Divorcing a loyal client
How do you say goodbye to a client that you may have worked with for many years, who has been loyal to you, and has given you no reason to earn your disfavour other than they no longer fit in with your plans for the agency? If you think this could be a little like breaking up with your girlfriend or boyfriend (or, worse, getting a divorce), then you are not far from the heart of the situation.
What would be the reasons a company would wish to say goodbye to a loyal client?
Scenario 1: Your agency has moved past the stage of taking on anything and everything just to keep cash-flow healthy. The time has come when you can afford to be more choosy about who you work with.
Scenario 2: You conduct a strategic analysis on your client to determine revenue, gross profit, amount of time invested vs return, etc, and the results indicate your client is unprofitable or of low profitability.
NOTE: A helpful customer lifetime value (LTV) analysis method can be found here.
Scenario 3: Your values/vision/ideals/goals/ethics diverge from those of your client.
Scenario 4: You want to take on account which is in direct conflict to your existing client.
Scenario 5: The demands of your client are requiring you to take on projects outside of your core competencies.
As the Account Manager on this account, you will - inevitably - be part of the "divorce" process. As much as your boss will tell you this is "purely business", the reality is that you are a good Account Manager and you care about your client. You have spent countless hours building up your relationship only to have it end. The thought of breaking up hurts you, and you know it will hurt your client. This is one of those unfortunate occasions where the merging of head and heart will invariably cause some pain.
There are two main ways you can part company with a client - the subversive, cowardly way; or the fast, transparent way.
Subversive and cowardly
- Divorce by neglect: You could ignore your client until your client-love is in such deficit that your client will begin to look elsewhere for some attention.
- Divorce by sub-par service: Long turn-around times; broken promises; proofs riddled with errors. Eventually, your client will give up granting you second, third and fourth chances.
- Divorce by pricing: You could keep increasing your prices until you price yourself out of your client's budget range.
If you are an Account Manager who actually cares about your clients, you won't be adopting any of these "techniques" in a hurry (even though some agencies do). You will be quite aware that these methods will end up damaging your own (and your agency's) reputation, and reputations are not easily repaired or forgotten.
Fast and transparent
- Meet face-to-face. Have a formal letter of explanation prepared and printed out, but make your initial announcement face-to-face (you owe your client at least that courtesy). You can give them the letter at the meeting.
- Be as honest as possible about why you are making this decision. If another (competitor) client is involved, then say so. If the decision is based on revenue consideration, then tell them. An honest explanation will help soften the blow.
- Be empathetic. You are the bearer of unexpected bad news. Your client is likely to be feeling shocked, perhaps personally hurting, and trying to process all you are communicating in a short space of time.
- Smooth transition. Explain what you will do to make the transition, to a new agency, as smooth as possible.
- Notice period. If your client gives you regular work, then try and offer a notice period, giving reasonable opportunity for your client to find a new agency.
- Show your sincere appreciation. Tell them how much you have valued their business, and that you wish them well for the future.
Watch out for the fine print
Before you divorce a client, be sure to check if there are any agreements or contracts in place. This could include a pre-existing agency contract, SLA (Service Level Agreement) or hosting agreement. An existing contract may require you give a notice period before severing ties, and you may need legal advice.
Assess all repeating tasks you perform on your client's behalf. These tasks could include domain name renewals, website hosting, website maintenance, social media facilitation or analytics reporting. Responsibility for these things should be transferred into your client's control as soon as possible. Don't forgot to supply your client with all of their login information and passwords.
As your agency is the party cutting the business ties, you should retrieve all of your client's past work off your archive system, save it to an external hard drive (or similar), and present the files to your client at the time of your final meeting; and all of this should be done at no charge to your client.
Think of the end-process like nurturing a plant. Sometimes you will have to cut away the excess growth if you want the plant (your agency) to grow bigger and healthier and for the fruit of success to form. The trick is learning to be a gardener who trims with hand pruners rather than a weed-whacker!
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