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How to Determine if a Client is "Bad" for Your Business?

Top Contributor
# 1
Top Contributor

Happy Wednesday Y'all.  We've all had them.  "Bad" clients.  But what constitutes a bad client?  Here's a few things to look at.

 

Conduct a time audit.  How much time has the client taken?  Is the majority of your time spent on one client?  We use slack to keep track of what employees spend time on.  The results of a time audit are always surprising to me.  

 

Determine what the client paid (if they paid).  Does the client pay on time?  Or does the client delay.  How important is the client's payment to the survival of the company?

 

Does the client have potential to bring you future business?  Is the client well known in the community?  Do they own other businesses?  Are there additional revenue sources to be considered?

 

*Firing a client is normal. It's not a fun part of owning an agency, but a necessary one.  From my experience 2 of every 10 clients are "bad" and do not generate revenue for the business.  The most common "bad" client is a paying client who takes up too much of your team's time.  Remain calm and keep conversation simple.  The more details you provide as to why you are firing them, the worst off the conversation will become.  

3 Expert replyverified_user

How to Determine if a Client is "Bad" for Your Business?

Explorer ✭ ✭ ☆
# 2
Explorer ✭ ✭ ☆

Don't forget about the "know it all". It gets to be tiring when the client insinuates that they know how to do your job better than you do. This can be mitigated by developing a productive rapport with them, but it can still present many challenges when establishing a new business relationship. 

How to Determine if a Client is "Bad" for Your Business?

Top Contributor
# 3
Top Contributor

Bad Client -

-Ones who make changes to the accounts all of the time - Especially without telling you.

-Ones that want to make knee-jerk decisions, and don't let a strategy simmer.

-Ones that are not well funded and are scared about budgets/spend.

How to Determine if a Client is "Bad" for Your Business?

Top Contributor
# 4
Top Contributor

Oh we have plenty of those clients.  Most of the time they are internal internet managers.  We tell them up front that our job is to make them look amazing and we are not trying to replace them.  But I agree.  It's challenging in the beginning when that relationship isn't established.  

How to Determine if a Client is "Bad" for Your Business?

Top Contributor
# 5
Top Contributor

Absolutely.  Those are 3 bad clients we see on a daily basis as well.  The ones that are not well funded are pretty bad.  We had one go from $20,000 in proposed adwords monthly spend to $2,000 to $500... all in one meeting.  He didn't last long as a client.  

How to Determine if a Client is "Bad" for Your Business?

Follower ✭ ✭ ✭
# 6
Follower ✭ ✭ ✭

@Tony_Guo, your last sentence here is GREAT advice.  There's no need or value in litigating whose fault it is that the relationship isn't working.  You can be boilerplate -- something as simple as, "it's clear we aren't the right agency to suit your needs at this time, so we won't be continuing service," or something like that, will work just fine.

How to Determine if a Client is "Bad" for Your Business?

Top Contributor
# 7
Top Contributor

Absolutely.  Both sides are upset.  Nothing can be accomplished by pointing out who's fault it is.  That's perfect when you have to move on from a client.  I like it!  

 

"it's clear we aren't the right agency to suit your needs at this time, so we won't be continuing service,"

How to Determine if a Client is "Bad" for Your Business?

[ Edited ]
Top Contributor
# 8
Top Contributor

Everyone has already covered the best of the best, and I agree completely with Tony that firing clients is a normal part of agency ownership.

 

When you are being interviewed by a new client... be sure you are also interviewing them. This is why the first meeting is always at their business or office. I am looking for clues that they are not the right fit for me. I also need to see what their customers see: from the drive up, parking, building entry, what the staff does when the door opens... all the way through the business and on to how they alert the boss I am present. If they seem sketchy to me... some customers are going to pick up on it, too. My role is to evaluate the business operations to ensure they can handle the influx of business that I will bring. I need to know customers are well taken care of and that they will be given the royalty treatment from the start of interaction, all the way through to after-sale service (if something comes up that needs attention).

 

Remember, caring for people is a way of life, not something that gets flipped on and off like a light switch. Those that do it... do it all the time, those that don't... might sometimes but their default is to not care, and that means they won't care for you, either. Look, listen and learn who they are before you go to work for them. Successful businesses are in the people-caring business and the formula is the same no matter type of business it is. Formula = care for people, show respect, treat them as being the most important thing in front of you!

 

In every sales call, I let them know I do not need the work, I am booked solid for 14 months currently (which I am), I am very picky about who I work for, I am results-driven and I deliver results... and they need to deliver me the info I need, when I need it, and that includes paying me within 15 days after they receive their monthly statement (terms: Net 15).

 

As agency owners, be sharp out there... and always listen to your instincts.

 

All the Best,

 

James  

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