Having a lot of clients at your agency is amazing, it reflects your ability to deliver effective business results for your clients and showcases your organization’s efficiency.
However, not all clients are that great. In fact, some clients can actually have a negative impact on your agency.
For this reason, agency owners and executives need to be very selective of the clients they take on.
And if you’ve realized that you’ve made a mistake, you need to know how to fire a client in an appropriate way so as to not damage your organization’s reputation or have any negative impact on your agency.
In this article, you will learn the proper way to go about firing a client from your agency. At the end of this post, you’ll also be able to download a sample letter that you can use to fire a client.
Since SEOptimer deals with thousands of digital agencies on a regular basis, we asked leading digital agency founders and executives to share their tips and feedback on how they go about letting go of their clients in a professional manner.
Agency Founders Featured in this Article
We’d like to thank the following contributors for sharing their professional insights and making this article possible:
- Lirim Ajroni, CEO and Founder @ Ajroni Enterprise. United States
- Brenton Thomas, Founder @ Twibi, United States
- Jason Rutel, Founder @ Creative Nomads, United States
- Darryl Stevens, Founder @ Digitech Web Design, United States
- Peter Mendez, Co-Founder @ Crafted, United States
- Aaron Gray, Founder @ Pursuit Digital, Australia
- Cassandra Gucwa, Founder @ Menerva Digital, United States
- Zack Bowlby, CEO @ ROI Amplified, United States
Why Fire a Client from Your Agency?
The truth is that sometimes agency client relationships go bad.
This can occur early during the client onboarding process or months into the working relationship.
However, firing a client is a decision that you shouldn’t take lightly. Just because you and the client are facing some problems or challenges doesn’t give you the permission to let them go.
Firing the client should be your last option.
Lirim Ajroni, founder and CEO of Ajroni Enterprises, a web design and digital agency in Florida, notes that they always try to find a solution together with the client.
“Before considering the decision to part ways, we exhaust all efforts to address any challenges. We engage in open and honest communication, seeking resolutions and understanding the client’s perspective. “
But because you’re reading this post, you’re probably past that point. Knowing when to fire a client is just as important as knowing how. There are several reasons that could be indications for you to let go of a client:
Consistent Late Payments
Like any other business, an agency also has to pay business expenses like rent, salaries, equipment, etc.
Although the digital agency business model isn’t that cash flow intensive, you still need to manage your agency’s cash flow and generate a consistent flow of payments coming in from clients in order to pay expenses and staff wages.
A client who keeps on paying late will put unnecessary strain on your cash flow. And not to mention, nobody likes to keep having to chase down clients in order to get invoices paid.
“If the client doesn’t pay invoices – you may need to pause working until they can pay an invoice.”
– Cassandra Gucwa, Founder at Menerva Digital
If a client keeps on delivering late payments or continues to haggle over price, it could be a sign that you need to get part ways.
The Client Keeps Making Unrealistic Demands
Agency life is all about doing your best to satisfy your clients and deliver exceptional services that yield real business results.
And yes, many times this will result in having to listen to a client’s unrealistic expectations, getting your team to work late, or revising ad creatives until the client is happy.
Some clients will likely push to get more out of your agency than what you’ve agreed on or what the project scope outlines. (E.g. Asking for consistent revisions to a design for a new ad campaign.)
Aaron Gray is the founder of Pursuit Digital, a leading digital marketing agency in Australia. Aaron believes that attracting the right clients is a matter of clear communication and setting the right expectations from the beginning.
However, he agrees that there comes a time when it’s necessary to draw the line.
“As for red flags to look out for when onboarding new clients, there are several. A lack of clear communication or unrealistic expectations can be early indicators of potential issues down the line.”
There might come a time when their demands become completely unrealistic and unreasonable. Scope creep is actually a common occurrence, and must be taken care of as soon as possible.
Image source: JadeALM
If this happens, you need to set a clear boundary and address the issue. However, if it persists, then it might be better to let go of that client.
The Client is Affecting Staff Morale
The types of clients you have at your agency have a big impact on your staff morale.
If a client is abusive or has a bad temper, and takes it out on your staff, then you need to seriously consider whether you want to keep them on.
You can’t have staff feeling demotivated because of a single client’s bad behavior.
Peter Mendez is the co-founder of Crafted, a creative digital agency with offices in New York City and Miami. He believes that one major red flag is when a client takes a heavy toll on team morale.
“Most folks might think you shouldn’t mix emotions and business, but here’s the thing, mutual respect is the hidden currency of creativity.”
This will not only have a negative effect on their performance for that specific account, but could even impact their overall work performance, leading to below standard quality of work on other client accounts.
Or even worse, you might end up with a team member resigning because of the toxic relationship with the client.
You’ve Exhausted All Options to Improve the Situation
If you’ve experienced consistent issues with a client and tried everything to improve the situation, then it could be a sign to terminate your working relationship with them.
The Situation is Having a Negative Impact on Your Financials
If you’ve been in the game long enough, you’ll see that some clients are just unprofitable.
Time is money, and if a client keeps wasting valuable time by rejecting ideas or taking up more time than what they’re worth, then you’ll end up losing money in the long run.
How to Fire a Client the Right Way
There are ways to go about firing a client without causing harm to your agency’s reputation. Keep the following tips in mind when you’re ending the relationship with a client:
Before officially communicating with the client, you need to prepare a document with all of the supporting reasons for firing the client. This document is for internal purposes only, and should not be shared with the client.
Darryl Stevens is the founder and CEO of Digitech Web Design in Austin, Texas. Darryl notes that you have to be crystal clear about why you are ending the relationship.
“No matter how much you may want to, it is never wise to simply fire a client without documenting the reason why. This can range from bad communication or lack of payment, but it is important to make sure that you are crystal clear about why you are taking this step.”
Call, Don’t Email
The worst thing you can do when firing a client is to just do it by sending an email. This is like breaking up with someone via text message.
Instead, you should have a face-to-face meeting or a phone call with the client to explain the situation and to deliver the news. This is also the ideal opportunity to discuss the account hand-over, give replacement suggestions, highlight project successes, etc.
Don’t Offend the Client
When firing a client from your agency, you want to avoid offending them at all costs. A disgruntled client may bad-mouth your agency or leave a negative review of your agency.
Although the client is likely the reason for the relationship turning sour, you shouldn’t make that the focus point of the conversation. Cassandra from Menerva Digital gives a good example of how you can shift the blame away from the client.
“Our company is pivoting and needs to focus resources in a new direction, which means we won’t be able to continue servicing you how you need to be serviced.”
When you’re having the discussion with the client, be sure to use a calm tone and neutral language. The last thing you want to be doing is start a conflict or an argument, so reframe from sounding aggressive.
Brenton Thomas, founder of Twibi, a digital agency servicing clients from all over the world, emphasizes the importance of remaining professional when firing a client.
“Even if you are firing a client, it is important to be professional. This means communicating with the client in a respectful and clear manner.”
Brenton notes that firing a client can be a messy process and that agencies should be prepared for a potential fallout from the client.
“The client may be angry or upset, and they may try to damage your reputation. Be prepared for this and have a plan in place to deal with it.”
Finish Current Deliverables, Don’t Leave Them Hanging
Instead of just leaving the client to dry, you need to ensure that you finish the current deliverables and wrap up any outstanding projects.
Also check to see that you adhere to the terms and conditions as set out in your contract with the client.
“We usually try to make it work but if we can’t we typically let them out of their contract. No matter what happens we leave them in a better place than when we started.”
– Zack Bowlby, CEO at ROI Amplified
As you finish off the current deliverables, ensure that the quality of your work remains of a high standard. Even though you’re terminating the relationship with the client, you don’t want to give them any ammunition that they can use to bad-mouth your agency.
Part of this process entails giving a client a handover document that includes all the passwords and login credentials to accounts you created on their behalf, a list of any assets you made, takeover instructions, pending projects, etc.
Image source: Smartsheet
Jason Rutel is the founder of Creative Nomads, a digital agency based in Northlake, Texas. He emphasizes the importance of upholding your commitments with clients and believes that it pays off in the long run.
“We fulfill any remaining obligations, and if needed, I assist them in finding an alternative service provider.”
Don’t Let the Client Sway You
If you constantly deliver exceptional service and generate business growth for your client, they’ll probably want to convince you to rethink your decision.
This is because they’ll be worse off without your services.
Even if the client tries to pull out all the stops and makes all sorts of promises, you want to remain firm and stick to your decision.
Besides, if the client sees that they have the ability to change your mind, then you’re giving the client the upper hand and they’ll likely continue to give you problems down the line.
Sample Script to Fire a Client
Here’s a sample script that you can use if you don’t know what to say when firing a client.
Hello, [Client’s Name]. I wanted to have a conversation with you today about our professional relationship.
After careful consideration and discussions within our agency, we believe it would be in the best interest of both parties to terminate our engagement.
We value our clients and strive to maintain partnerships based on trust, respect, and shared goals. However, despite our efforts to address certain concerns and meet your expectations, we have encountered ongoing challenges that have significantly impacted our ability to deliver our services effectively.
Specifically, we have faced the following issues: [Briefly describe the concerns or challenges you’ve encountered].
We understand the importance of a smooth transition, and we are committed to ensuring minimal disruption to your operations. We will provide all necessary documentation, assets, and information related to our work together, allowing for a seamless handover to your new service provider.
We genuinely appreciate the opportunity to have served your company and are grateful for the experiences we have shared. We wish you the best of luck in your future endeavors and hope you find a partner that better suits your needs.
Thank you for your understanding regarding this matter. We truly value the collaboration we’ve had in the past.
Firing a client isn’t an easy task and should be carefully considered, since this can have a big impact on your bottom line, especially if it’s a big client.
With that being said, toxic clients can actually do more harm than good, and can stifle your agency’s growth and have a negative impact on general employee satisfaction.
Don’t worry though, for every bad client, there are probably five other great clients out there.