Life’s Too Short: Four Types of Bad Clients That Don’t Belong in Your Business

A few weeks ago I was reading Firm of the Future, co-authored by Paul Dunn (one of my mentors) and Ronald Baker, which included this story.

A young and upcoming partner in a firm was appointed to Managing Partner. He knew there was some tension between team members and certain clients, and he decided to tackle the problem straight away.

He printed out the client list of the firm, handed it out to every team member, and asked them to highlight any client they didn’t enjoy working with. He then proceeded to fire every single client they’d highlighted.

The partners of the firm were horrified to watch $80,000 in recurring annual revenue disappear from their client base.

But three months later, they saw it replaced more than threefold as $300,000 in recurring revenue walked in the door.

The moral of the story? Bad clients drive out good ones.

Here are four types of bad clients who shouldn’t be part of your business

1. The Know-it-All

No matter how many times you suggest how to improve whatever you’re advising them on, they’ve always got a reason why it won’t work, or how their current solution is great. Even if they do become clients, it will be like ‘rearranging deckchairs on the Titanic’ trying to implement change.

The telltale signs:

• They like your ideas, but they say they won’t work in their business or industry
• They like to keep close to your business, but not engage you.

2. The Dairy Farmer

These ones love milking you for all the value you have, and will often expect a high service offering in your base package. In other words, they want a lot but are prepared to only pay a little. No comprende, amigo.

The telltale signs:

• Initial enthusiasm at your product or service offering, but simultaneously…
• Price-sensitive and heavy on negotiations

3. The Rude Dude

In William Swanson’s 33 Unwritten Rules of Management he includes The Waiter Rule: “If someone is nice to you but rude to the waiter, they are not a nice person.”

These tricksters might be engaging and polite to you, but rude to your team. So if you want good morale in your team, you don’t want this type of duplicitous client hanging around.

The telltale signs:

• They are polite to you but are disrespectful to your team
• Plenty of evidence in a social or networking setting.

4. Les Misérables

French for ‘the miserable ones’, and the name of a musical and subsequent film where Russell Crowe ends himself, this type of client or prospect has just survived some really tough times (e.g. the GFC). I’m not discrediting the trials they’ve faced, but rather how they then carry it as baggage into every aspect of their business and their opportunities. Not exactly a mindset you want infiltrating the ranks. If you can’t inspire change, then keep your distance.

The tells:

• They look for the ‘necessary evils’ in your service offerings, not the value they add
• Procrastination and a lack of energy are trademarks for them.

Our Final Reason to Create an Exit Strategy for Your Worst Clients

Having spoken to others who’ve done the same, removing clients who are more trouble than they’re worth is a satisfying and somewhat freeing experience. Not only can it improve morale, it can also improve your bottom line.

But getting rid of a client is never easy, particularly one you’ve had for a while. So if you’d like to know how to go about it, or maybe just a bit more encouragement, get in touch with us.