Should You Fire a Client?

By Michael W. McLaughlin

In the early 1900s, Vilfredo Pareto, an Italian economist, concluded that 20% of the people controlled 80% of the wealth. Since then, his now-famous 80:20 rule has been applied to everything from advertising and time management to identifying product defects.

One application of Pareto’s Principle is that 20% of your customers or clients will generate 80% of your headaches. It stands to reason that you’ll boost the vibrancy of your business by pruning that disruptive 20% every year or so. Few things damage the long-term health of a business more than client saboteurs—and there are more than a few out there.

Consider Firing a Client if…

• It takes days or weeks to get on your client’s calendar.
  

• Your client wants to approve or attend all your meetings with decision makers.

• You have stopped developing new skills.

• Invoices are nitpicked to death or payments are consistently late.

• The client fails to review critical documents in a timely manner.

• Your profit margin is eroding with no end in sight.

• Your work no longer seems to have a substantive impact on the client’s business.
  

It may sound crazy to fire your clients, but doing so is one of the best strategic actions you can take. Clients define the culture of your business, and serving tiresome ones erodes that culture and poisons the environment. Problem clients create more work and needless stress. They kill your profits and your productivity, and that negativity can seep into your personal life.

It takes courage to walk away from a paying client, no matter what the circumstances. But don’t worry; if you excel at what you do, more desirable clients will find their way to your doorstep.

Michael W. McLaughlin is the coauthor, with Jay Conrad Levinson, of Guerrilla Marketing for Consultants. Michael is a principal with Deloitte Consulting LLP, and the editor of Management Consulting News and The Guerrilla Consultant. Find out more at www.guerrillaconsulting.com and www.managementconsultingnews.com.

Published in Networking Today, June 2005.