I’m a born salesman and it is completely and totally 100% against my DNA to even utter the words “fire a client”, but after years of being in the finance business and fighting the tide it has finally dawned on me that not all clients are profitable for your business. We understand how hard it is to win business and in today’s environment we know this may not be a popular thing to do.
Recently, we just jettisoned a couple of clients that were not a fit for our company and it was not without significant consideration on our part. Here are the main signs we used to make our decision.
1. The operational time burden is so great; it takes you away from other good clients. Now we market ourselves as the lender that will “customize”, so we have to make sure we are not just getting rid of someone because we have to work hard. The unjustifiable time is normally being spent on obtaining information that should be a normal part of the company’s daily routine, i.e., vendor information. This is something you can’t predict or control, basically the client does not have a handle on their business and the prospect for doing so is slim to none.
2. The risk does not equal the reward, maybe there has been some lapse in the client’s integrity or you otherwise shift views that you are taking undue risks. We are in the risk business and understand that with all clients we will have risk, but most risk you can mitigate. You can’t mitigate a fraud or a client’s operational problem that can’t be fixed. Most of the time, if you have a “situation”, second chances are warranted, but you have to now apply reason number 1 and usually with more stringent underwriting comes more operational man hours spent.
3. The client’s values do not match up with yours. It is vitally important to our firm that we provide a place where our employees know they are the most valuable asset we have. So if you have a client that is abusive or otherwise disruptive to morale, you have to let them go. We always say that one client is not worth an employee relationship. Clients come and go for the most part; but the loss of a good employee could cost many, many client relationships. If you take care of your people, they will take care of your clients.
The decision to let go of revenue is a hard one and should involve the top management of your firm. No matter what industry you are in, you can probably think of a few clients that need to go. Stand up for your beliefs and business will be attracted to you. Let go of any fear and recognize that if you have a robust client service atmosphere you will attract the right kind of clients.