You’re listening to They Don’t Teach This in Business School. I’m Julie Bee, and I’m really glad you’re here. Today’s topic is one I’ve been asked about in many speaking engagements – How to break up with a client?
Before I get into that though, I want to take a minute to thank our sponsor for today, the Braving Burnout program. This 3-month program will help you bust through the stress and overwhelm of business ownership, without taking a vacation. The program starts in May – check out the details in the show notes.
And speaking of burnout – you know something that burns a business owner out quickly? Dealing with clients that are no longer a fit for your company. This challenge can show up in many different ways for business owners, and it’s usually NOT because of the client’s attitude or how they approach you. Sometimes it is, but I’ll get to those clients in a minute.
I’ve found from my own experience, and in listening to other business owners, the need to break up with a GOOD customer or client usually happens under 3 scenarios.
First, your business has changed. Maybe the industry changed, maybe your location changed, or perhaps your staffing structure is evolving. There are hundreds of ways a business can evolve, and sometimes when it does, there are existing customers or clients that just don’t fit within that new business model.
Another reason business owners have to break up with clients is when the client is no longer profitable. You’ve improved what you can improve internally, you’ve already discussed a potential price increase with the client, and the client can’t or won’t pay any more. That’s definitely a client that must be broken up with.
The third biggest reason for a client breakup is when your company no longer offers the service or product. Sometimes this happens and your company needs to stop providing a service or selling a product, for whatever reason it may be. If your client only uses that service or product and doesn’t want or need the other items you sell, it’s time to break up with them.
I know that almost every business owner listening right now is thinking of current clients that check at least one of those boxes.
If it’s a good relationship, you’re going to want to maintain that relationship. Always keep that in mind.
Hey there, You’re listening to They Don’t Teach This in Business School, I’m Julie Bee, and today I’m talking about how to break up with clients and customers.
I just listed a few reasons why business owners may need to break up with a client or two, but what are the steps? How do you do this?
But first, let me tell you how to NOT break up with a good client, based on personal experience. I was once broken up with as a client by a 12+ year partner, via email. I had a relationship with the owner. As far as I know, I was a good client – paid my bills on time (usually early), treated the staff with respect, and really trusted their expertise. I bragged about how awesome they were to other business owners!
I think I was broken up with because they stopped offering the service they provided to me. The company had moved in a different direction in terms of offerings, but I really don’t know. That’s an example of how to NOT break up with a client who’s been a good client, but just doesn’t fit with your company anymore.
So here’s how to break up with a client that’s been a good client, with whom you want to maintain the relationship, but you need to let go of for one of the reasons mentioned above.
First, before you call or meet with them, find at least one option where the client can get the same services or products you were providing to them. If you can find a company that offers similar terms to what the client has with you right now, that’s great. If not, that’s ok, too. You just don’t want to leave the client hanging with zero options.
Second, decide on how much longer the client will be a client. If you have a contract, that date may already be set for you. If you don’t have a contract, the last day you work for the client will likely depend on what your company does for the client. In some cases, 30-days is plenty of notice. In other cases, it might be 6-months. Also, set the specific date. Saying 30 or 90 days isn’t clear. You’ll want to be prepared with the actual month, date, and year.
Third, set a meeting with the client via phone, video chat, or in-person. Please don’t do it via email or text. Have the meeting and don’t sugarcoat it. Be prepared to tell them exactly why you’re breaking up with them as a client, the last day of service or product support, and the resources you’ve found for them. Here’s what that might sound like in a meeting, after initial greetings and pleasantries…
“Hey Michael, you know I appreciate your business and support over the years. I’ve really appreciated our professional relationship, as well. But our company has changed direction in terms of the services we offer and we’ve actually discontinued the services we provide for you. June 30th, 2022 will be the last day we can provide the services for you. I have found these two resources – I know the owners at both companies – and they are interested in speaking with you. They are both a bit higher in price point than we are, but they will take great care of you.” Then you just listen.
That’s what it sounds like – that’s how to do it right.
After the meeting is over, THEN you can send an email with a summary of the conversation to make sure everyone is on the same page. You can also include any logistic items that will need to be transferred before the final date of service – for example, access to software, keys to physical worksites, project planning materials – those types of things. That is how you break up with a client, landing the relationship in a good place.
Hey there, I’m Julie Bee, and you’re listening to They Don’t Teach This in Business School. I just went through the steps on how to break up with a client you WANT to maintain a relationship with after the breakup.
But what about those clients that you never want to talk to again? Come on…you know you have them. Almost every business owner does. For example, the client:
- Creates a major amount of stress for you and your team, in comparison to other clients.
- They don’t respect your expertise.
- They don’t communicate with you well or in a timely fashion.
- They make demands for unrealistic turnaround times outside the scope of your agreement.
- Or they’re flat out rude and disrespectful to you and your staff.
I always recommend giving them one more chance, which requires a conversation about the issues above. Assuming you’ve had that conversation, the break up for difficult clients is similar to the process for great clients, but you skip the first step of finding them a potential replacement provider. You DO NOT want the reputation of passing along a difficult client to another business owner.
You do still need to set the date – make it as soon as possible – and have a meeting, phone call, or video chat with them. Here’s what that sounds like:
“Michael, thanks for meeting with me today. It’s become clear that we can no longer provide our services or products to you. June 30th, 2022 will be the last day we work together. We will be sure to go over the logistics of this transition, and hand off any pertinent information, before then.”
If they press and ask why, I usually go with, “We’re just not a good fit.” If they continue to press, I will share with them why – but keep it very brief and professional. Usually, they don’t ask for more information because they can read between the lines when you tell them you’re not a good fit.
And that is how you break up with clients, no matter the reason.
Thanks again for listening to today’s episode of They Don’t Teach This in Business School. I’m Julie Bee, and stay tuned because I’ll be back soon with another lesson that only experience, practice, and a whole lot of patience can teach us business owners.