[...] as well as B2C; the win-win balance is way off, bad customers are ruling the roost and, as social media marketer Jeramiah Owyang blogs, sometimes the seller must cut the cord – even during times when you’d think every [...]

the issue is pretty simple — if you aren’t getting treated fairly (money, gross margin, work product, working relationships) then why would you stay in the relationship over the long term.

relationships take work — whether that’s your marriage, your significant other or business relationships. invest in the relationships that will last.

my comments only represent my personal views.

Jeff
jfromm@adamson-usa.com

Yes, bad customers do cause problems but how you let them go is the key point rather than the letting go.

Enjoy Holland!

Peter

To make the process truly meaningful, we would often have the project manager do the firing – of course this was only when we knew that the project manager was doing a great job and that the client was habitually out of line. We’d work with them on their letting-you-go speech, and on the reasons that they would give, focusing on growing evidence that we as a company were no longer a good fit for the client and their needs. The project manager would then let the client know that one of the principals was available to discuss the matter, but that they would be the one wrapping up loose ends and providing copies of final materials.

Our team members that experienced this process changed measurably – the fact that their employer believed in them enough to cull out bad business relationships was a huge motivator and led to even more buy-in by staff.

It was amazing how virtually all of these clients (3 in total over the years) would then beg to stay – dreading the effort required to search for a new service provider.

You bring up some good points. I never thought of it this way, but didn’t the US financial system get into this mess from lending to bad customers? That’s my understanding, so maybe if they were choosy about getting quality customers (like what is suggested above) they would haven’t gotten into this lending issue.

I agree with you, the US attitude doesn’t do well in other countries, I gotta remember that while I travel (in Europe right now)

I often deal with US software vendors and see some of these US vendors struggle to do well in Europe. Yes, there are some that do well in Europe but this is often due to local sales team shielding the local client from the US attitude. Yes, pick your clients but to openly flaunt your ability to sack them when you choose is an interesting marketing strategy. I know not all on here are taking this approach but I have seen this happen in the UK and it’s not that great; best it happens quietly and professionally IMHO.

[...] Firing Your Clients –Even During a Recession (Web Strategy by Jeremiah) [...]

[...] Jeremiah Owyang, May 8, 2009 [...]

I am advising my clients to target companies that are bucking the trend and investing in their business in the down economy. Sometimes it’s not investing money but mentorship, training, coaching and being a strong positive leader as a CEO or VP of Sales. Spending too much time with clients that have a toxic attitude during tough times can erode our morale and reduce the time we can spend building momentum with good clients.

For the seller I think it’s a scarcity mentality that causes them to take this kind of business in the first place.

[...] Firing Your Clients Even During a Recession from Jeremiah Owyang:  Great look at efficiency, profitability, and the necessity to always think long-term when determining client profitability and whether to let them go. [...]

Josh, Anne and others thanks for this.

I guess this goes to show that:

The customer is always right

But

Vendors have the right to choose who is a customer.

they’ve all been laid off or transferred. entire client-side departments have turned over within months.

middle managers at large organizations — the people who got things done — are gone. halls at the clients are empty. desks and cubicles are vacant. what’s left are overworked top management, beancounters, attorneys, very junior (translation: inexpensive) 20-somethings, and dazed company veterans who have been shell-gamed in from other departments. they don’t trust vendors, they don’t trust each other. everyone’s a lone ranger, one paycheck away from insolvency.

like most vendors, we really care about our clients (the individuals and the enterprises) and sincerely want to help them be successful. we are constantly in the teaching mode, and constantly wondering if the “complimentary” one-day seminars and cheerful 24/7 blackberry availability will ever pay off.

as i watch our clients struggle, i truly believe that their lives are much worse than ours. yes, we could “out” the bad ones…but would it matter? our clients today will be laid off or transferred elsewhere by next month.

I think my agency should have retired one piece of business because of all of the problems you mentioned, but they didn’t for what I believe to be political reasons. Politics be what they may, the client ultimately put the biz under review and then found a new agency that was more cost-efficient precisely because of this economy. Combine that with another client that severely reduced their budget (both because of the economy and because of where they were in their business cycle) and I found myself under-utilized.

It may be debatable, but right now I believe that under utilization is one of the criteria for agency layoffs. After all – if a staffer is only 50% billable, they may be more expendable despite their expertise because they are costing the agency more than the dollars they bring in. In my case, I believe (and some close to me speculated) that my under utilization led to my being laid-off.

I believe that for the premise of retiring clients in a recession to work, agencies need to be willing to consider to use under-utilized staff to:
- contribute to new business pitches
- form small staffer teams to experiment with new technologies and report results to agency teams
- participate in the analysis of other internal agency inefficiencies and productivity gaps (ie – number-crunching on project actuals vs. estimates
- help agency communication teams to gather recent project case studies for successful programs throughout the organization

Of course all those ideas hinge upon the agency being willing to hold onto staff despite them hurting their balance sheet. My challenge to you is talking to agencies and finding out how far agencies should be willing to go to support underutilized staff of retired clients… at what budgetary point does it make financial sense to invest in agency staff who have less billable work to do…

Thanks for an interesting debate!

Great stuff Jeremiah!

Maria Reyes-McDavis

I recently fired a client because they expected white glove service for a “Walmart” price. Recession or not – the amount of time and energy that client was consuming was way out of proportion to the revenue they were providing.

It’s easy to fire “bad” clients who don’t pay their bills. It’s harder to fire the “bad” clients who pay their bills but in the process want $1.50 in services for every $1.00 they spend – especially in a service based industry because the client in question IS contributing revenue.

In this case, I knew they were a time suck – I just didn’t realize how BIG of a time suck they were until they were gone. What a relief!!!