When We Had To Fire A Client - Part 2
The conclusion to the "difficult" client saga. Flags we missed and lessons we had to learn.
Spoiler Alert
This is part 2 of When we had to terminate a client’s contract.
If you haven’t read Part 1, I recommend you do that before getting to any spoilers.
Here’s the link https://talesfromaconsultant.substack.com/p/when-we-had-to-fire-a-client-part?r=1elq0f
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Quick Recap
Our new service was thriving and we were adding new clients for it on a consistent basis. They were getting great value by having something they couldn’t afford and we had a new monthly recurring revenue source.
We were doing managed services before anybody even called it that.
Life was good.
Until one client came into the scene.
Flag #1. This client required way more interaction than most, way more than several of them combined.
Flag #2. He didn’t disclose a legacy piece of equipment that was key for his operation until I visited their facilities, I don’t know why he chose to hide this.
Flag #3. His declared initial intention to free up his team for projects they didn’t have time for before, changed and he waited until it was just me and him in the car to say “I am changing dollars for dollars”, meaning he was going to lay off some employees. Adding “keep this between us”.
Flag #4. Upon contract start and onboarding, this client started grilling and testing our frontline operators, calling in the middle of the night, making up hypothetical situations to see how they responded. And none of this in a very decent and nice way.
With the honeymoon period over pretty much immediately, his conversations became more and more challenging, each one taking hours to complete and with an attitude that was not just unproductive but bordering in unprofessional.
We decided to terminate his contract.
The Saga didn’t end with the decision to terminate their contract
When my boss called him to let him know we were cancelling his contract and the reasons for it, he immediately jumped to threaten with a lawsuit.
We knew this was very likely. But removing this annoying, disrespectful and basically unprofessional person from our daily lives was worth it.
Because a situation like this doesn’t stay in the office, it goes home with you.
And this can’t be a good thing.
How we avoided a lawsuit
While we knew we needed to end his contract just to keep our sanity, it’s not that simple.
Especially with people that are belligerent, unprofessional, and that change the story to fit the moment.
The thought of having a prolonged legal battle with a client is not something anyone aims for, regardless of who’s at fault.
I don’t like legal entanglements, ever. My boss at the time didn’t like them either. But we started alerting our parent company and contacting our local lawyer.
And here we were, two small businesses that started out working to help each other and with the prospect to really make an impact, standing one step away from a legal battle.
Fortunately, we did our homework right away by going over the terms and conditions in our agreement.
Didn't take long to find a clause that gave us a clear out. I don’t remember the exact wording but it was something along the lines of us reserving the right to terminate the contract for a list of reasons.
We had lots of reasons like lack of cooperation, unprofessional attitude and treatment to our team, nondisclosure of key information, etc.
But again, we didn’t expect a difficult person like this client to be understanding of it even with a wall of proof.
Like I said, I am not a fan of legal entanglements but this time a well written agreement saved us. I guess that’s one way to avoid legal entanglements.
And then our lucky break came when we didn’t hear from this client again. Not a peep.
Was this the classic case of a bully meeting his match and backing off?
Maybe.
Was this a case where he couldn’t afford a legal battle?
Maybe.
Did he come to his senses even if just to save face?
Maybe.
Relief
Our sense of relief was palpable around the office, the frontline operators were definitely happy not having to deal with such a difficult client.
We, as a company, moved on immediately to trying to help our current and new clients.
But we had lots of lessons to learn from this experience.
Lessons to learn
Oh boy, this one has a list, doesn’t it?
I already marked the places along the timeline where some flags should’ve been thrown.
Let’s start there.
1. Much longer sales cycle and demands
This client made us work extra hard and for much longer to close the sale. Usually spending time with prospects is not a problem, every business is different and clients do have different needs, even in the same industry.
But the flag should’ve been thrown for the reasons this sales cycle took much longer:
Repeated conversations, reviewing the same things over and over.
Maybe he didn’t understand the value
Maybe he did but couldn’t afford it
Maybe he likes to give people the run around as a power trip
Were we too desperate to get more clients?
Very possible, we liked to think we were hunters, not gatherers, and letting a prey escape was not in our nature.
But this one bit us back.
Why did we agree to an out of state visit to their facilities?
We had national accounts with locations all over the place and we never visited them.
Going to see the equipment we already know is not a requirement.
Reviewing their configuration and use for the equipment is required but we did that over diagrams and conference calls without a problem.
All the above points to a flaw in our sales process.
2. Client did not disclose a key piece of equipment upfront
Ultimately, this was not a big deal, we had an expert in-house.
But the act of hiding it says some things about this person. Not good things.
When we are in a sales process there are two things that combine, most times for good, but they can also end up in bad situations.
We are trying to close a sale.
The client is excited about find a solution for their problem.
Our focus on closing the sale can lead us to develop a kind of myopia, a fixation, not letting us see the forest for the trees.
The client focus to finding a solution to their problem can make them hurried and less than forthcoming with information, most times unintentionally, but still.
Both can be avoided to keep things on the good side.
The sales process should be evaluated as its happening, preferably by a third party (such as the salesperson’s supervisor) or if you work solo, by your weekly retrospective and review.
Develop a questionnaire for your own checks and balances that will help you “see” if a sales process is leading to a good place.
Create your own templates and checklists
Use them to make sure you don’t miss important details.
Update them often as you learn.
At the end of conversations with clients I like to ask this question:
What haven’t I asked?
This allows us to recap the conversation and opens up the opportunity for them to tell me things I’m not thinking of, or that might’ve been overlooked.
3. Client changed from freeing his team for projects to letting some go
In the end he is free to run his business his way.
But seeing the bait and switch he’s about to pull on his own team is not a good character reference.
“Don’t work with people you wouldn’t want to hang out with”.
This applies to clients too.
Not because you will become best buds and go to happy hour on Fridays with them. (then again, we had clients that met us for Friday lunch or happy hour quite often.)
But if a client rubs you the wrong way, or you discover little things from them that you simply don’t agree on, there is no reason you should work with them just for the contract, just for the money.
I know this is difficult in the moment, especially when we are getting started and need contracts. But some times the broth maybe more costly than the meatballs. And this not good for business, or your sanity.
4. Grilling our team with hypotheticals and calling in the middle of the night
Smart people ask a lot of questions, good questions. We used to say that our best clients were the smart ones. The ones that challenged us technically.
But this client was not challenging us by asking good questions. He was insecure.
And he was displaying it before our own eyes, we just didn’t catch that at the moment.
His constant made-up questions and belligerent attitude was the masking he was using to hide his insecurity.
At some point we have to call out clients when they behave like this. We didn’t. Which led to a bad experience.
Maybe if we had noticed and addressed the reasons for his questions early on the story would be very different.
Or we could have saved a lot of people a lot of trouble and stress.
The Takeaways
Review your sales cycle while it’s going on
This will help you identify difficult people ahead of time.
When you see things that look suspicious, say something.
Don’t work with people you wouldn’t want to hang out with
You don’t have to become friends with your clients.
But should be able to have a nice meal with each one of them.
I actually recommend having meals with your clients whenever possible.
If you don’t feel you can spend time with that person, then don’t take them as clients.
Have good contracts and agreements
Not as a spear but as a shield.
This might get you out of trouble some time.
Be fair but do protect yourself.
Do weekly retrospectives
Dedicate time to review your week.
Take action changing your policies, templates, questionnaires as often as possible.
This will improve your process and relationship with clients.
Bonus question to ask clients, especially when doing discovery:
What haven’t I asked?
This should help both of you recap the conversation and keep things from falling into cracks. Most appreciate very much this last question.
Have you had extra difficult clients?
How did you handle the situation?
Have you had to fire a client?
Let us know your comments for the community and to help each other out.
Please share this article with someone you think needs to hear this.
Thanks for being here, I appreciate you.
-Ramon