrived 100 days late. Or perhaps you’re completing a successful repositioning of your consulting practice for a new market that doesn’t include your old faithful customer. Or maybe you’re in the enviable position of saying goodbye to a client whose unreasonable demands dilute the fee you charge.
When you find yourself in such a situation, you owe it to yourself –- and your business -– to consider parting ways with the client. But that’s often easier said than done.
When Should You Terminate a Client?
"There’s a big fear attached to saying no," says Marcia Yudkin, an independent marketing consultant based in Boston. "If you let that fear overpower you, you may get caught in a situation where the client doesn’t pay, or is so much trouble that it’s not really worth it." For example, it may be time to end your relationship with a client "if you sell a flat-fee service and the person has too many questions, complaints and customization requests," Yudkin advises.
Freelance journalist Erik Sherman follows a similar philosophy. "Keeping bad customers can put you out of business very quickly," says Sherman. Sherman counsels that you should evaluate the situation carefully before coming to a decision: "You have to ask yourself if the client is worth keeping, and if you can resolve the problem. If there’s a communication problem, maybe you can work through it."
How to Do the Dirty Deed
Suppose you have decided that, for whatever reason, you need to end your arrangement with a client. It’s very important to handle the situation carefully and take the high road, regardless of how your client has behaved. Keep in mind that your professional reputation is at stake, especially if you work in a small, specialized community of consultants or contractors.
"The best way to let a client go is by recommending someone else" to do the work, says Yudkin. "The client doesn’t ever have to know your true feelings. You can simply say, I think I’m just not the right person for you." Such a statement might not always come off as a sincere expression of your professional humility. But at the least, it lets your client save face, and that’s critical to an amicable separation.
Sherman also feels an obligation to avoid leaving a customer high and dry. "From an ethical point of view, it’s incumbent upon you to help the client make the transition," he says. "You know they’re going to find somebody else. Wouldn’t you rather have them find somebody through you?"
If you do refer the client to a colleague of yours, be sure to let the colleague know the score. Consultants may have very different perspectives on the same client. Independent professionals who are hungry enough may gladly take on the work, even when they know why you turned it away.
Mind Your Contract
Of course, you must be sure that you terminate the arrangement with the client in accordance with the terms of all applicable legal agreements. Your contract should specify the period of notice required for termination of the agreement by either party, how that notice must be conveyed and so on. Be sure you understand and comply with all of these provisions before you initiate an end to the working relationship. And if you have any uncertainty about your legal rights and responsibilities, consult a lawyer before you take action.
