The Art of losing bad clients

No, the customer is not always king. Why ditching a difficult client
can actually work for your business.

One cold November morning, I sat with my usual cup of steaming coffee and stared at the company accounts in absolute disbelief – where was the payment? It was two weeks over-due and well, frankly, considering the kind of work we had put in, I had expected our client to pay up a lot sooner.

After a few more seconds of gazing at the screen (during which the numbers stubbornly remained unchanged), I contented myself with sending a ‘gentle reminder’ to our esteemed client and told myself that the dollars will pour in soon – perhaps in a few hours. “He has perhaps forgotten”.

Hours turned to days, days to weeks. No amount of repeated calling or texting or emailing could get a peep from Mr. Incommunicado. Our splendid client, the same one who had so promptly paid up for the last 4+ years had literally slipped under the radar – with our payment not forthcoming.

And folks, this one wasn’t just any client – he was THE ONE. The biggest client we had. The one for whom we hired extra personnel (his account was that huge). The one who had been with us for more than 4 years and the one, unfortunately, who contributed to our revenue by a fair margin.

So obviously, when our top guy did not pay, we fell into financial crisis. Being the director of my company did not allow me the luxury of languishing in shock. I had to act, and fast! I begged and borrowed for income, handled the cash flow, paid the salaries on time (we have never missed to pay our salaries on time for the past 7 years), paid a part of the outstanding rent, and we are currently re-inventing ourselves to become a much better company now.

I shall tell you the ‘phoenix rising from the ashes’ success story at a later time. Right now, I want to talk about our dear client who was our ‘game changer’.

Months after this debacle, when I look back, I ask myself only this – “Why did I put up with him for so long?”

Let me analyze it logically – he wasn’t a great client by any stretch of the imagination. He was rude, rather abrasive, unappreciative, pretty thankless and constantly demanded more from us – to the extent that I had 12 or at times 15 people working solely on his account. He often asked for ‘urgent’ stuff to be done at the Nth hour, and we had to scurry, work extra time to accommodate him.

Added to that, there was a known associate of mine whom he had cheated the same way. All clear indicators that this was one guy whom we had to handle with extreme caution. (Jeez, what was I thinking?)

So why did I not do so? Because I listened to the age old saying “Customer is King”. I was so caught up thinking that I had to give a great customer experience, I lost sight of my ultimate goal – My business! Sometimes, the customer is just that – a customer who helps you develop your business and if he shows any of these signs – you better start planning to lose him

  1. Bad track record
  2. Doesn’t take a “no” for an answer and pushes you to your limits
  3. Tries to make you do work you did not sign up for
  4. Withholds or threatens to withhold payment for the smallest of reasons
  5. Never admits his own mistakes, even after you point out something
  6. Delays things he has to do, like taking client approvals, for instance
  7. Ignores communication from you unless it is for something he needs urgently
  8. Doesn’t bother to verify claims/complaints/statements made by clients, and puts the blame squarely on your team

One of the biggest learnings from this whole episode is “Don’t put all your eggs in one basket”. Despite being aware of this saying, I made a mistake by doing just that. We were so dependent on his account for our finances that I kept bending over backwards to accommodate him. Now I realize, I should have started looking for other, better clients at the first instance of such behavior, and slowly reduced the work we did for this client.

Second, stick to what was agreed on in the contract. If direct communication with the end client was not specified in the deal, and your client asks you to do it – ‘just this once, as a favor, I am so tied up with other stuff’ – politely refuse and gently remind them of the contract. Or, say, ‘Sure! That will be extra $$$’! Don’t get taken for a ride in the name of providing exemplary customer service. Do not entertain unreasonable requests.

Third, do not, ever, take abuse from a client; not even if you or your team made a mistake. You must however acknowledge the shortcoming and work immediately on fixing it, but Don’t let go of your dignity. If he is a client, he also needs you to get his work done; you are also human beings who deserve to be treated with respect and dignity. No praise, I can live with; but abuse is a strict no-no.

I am sure all of us have clients who are hard to please. He constantly wants more discounts, demands more than what is within our purview to give and completely drains the team with unproductive demands.

Fourth, never continue work for a client who has outstanding bills for over a couple of weeks. They pay, you work.

Certainly it is better to get rid of these clients than hold on to them for the sake of business.

Now I find that while the finances may have slowed a bit, my team is way more relaxed, and is able to put in better and more productive work. After the initial panic at having lost a big client, we heaved a collective sigh of relief within the four walls of our office.

Credits: Thanks to Lakshmi from LeadSquared and my colleague Sunila from WebNamaste for helping me craft this story.

One thought on “The Art of losing bad clients

  1. Shyamsundar says:

    Well written post RK!. Though its a lesson learned the hard way, may be this will be your guiding light in future. Lets put all our hard work focused at the right points avoiding any possible distractions.

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