Difficult clients. Every business has them. It’s one thing to have to interact with a difficult person, but when that difficult person is someone to whom you are trying to provide a service, it becomes even more challenging.
We’ve all had to deal with them in varying degrees – the client that argues, yells and complains; the customer that constantly calls, texts or emails and expects you to be available to discuss the portfolio; the customer that is never satisfied with his/her portfolio; the customer that is looking to get what he/she can.
Having disgruntled or high-maintenance clients is not a nice situation and one where independent financial advisors will do anything to avoid. “Remember that although firing a client is a very tough thing to do, continuing to work with an abrasive, rude, fee grinding, unappreciative, unethical or incompatible client is much harder on you in the long term. You know the stress these clients create for you and your firm. The truth is that they are not worth the stress and you know it, but you keep hoping they will just go away on their own. If that happened, I would not be spending many hours each month helping people rid their firms of these problem clients,” wrote Kevin Lawrence, a business coach and speaker in Vancouver, Canada.
Terminating your business relationship with a disgruntled or high-maintenance client may not always be necessary. According to Lawrence, in some cases you can “raise the bar and set higher expectations with them.”
“Never fire as the first step. Be sure you’ve raised the bar first. The most important part of this process is to ensure that you have been fair and professional with the client. That means letting the client know your expectations that are not being met.
“In most of the cases I see, the professional or business owner is frustrated with the behavior of a client and out of frustration, wants to get rid of them. The problem is that usually the client does not know that their behavior is unacceptable. And, because they’ve been doing the same thing over and over for the past 15 years, without anyone ever suggesting that there was a problem, the client assumed things were fine. The only person to blame here is the professional or business owner, not the client,” said Lawrence.
To try to correct the matter let the client know expectations are not being met and give them a chance to meet them. Lawrence suggests following up in writing. If the client does not reasonably meet your expectations, move on to what Lawrence calls stage two – ending the relationship. “Just as with an employee, firing a client shouldn’t come as a shock, unless a criminal or unethical act has been committed,” he wrote.
Ending a business relationship could negatively affect your reputation, taint your credibility and change how former clients reflect on the time they worked with you. With more than your business image at stake, it’s important to develop a drama-free strategy to help you end business relationships in a professional way.
Business coaches agree that you should terminate your client relationship in person, or if not in person, on the phone. “It is essential to speak personally with the client. No letters in the mail allowed at this point. That is not respectful. Ideally, meet your client face to face or, failing that, speak with them on the phone. Why? Because it can save you a ton of headaches. One practitioner I know of tried the ‘mail and pray’ approach to firing a client, and next thing he knew, the client was so angry at getting fired via a letter, he filed an ethics complaint. That was a mess,” warned Lawrence.
When speaking with your client, be honest as to why the business relationship is not working. Don’t place blame and don’t argue. Instead, state the problem and how it affects you and your business, and then offer your resolution of dissolving the relationship. Be respectful and professional. Manage your emotions and be mindful of your client’s feelings.
As an entrepreneur, it is hard to let go of clients, but sometimes, it is necessary. In the end, it comes down to whether you believe the relationship is worth keeping. A relationship with a client is no different than any other relationship, it requires work. How much work you are willing to put in depends on you.
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