How To Terminate Your Engagement With A Client
As business owners, we often emphasise the importance of building long-term, sustainable client relationships and fostering a growth mindset. However, there are instances where cutting ties with a client becomes necessary. While it may not be a pleasant topic to discuss, it is crucial for business owners to understand that they cannot be all things to all people, at all times. I know this something I continue to work on myself, and I hear it often from my clients. In this blog, we will explore the significance of terminating client engagements, highlight the need for strategic planning, and provide actionable steps to ensure a seamless transition for both parties involved.
Recognise the Need for Change
First and foremost, it is essential to acknowledge that not every client relationship will be a perfect fit. Despite our best efforts, misalignments can occur, and it is not a reflection of failure. Putting undue pressure on ourselves to meet every client's needs can be counterproductive, turning into a lose, lose situation. The reality is things change, and it’s okay to let go of clients when the partnership no longer serves the parties.
Develop an Exit Strategy
Just as strategy plays a vital role in business growth, it is equally crucial when it comes to parting ways with a client. In business, strategy is your friend. I love a good strategy. And that applies to so many things in our business. When it comes to parting ways with a client, start by revisiting your client service agreement or your terms and conditions. Look for any provisions that outline the termination process, including notice periods and conditions for ending the engagement. This step ensures that you are well-informed about your rights and obligations and you can map out a plan from there.
Consider Key Dates and Obligations
Take into account any key dates or milestones related to the client's project or service. If there are time-sensitive deliverables or ethical obligations, it is crucial not to leave the client in a vulnerable position. For example, lawyers must avoid jeopardising ongoing litigation processes, while accountants and bookkeepers need to consider tax-filing deadlines. By understanding these dates, you can plan the termination process accordingly.
Assess the Need for a Handover
Evaluate whether a handover is necessary based on the nature of the engagement. If transitioning the client to another service provider or providing essential information is required, ensure you offer a smooth handover. This step demonstrates professionalism and prevents the client from facing undue disadvantages. (keep in mind, though, that not all service providers may require a handover, so this step ought to be considered on a case-by-case basis).
Plan and Give Notice
Craft a clear plan for terminating the engagement, including the notice you will give to the client. Prepare a well-thought-out email (or alternative method of communication if that is how you typically communicate with your clients), outlining the reasons for the termination, the end date of the engagement, and any necessary steps the client should take. By communicating clearly and objectively, you help both parties move forward with confidence, understanding their roles and responsibilities until the termination date.
Follow Through and Execute
Once you have developed your strategy, it is crucial to follow through with your plan. Stick to the timeline and commitments you have communicated to the client. This consistency reinforces professionalism and fosters a sense of trust. Be diligent in ensuring that any promised actions, such as providing documents or facilitating a handover, are executed promptly and efficiently.
Remember, be crystal clear on what you want to achieve, have absolute clarity around how you're going to do it, and then just do it.
Rip the band-aid off - it hurts much less in the long run for everybody involved.
While the thought of terminating a client engagement may initially seem challenging, it can be a necessary step to ensure the long-term success and sustainability of your business. Recognise that it is impossible to be a perfect fit for every client, and view the termination process as an opportunity to create space for more aligned partnerships. By adopting a strategic approach, clearly communicating your intentions, and fulfilling your obligations, you can navigate the termination process with professionalism and minimise any potential negative impact on both parties involved. Remember, it is a win-win situation when both you and the client find better-fitting relationships that meet your respective needs.
I discuss this topic in more detail in the episode Cutting A Client Loose on the Rise Up in Business podcast, which you may also find helpful.
If you have questions or you need some support in developing a client termination strategy for your business, reach out and book in for free chat here.
My Legal Advice for Small Business guide is another helpful resource to refer to.
