#116 Cutting a Client Loose
As business owners, we can’t be all things to all people and nor should we put that amount of pressure on ourselves. Despite beautifully tailored onboarding processes, discovery calls and efforts to serve our clients in the best way possible, we won’t always be aligned with everyone. And that’s okay.
Clients sometimes reach out to me for support when they’ve come to realise that they need to cut a client loose. This is a reality for every small business owner and, although it might feel awkward and stressful, there is a way to let go of clients in a clear, professional way which doesn’t leave your business exposed and which won’t leave a client unduly impacted or at a disadvantage.
In this episode, I’m sharing my recommendations for how to approach this situation and some clear and concise steps you can take if you need to let a client go. It’s really important to be crystal clear on what you want to achieve and have absolute clarity around how you're going to do it. Then, just rip the bandaid off!
I talk about the importance of developing a clear exit strategy so that the transition is as smooth as possible. Your service agreement will include a termination clause that you can refer back to, which is one of the reasons why tailored legal documents are so important. Make sure you look at your service agreement and understand the conditions that you’ve entered into with your client.
The next important thing to do is look at key dates, depending on what your business is and how you are serving your clients. Once you've got clarity around those dates and you can make sure that you are not leaving your client exposed, you then need to think about how you're going to execute the termination and if a handover is necessary.
I talk about how to plan for the notice that you’re going to give to your client; thinking about the reason you’re going to state, how to frame it and being crystal clear on your end date. Once you’re clear on all these things, both parties can move forward with confidence knowing that you won't be working together anymore and knowing what needs to happen up until the date of termination.
Remember, we won’t always be aligned with everyone and that’s okay. Cutting a client loose in this way will be a win-win. It allows space in your business for more aligned clients and will enable the unaligned client to find a service provider who is able to serve them in the way they need.
Full Transcript:
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[00:00:00] Tracey: Hello everyone and welcome back to another episode of the Rise Up in Business podcast. I talk a lot on the podcast about risk mitigation, setting ourselves up for success as business owners, protecting the business that we're building and how to build long-term sustainable relationships with our clients.
[00:00:42] I talk a lot about growth mindset and all the positive things that we can be doing in business. Today I wanna talk about something that's not quite as positive but it's equally as important, and that is cutting a client loose. This is a reality for every small business owner and in a service-based industry it's important that we recognize and understand that we are not expected to be all things to all people all the time. And I don't know about you, but I certainly put a lot of pressure on myself still to be all things to all people all the time, and to meet everybody's needs and to be what everybody needs all the time.
[00:01:21] What I see with a lot of business owners that I work with is that they place a lot of pressure on themselves and when things don't work out with a client, they see it as a failure, but it's not a failure.
[00:01:31] And that's what I wanna shine a light on today and talk about. So recently, I've supported a couple of my clients to put a strategy together to let go of one of their clients. it will happen. At various points throughout our business journey as business owners where we realized we are not aligned with a client, or the client that we're working with or we're supporting is not the right fit, and it goes both ways. If we are feeling it, then the client would be feeling it as well.
[00:02:00] So it's not a win-win. In fact, if we continue on and persevere, in my experience, it can be a lose lose. Clients reach out to me to ask me for support because they've reached a point where they are feeling an angst or a stress or a real concern or worry around a relationship they have with their client, and they need to work out how to let that client go or cut that client loose in a way that's not gonna leave them exposed and in a way that's not going to devastate or unduly upset the client. And strategy is really important, and you'll hear me say a lot on this podcast and indeed on social media where I'm very active and over on the website and amongst all of our resources there, you'll hear me say a lot that strategy as a business owner is your friend.
[00:02:47] I love a good strategy and it replies to so many things in our business. And equally as important is a strategy when we are looking to let go of a client or to part ways. So first thing I wanna say is, one, it's okay to not be all things to all people all the time. We can't be, and we're actually setting ourselves up for failure if we have that expectation on ourself.
[00:03:10] I've seen it time and time again, and it doesn't need to be that way. We don't need to be putting that amount of pressure on ourself. We are not aligned with everybody. Despite our best endeavors. Despite our beautifully tailored onboarding processes. Despite our discovery calls, there still will be a time every now and then where a business owner will get it wrong.
[00:03:31] We'll be caught by surprise or we'll be kicking ourselves because we will have pushed our instincts aside. We'll think, oh, I don't really know if I can help this person. Not quite sure we're aligned but on. Can't really put my finger on it so I'll, I'll take them on and we'll see how it goes and more often than not, when we start out that way, something happens later on and we realise, I was right. I shouldn't have taken this client on. I'm not best able to serve this person or this person's needs would be better met by another coach, creative designer, lawyer, whatever it might be. So we're not going to be aligned with everybody all the time, despite our best intentions. And that's okay too.
[00:04:10] We don't need to put pressure on ourselves. We don't need to attach guilt to this, and we most certainly, Don't need to attach failure to this. What I will say when it comes to your strategy to prepare to let a client go or to cut someone loose, it's vital that you spend some time getting that right so that the process can be seamless or as seamless as possible.
[00:04:32] my approach and my advice and recommendations, almost always center around it's like ripping the bandaid off. Be crystal clear on what you wanna achieve, have absolute clarity around how you're going to do it, and then just do it. Rip the bandaid off. It hurts much less for everybody involved. And if you've got children, you'll know exactly what I'm talking about.
[00:04:53] When you are developing your exit strategy to cut a client loose, the first thing I recommend you do is go back to your client service agreement. All the terms and conditions that you've entered into with your client have a look in there your exit strategy and what you need to do to terminate.
[00:05:12] If you've had your documents tailored for you, you'll know these inside out anyway, and there'll be a termination clause there that lends itself to letting someone go for any reason whatsoever. There doesn't need to be a breach of the agreement. There doesn't need to be something in particular that's occurred in order to be able to terminate, but you'll have the right to take steps to terminate the agreement or the engagement for any reason whatsoever upon giving a certain day's notice.
[00:05:37] So go back to your client service agreement. Have a look at what that says so that you're clear on your notice periods. The next thing to do is have a look at key dates, so depending on what your business is and how you're serving your clients. This will be different for everybody. So for example, if you are a lawyer acting in litigation, obviously key dates are going to be really important because you have an ethical obligation not to leave the client in the lurch such that they're going to miss a key date in their litigation process. Very similar for accountants and bookkeepers. We need to have a look at key dates to make sure you're not leaving a client in the lurch before bas lodgement dates or tax return dates or something like that so that the client's not unduly disadvantaged. Once we've got clarity around the dates and we can make sure that we are not leaving our client exposed, my recommendation is you turn your mind to how you're going to execute this and is a handover necessary. So if a handover is going to be necessary because of the nature of the engagement, then we need to make sure that we offer that to the client. So again, the client's not left unduly disadvantaged, and you're offering a handover if it's necessary, and it's not always necessary.
[00:06:48] For some service providers, a handover is not necessary. For others it is. So, for example, if I was to let go of a client whose contracts I was drafting, but there's no time pressures, then a handovers not necessary. whatever stage I'm at with the client, they may or may not have draft documents, they may have settled documents, they may have only given me instructions. But wherever I am, I'll have a look to see whether or not there's gonna be any negative consequence to the client if I terminated a certain time.
[00:07:16] The next step in this process is to plan and give notice. So have a plan on how this is to occur. Plan the notice that you're going to give to the client. Plan the email, for example, what reason are you gonna give? How are you gonna frame it? Are you offering a handover? And what are the timeframes?
[00:07:34] The third step is be clear on your end date. So once you have been back to your client service agreement, once you're aware of the notice period you need to give, once you've thought about key dates and you've given consideration to a handover what it is that you need to provide to the client or an alternative service provider, you can then get crystal clear clarity on your end date.
[00:07:55] Be clear on your end date because you wanna make sure that when you email your client, Most of these things are done by email, by the way, you can do it by a phone call, but I'll always recommend following up in an email. But when you send your email to the client terminating the relationship, so cutting them loose, you'll have a crystal clear end date so the client knows what's going to happen between now and the end date.
[00:08:16] What do they need to do? Do they need to engage somebody else? Do they need to pay your invoice? What is it that they need to do? The end date will be a clear line in the sand, so there can be no confusion, no misaligned expectations over what's to happen on either side of that date.
[00:08:32] So the client then, when they receive your email, knows exactly what's happening and they know exactly what they need to do and by when. Once you have developed that, you are then very well positioned to write a very objective, non-emotional email to your client. Terminating the engagement, setting out for them what's to happen.
[00:08:52] They know when it's going to take effect, and then both parties can move forward with confidence knowing that you won't be working together anymore and knowing what needs to happen up until the date of termination. This my friends, is how you let a client go or how you cut a client loose in a clear, professional way which doesn't leave your business exposed and which won't leave a client in a situation where they're going to be unduly impacted or whether where they're going to suffer an unfair loss or disadvantage as a result of the termination.
[00:09:26] So remember, we can't be aligned with everybody despite our best efforts and we can't be all things to all people all the time, and that's okay. but when you are preparing to cut a client loose, strategy is your friend. Be crystal clear about your exit strategy.
[00:09:44] Set it out clearly for your client in writing every time, and then make sure you act consistent with what you've said in your email to your client terminating. If you say you're gonna do something, make sure you do it.
[00:09:59] I hope that helps. I'm sure there are many of you listening to this right now where this might be resonating. You think, oh gosh, yes, I've gone against my instincts Tracy, yes, I've lived to pay for it, or it was really unpleasant, or I'm not sure that I'd served that client as best as what somebody else could've if they had to been able to meet their expectations.
[00:10:17] Sometimes expectations are just misaligned and there's not really a great deal we can do about that. So if you are listening to this and you are thinking it's time to let go of somebody, or this is giving you the confidence you need to take that step to let a client go, then let this be your sign that it might be time to sit down, revisit your client service agreement to make sure that you're clear on your timeframes and your obligations so that you can then take steps to let them go. Because as we all know, if we let go of clients that aren't aligned, It opens space in our business to invite aligned clients in so we can do our best work and serve the clients that we have in the way that we want to, and we're setting the client that we are letting go up for success because they're then free to go and engage another service provider who's going to better meet their needs, and that's a win-win.
[00:11:06] I hope you have found this helpful. If you are still nervous or if you have questions or you need some support in developing a strategy in your business to let some clients go, feel free to reach out. Book in for a free chat. The link is in the show notes. I'm always happy to help and if we can work together so I can support you then I'd be delighted to do so.
[00:11:26] Thanks so much for listening. As always, much appreciated. I will catch you next time.
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