Get rid of a pesky client when I need more business?

I provided services for a client once, and it was not a fun experience because he didn’t communicate his needs. But I learned my lesson. The next time he requested my services, I asked more questions. Then, I quoted on the high end and figured that if he agreed, I could pay some bills. If he didn't, no biggie.

If only it were that simple! Instead of agreeing to my bid, he came back with a profit-sharing proposal. I left it at that and didn’t respond … However, the experience has made me think about troublemaker clients, and I’m curious about other experiences readers have had. Should I take the good (the dollars) with the bad (the client)? How have others dealt with pesky clients?

— Jackson, Services Manager, (company withheld by request)

Summary of Advice Received

Pay up or I'm outta here
by Meryl K. Evans, eNJ Editor 

Capturing clients is the hardest thing to do in business. The 80/20 rule says that 80 percent of business is repeat clients. So why get rid of a pesky client? Making that decision isn't as simple as it sounds, especially if you're counting every penny coming in.

Contractors "firing clients" happens more often than we think. Readers offer advice on what you can do rather than sit there and take it. Next time you get that "I want to throttle you" feeling, try the following strategies:

• Measure the client's value

• Hold a "no-holds barred" meeting with the client

• Fire the client if all else fails

Measure the client's value

In one situation, an annoying client may be a repeat caller who constantly calls your firm every minute he thinks of something. That time can add up. It could eat away any profit because of the time it takes people away from whatever revenue-producing work they're doing.

Look at clients from a budgeting perspective. Devote resources to the projects and clients with the highest return. If there isn't another client in the wings or one that can offer a better return, then you're stuck with the pest known as the client.

If you can't find a way to earn profits with the client, consider referring him to a competitor. While this may sound counterproductive, competitors help each other, which builds goodwill. Maybe your competitor will have a better relationship. If so, then the competitor owes you one.

Hold a "no-holds barred" meeting with the client

The thought of a one-on-one meeting with a pest is uncomfortable. However, after you've done your numbers, meeting with the client is a must. Whether or not you decide to end the relationship, bring the numbers into the meeting. Explain how the client's business isn't paying off for your business.

If you decide to keep the client, then it means writing down the problems. Here are the problems that appear from this reader's summary: 1) paying late and 2) being a "troublemaker" (unreasonable? demanding? requests too many changes?).

A reader suggests dealing with the late payments by clearly outlining the due date and including a re-billing clause stating you'll add X percent to an invoice if not paid by a specific date. It's not about making extra money off late payments, but communicating the message that late payments affect both parties. The reader says, "Be prepared for a nasty phone call and stick to your rules. The client might respect you for it."

Another way to manage profit and loss is to create benchmarks. Then provide regular feedback to the client on the progress against the benchmarks. As for the more difficult issue of "troublemaker," try to avoid addressing this one (which may be tied to personality and may not be changeable) except to set certain boundaries. The other strategies might resolve this issue. Sometimes the difficulty is a result of not having the client's respect.

Fire the client if all else fails

By this point, you've made an effort to salvage your relationship with the client. If nothing worked, then it's time to part. Simply apologize to the client and end the relationship while keeping the agreement in mind. A reader says, "Clients must match your organization's business needs, like products are matched with their customers' needs. Customers who may not be beneficial to your business could be more beneficial to another’s business. By keeping better matched clients while letting go of others — who might find a perfect match in your competitor — everyone wins."

Firing is never pleasant, even if it's a client instead of an employee. After reviewing the costs, profits and intangibles, and nothing changes for the better, then let the client go without burning bridges. The situation will stick with you for a little while, but as soon as you focus on profitable accounts, things will get better.

Meryl K. Evans is the content maven behind meryl.net, helping companies get better results through simple words that make a big impact. Stop by her blog or contact her anytime.