When my husband and I started our business in 1999, we had one credit card, two pizza boxes and a whole lot of hope.
We took any and every job we could get our hands on.
The words “specialty” and “focus” were not in our dictionary.
The point was to keep the checks coming in.
If someone had asked me who my target customer was, I probably would have said, “My whatsit who?”
My customer was exactly the type of customer that many small businesses start with: anyone who would write me a check.
But what we all learn if we’re to succeed is that growing is not so much about expanding as it is about pruning.
So whether you’ve cast a wide net and are wearing too many hats, are considering expanding your client base to grow your business, or have a nagging suspicion that your target has shifted, here are three very good signs that it’s time to cut your customers loose.
You’re Taking On Projects Outside Of Your Core Competencies
You’ve heard the phrase: just because you can doesn’t mean you should.
Early on, we did everything anyone asked us to do. Trial by fire, so to speak.
But after a while, one of two things was bound to happen:
Either we’d end up offering so many services that we’d never have the time to get good at any of them, or we’d burn ourselves out, produce crummy work and tread along clumsily until we went out of business.
So we chose a third option… we cut out the things we weren’t good at and focused on the ones we were.
That meant losing business.
That meant telling customers, “No.”
That meant saying goodbye completely to some customers so we could make room for others.
It’s a scary thing to say no to business. You’ve got to be pretty confident to turn work away that you know you can do, and even if it’s not the best work out there, it’s enough to satisfy your customer and get that check.
But if you want your business to grow you have to trim the excess.
If you continue to keep thinking that you “can” do everything, you will look back in one, five or ten years and realize you’ve been running to stand still all along. “Diversify” may work for your retirement portfolio. “Specialize” is what’s going to work for your business.
Instead of branching out, rein in your focus and aim to be the best at something.
Find the intersection between what you want to do and what you can do well.
You may find yourself looking into a hole. And that’s scary. When you say goodbye to customers there may be a lag before the space gets filled with new people.
Use that time to study and to perfect your skills. You are no longer a freelancer or simply self-employed, you are a specialist and you run a business. Resist the urge to fill in spaces with any project and seek out the right project.
This “gap filling” can happen even in established businesses when things get tough. Given the economy for the past few years, a lot of people are happy just to be working. In tough times, we may be more inclined to take on jobs that are outside of our specialties because we need the money.
I’m not going to be the person to tell you not to do that. When your business is threatened, you’re going to protect it.
But do so with the full knowledge that you’re doing it and don’t lose focus. Remember that there will be a time when you’ll need to trim again and that any temporary measures you’ve taken to keep the revenue coming in are just that – temporary. If you lose focus, you’ll lose your way and instead of pulling yourself out of a tough time, things will start to slide into a sludge of mediocrity and odd-jobs.
Your Values And Vision Don’t Align With Your Customers’
Sometimes you may take on a customer who seems great on paper. The job is within your expertise, the money is good, so you sign on the dotted line.
But there’s something vaguely wrong and you’re not sure what it is. Maybe you don’t really like your customer. You chalk it up to a personality thing.
But usually when you get those vague gut-reactions to people it’s based on something more real: a misalignment of vision and values.
If you haven’t clearly articulated your business values then it can be hard to pinpoint the problem. If that’s the case, it’s time to get out your pen and paper and think long and hard about who you are, how you conduct business and what your brand represents.
When you know that, it will be easier to spot the people who don’t align with you. Maybe the job they want you to do doesn’t fit with your image of your company. Maybe the way they conduct business doesn’t fit with your values.
As a web development company, we can build any kind of website for any type of industry. But there are some that we stay away from because they aren’t a good fit for our values.
There are also certain types of people we stay away from. People without a long-term vision… people who don’t believe in our shared mission… people who are perhaps not in sync with our business ethics.
I’d have a hard time sustaining a business relationship, for example, with someone who promoted get-rich-quick schemes and promised “six-figure income secrets”. Could I build that person’s website? Could I set up some social media accounts and find and engage with followers? Of course.
That’s where alignment comes in.
Some of this goes back to wanting the money. When you just want the job, you overlook a lot of these things. But mostly this is something that doesn’t get a lot of thought. We don’t want to put some wishy-washy emotional thing before profit.
But if you take on customers who don’t align with your purpose then you’re setting yourself up for a loss anyway. These types of customers will suck the energy out of your company, lead you down the wrong path and quite possibly damage the brand you’re trying to build or maintain.
There’s no right or wrong type of customer – only the type that’s right or wrong for you.
Here’s a good rule of thumb: imagine yourself telling your mother, best friend or a respected colleague about your customers. If there are any you aren’t proud to discuss, if there are any that make you feel uncomfortable admitting to having or if you find yourself making excuses or explaining any of your jobs, then those are probably not the right customers for you.
Your Customers Are Just Deadbeats
I’ve been in this situation, too: you find yourself working with a customer who drives you crazy, who doesn’t respond to your emails, calls, questions or deadlines, who probably pays late and hassles you about your fees… but who you keep working with anyway.
The two biggies there are missed deadlines and missed payments.
I’ve been embroiled in projects that just seem to go on forever. Maybe my customer changes his mind a hundred times. Maybe he disappears for months on end without responding to my inquiries. There is no such thing as a deadline with this person. There is only some ethereal project that may or may not get done one day.
If you’re like me, you probably stop billing this customer while he’s on hiatus. What are you going to bill for when nothing has happened?
By the time he’s ready to get back to work I’ve completely forgotten where I was and what we were supposed to be doing, but I’m obligated to keep doing it, because I said I would, and we probably have a contract dated 2009.
I’ve also been in situations where people can’t, won’t or don’t pay their bill for whatever reason. They avoid me, they make excuses, they pay in fragments instead of paying the full invoice, in odd amounts that are not even worth the ink on the check.
To compound the problem, an awful lot of deadbeats are nice people. And that’s why they get away with so much. They sweet-talk us, they at least pretend to be happy and grateful and maybe they have a sob story or two. Lots of times, except for their deadbeat status, we kind of like these people!
So we accommodate their schedules. And we let them pay on Tuesday for a hamburger today.
Some clients can be controlled by setting clear expectations, rules and consequences. But some people, let’s face it, are just deadbeats.
It’s hard to say goodbye to someone we like when it’s “just about the money”, but sometimes it’s just about the money. After all, we do have to run a business and if our customers are not paying us responsibly then we have to decide whether we are willing to run a charity or whether we need to make room for paying customers.
Even missed deadlines are about the money. Yes, they are perhaps also about a lack of respect for our time, but ultimately they’re a financial drain. There’s an inherent overhead in starting and stopping a project, figuring out where you left off, getting back into the groove of what you’re supposed to be doing.
You’ve also probably wasted a lot of time (that could have been billable) chasing down your missing customer with multiple calls, emails and pleas.
For the sake of your profits, and out of respect for those customers who are responsible and who deserve your full time and attention, you need to lose the deadbeats.
It’s Not Easy, But Someone’s Gotta Do It
Whether it’s awkward, uncomfortable or financially scary to say goodbye to customers, there are times when it’s got to be done if you want to keep your business on a path toward growth and success.
I love those long term customers as much as you – some people we work with today have been in our lives for 15 years, even before any of them had a company website (or thought it was possible!)
The reason those customers are still around is because they’ve evolved with us and we’re working with them within our specialties (and they’ve found other companies to do the things we don’t, and that’s good, too). It’s also because our businesses align and we share a common mission and vision. Finally, it’s because we act responsibly by respecting each other’s time and assets.
But we’ve said goodbye to many customers over the years. Sometimes it’s good riddance and sometimes we’re sorry to see them go. Like a plant, sometimes we have to cut away the excess growth if we want to grow even bigger and healthier.
Hard or easy, the end result is the same: for every goodbye, we make space for a new hello – not just a job or customer but the job or customer.
Have you had to say goodbye to a customer? Share your experience, too!
This post is part of the November 2012 Word Carnival — a monthly group blogging event specifically for small business owners. (It’s the most fun you’ll have all month!) Check out the rest of the fabulous carney work here.
Join the discussion 40 Comments
The Wimpy-reference made me giggle. What I’ve always found helpful is to define each year how much pro-bono I was willing to do and for whom and then stick to that. Everyone else had to pay their way. For some reason, that always helps alleviate any guilt about saying no to “nice people.”
This should be required reading for everyone starting a business (and
then required again every 6 months until such time as said biz owner
I like that idea, Tea…. then I can plan my deadbeats into my year, lol… seriously though, it’s definitely a nice way to plan yourself out of the guilt, which is sometimes half the problem.
Wow, Carol Lynn, there’s so much good stuff in here that I’m going to bookmark it so I can read it every time I need motivation! I’ve had to say goodbye to clients before after realizing either that we didn’t have the same values or I just wasn’t feeling the love of the particular type of work. My strategy has always been to find one of my contacts who loves to do the things I’m ambivalent about and pass the work their way. That way, my client isn’t in the lurch and I’m free to focus on other things.
I like that strategy too and it’s definitely worth a mention. If a project isn’t great for me, that doesn’t mean it won’t be great for someone I know. And someone else would appreciate the referral. Total win-win!
Hi Carol Lynn,
This is spot-on with what I’m in the midst of right now 🙂
Not necessarily having to say goodbye to a client, but re-aligning with my ideal client more.
I think, as you said, sometimes we take on things just because of the “money prospect” but in reality it just costs more time and effort than if we’d said no and moved on to those in our target market.
As always, an excellent reminder!
Totally agree, and it’s something that can happen more than once. Every so often it’s a good idea to look at your client list and services and make sure you’re still on point. Things are always changing and you never know what direction business will take you!
Oh my, I can relate to this post big time! Thankfully I haven’t had to say goodbye to too many customers, but when I did it was so challenging. Would they hate me? Bad mouth my business? Gossip? I worried about these questions for days before having the goodbye conversation. Such a drain on my energy.
The one that sticks out was a man I’d agreed to work with, and in the first month I realized it wasn’t working, that I’d made a mistake saying yes to him. Always late, often rude, the money he paid me just wasn’t worth it. So I ended it…and my fears came to life as he raged at me. Three months afterwards, he called me to apologize and ask for a second chance. Thing is no one had ever disagreed with him or stood up to him, and my doing so had caused a breakthrough. That gave me the courage to say goodbye again in future circumstances!
Well that was a good way to resolve a bad situation! I don’t think I’ve had any really hairy moments like that but there have been moments for sure 🙂 But now I wonder… did you give him his second chance?!
I did give him a second chance and we worked together brilliantly for 3 months. Kind of restored my faith in humanity 😉
That’s awesome 🙂 I love happy endings!
I once had a client disappear for about a year only to resurface and ask to start a project from scratch after I’d sent monthly requests for them to review the work I’d already completed.
I’ve turned down work that I didn’t want to do, classes I didn’t want to teach, and each time – only after having burned myself or been burnt by something similar happening in the past.
It’s sad that it takes being burnt out or getting burnt by a client to bring about those moments of clarity, but if you’re smart and resourceful – you always come out the better for it!
Been there… I just finished a project i started literally in 2009 and there was a loooooooong period of MIA. It’s so frustrating but at the end you just remind yourself not to work with that person again! Listening to your story, too, it’s pretty clear we all have these horror stories but hey, they make for good writing material 🙂
Maybe I am a bit hard core but I have no problem saying goodbye to anyone that fits the descriptions above. I have no time to hold someone’s hand. If someone wants to follow me, I do webinars, Googl+ hangouts, etc. To answer questions and to help them out.
But…if they want to flounder, if they are annoying, I just say Goodbye! These are great suggestions for those who are apprehensive.
Good for you, Donna. I have 40-odd years of guilt bred into my bones so everything for me is a huge emotional project 🙂 I think you should be giving the rest of us lessons!
We get lots of advice on how to build customer relationships and even about how to focus on our best customers but rarely is that advice so clearly and effectively stated. What resonated most with me was knowing when and whether your business values and vision align with your customers. If that fundamental connection is not solid, the relationship is bound to sour and the work suffers.
And it’s not always easy to get to that place of alignment! I once met with a prospect with a job I reaaaaaallllyyy wanted – it was the perfect kind of fun job for me. But she just didn’t have the same vision and her head was in a totally different place. As much as that “job” sounded good, we didn’t gel and I know that would’ve started out all rainbows and unicorns and ended up like a bloody zombie apocalypse.
I’ve found the need to do this a few times over the past few months. It gets easier when we think with a business mind. Instead of the mindset of “wanting to please everyone all the time by doing everything.” breaking up with a client (for a good reason) is almost a rite of passage to a successful business. great post, Carol Lynn!
I think you might be right! You’re not a real business until you break up with your first client 🙂 Glad you enjoyed!
Well, your article made me think of me and “my” freelance writing business. When I first started I accepted all kind of crapy jobs, because I was a lot like you, I was just looking for the money and didn’t have the time to be “picky” yet!
I know that my business has improved tremendously this year, 2012, because even what I accepted a year ago still I don’t know.
It’s actually very liberating to say no, to the jobs that I don’t want anymore for one reason or another. I love to say good bye to some of my former clients. It gives you strength and power. It gives you control and I love it.
That was a great read, again 🙂
I think we’ve all been there, Sylviane. But the day when you can finally be “picky” as you say, is the best of all. It means you finally have the focus, confidence and skills to stick to what you do best. Thanks for reading and I’m glad you enjoyed it.
Really juicy post, Carol Lynn! And I would have to say the timely, for me, is impeccable. Oh, The Universe! 🙂
I don’t currently work with clients but I’m heading in that (scary and exciting) direction. Everything you’ve shared here is VITAL. As Sharon said, I’m bookmarking this one!
Saying goodbye is never easy but, oh, so important for your sanity and survival.
I hope you will look back in a few months (hey, think positive!) and be able to say “byeee” to any of those first clients you dragged on board just to get going 🙂
Some of the best decisions I have made have been 1) cutting my design business and 2) firing certain clients. Both decisions led to significantly greater things. I will also add knowing when to let go of employees and consultants are critical skill sets, too.
You have to be true to yourself and your business. It means sometimes being tough, and not people pleasing.
Indeed, saying goodbye to employees or contractors is perhaps even more challenging. It’s hard to make that seem anything but personal. I was born a pleaser so being “tough” doesn’t come naturally. It’s probably one of the hardest business lessons I’ve learned. Fortunately I’m also a “no-crap” person and my business is my baby, so if you mess with it there will be a reckoning!
Man, I’m glad I don’t work with clients like you do.
I know when I first got online I had a hard time telling people no even though if you knew me in the offline world you would wonder who the heck that woman is.
I have NO problem telling people any darn thing I want because I value myself that much. I’ve been trying to figure out why I’m so different online. I just love helping people and I guess it’s taken me quite some time to realize that most of the people I speak with have good intentions but that’s about it. I’m starting to get my thick skin back again. Yay me!!!
Great post and looks like for many of your commenters, just in time too.
Well saying “no” is most of the battle, whoever you deal with. It’s important to know your limitations so you don’t end up overwhelmed or doing things you don’t want to be doing. I know someone like you wants to please people which is a nice thing, as long as you take care of yourself, too!
As a finance person this topic really brings out my dual nature. On the one hand I preach cash flow (think Mr. Wonderful on Shark Tank). Cash is KING. You’ve got cash, your the king.
On the other hand I’m a strategist. Generally you get 80% of your revenue from 20% of your clients, so I know pruning is a healthy way to grow your business.
Thanks for giving some additional perspective
The longer you’re in business the more evident that becomes. Some people will be the reliable moneymakers and the rest… they’re like the mayo that holds the tuna sandwich together 🙂 If you cut it out, maybe not as tasty but a few less calories wouldn’t hurt. Wait, now I just sound like Tea!
A few other things to consider – when doing an event for a client (like we do) you need to make sure that the venue is willing/able to adapt to that type of event. Or the venue has the room for that event (like say parking for instance).
Also, I think when you first start out the first client you get is your learning experience, and then you or your business can grow from there.
I agree that our first customers are often our learning experiences! They help us figure out who we are and what we want to be doing. The important thing is that we keep growing.
Great post Carol Lynn. Resonates on many levels. But perhaps the one that I wryly laughed about slash grimaced at the memories of, were the deadbeats. The people who appeared to be in constant self sabotage. Why else would they come to you with obvious needs, relish and whole-heartedly approve of your recommendations, sign your contracts, approve the designs, and then dilly dally for months and months without further action and as you so beautifully described pay you for a hamburger on Tuesday?
Why I must now ask myself did we tolerate it for so long? Much of this was pre blogging. Great advice like this was just not readily available. And we forget that people hugged their knowledge and IP to their bosoms like it was a new born babe and sharing understanding and learnings is a relatively new phenomena for which we should be ever grateful!
Funny, it’s true that not long ago there was pretty much nothing to learn from but good ol’ experience – the hard way! People were certainly very closed about what they knew. That sounds like an awesome topic for a blog!
Honestly, I still have deadbeat clients (should I say that out loud?) but they disappear for long periods of time and I don’t understand the complete lack of urgency to get anything accomplished! Unfortunately it’s hard to impossible to ferret these people out beforehand. Until they disappear…
Wow Carol! It’s like you crawled into my business for the past several months and took notes 😀
When my business was a baby, I took in every and all clients too. I called them my “guinea pigs” and, okay don’t hate me for this, offered them discounted services. Gah!
Almost 2 years later and A LOT more knowledgeable thanks to people like you, Tea Silvestre, aka Word Chef, Mike Michalowicz, aka The Toilet Paper Entrepreneur, Jason Leister, aka The Art of the Client, and Danny Iny, aka Firepole Marketing, EVERYTHING has changed.
This year I’ve fired “customers” and been hired by “clients.” I’m creating Immutable Laws for my business. The big one I’m struggling with right now is not being friends with my customers. When things go great, all is well. But when things go back, usually because of the lack of communication, things get weird in a hurry. I’m in a super small town and once the word gets around that you’ve wronged someone (whether its true or not), you lose business.
Thanks for writing what all of us struggle with everyday.
That’s not a bad way to start a business, Colleen. There is definitely a learning curve so if you can make a little less money and gain a bunch more experience, then that’s a win-win, I think!
But now I’m kinda thinking I need a moniker. All those awesome people you mentioned are THE something. i want to be Carol Lynn aka the “something”.!
Okay, I think I’ve come up with your new “aka”. How about Carol Lynn, aka The People Person. I know it sounds a bit cliche, but it’s true. You’re so helpful, engaging and friendly. Getting to know you over these last few months has been a real pleasure.
Aww, thank you 🙂 Although it does make me sound a little creepy… lol… if you find me standing outside your kitchen window one evening, I’ll just say “But I wanted to help!!” Thank you though. I’m glad we met and got to “hang out here and there – more in 2013??
Great article, I can definetly relate and glad to hear I am not the only one that has had to go through this. I am still learning and hoping it does get easier which will help grow my business.
It gets easier as you learn and make mistakes 🙂 Then you know where you want to go and what you DON’T want to do to get there!
Yes I’ve had to say good-bye to customers before. In the process right now as a matter of fact. Headache after headache and it’s too much trouble to chase customers down. After a while I learned. When I figured I needed to let those customers go (some current ones right now), I didn’t feel bad about it. Thought I would, but no….not! Shows you’re growing when you understand…there will be others.
Great attitude, Barbara! That’s a great point, too, which is that when you can learn to say goodbye without all the angst and guilt, you’re definitely growing. Get rid of the people who pull you down so you can find the ones who are perfect for you!