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The HaBO Village Podcast

When to Fire a Client [Podcast]

Episode 23: In this episode, Kathryn and Michael discuss how you will know it's time to fire a client. In the business world, 20% of your customers will cause you 80% of your pain. But how exactly will you know it's time to say goodbye? Discover the answers in this week's podcast!

A line of blocks representing employees

In This Episode You Will Learn:

  • Reasons why it's worth cutting a client loose.

  • Examples of situations you'll need to watch out for.

  • How to set clear expectations with your clients to avoid the need to fire them in the future.

  • Why firing clients will help you build your Passion and Provision company.

 

"...sometimes the customer isn't always right."

– Kathryn Redman

References:

The Ideal Team Player by Patrick Lencioni

 

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Michael:         Hello and welcome to HaBO Village. This is Michael Redman.


Kathryn:
      And this is Kathryn Redman.


Michael:
      And we are exuding energy this morning.


Kathryn:
      Well you're exuding energy. I had a hell of a work out.


Michael:
      You just cussed on our podcast.


Kathryn:
      Oh I'm so sorry. I have a shirt.


Michael:
      Our people have delicate ears.


Kathryn:
      Oh I'm so sorry. I take it back.


Michael:
      I'm sure they don't have delicate ears if they listen to us more than once.


Kathryn:
      Those of you who work out, do you ever go to work out and just think that your trainer has laid awake for like three days just inventing new ways to hurt you? That was my experience this morning, so.


Michael:
      And those of us that don't go work out we don't think about that at all. All right, today we're going to talk about when to fire a client, because you know what, have you ever had that situation where you just are going nuts and you've got clients, customers, that are just killing you, that are making so many demands. They're frustrating, and you're like why am I putting up with this? Or, your staff comes to you because maybe you've created a company that you don't have to deal directly with the customers any more. Or when they do come to you, it's a huge mess. Well, how do you know when to fire them? Because you know what, you sometimes should let a customer go especially in the process of having a Passion and Provision company.


Kathryn:
      I agree, because the reality is the customers that are making you crazy, and you... not like an immediate, like for some there's an issue... but when there's repetitive issues and no matter what you do you can't seem to solve them, we're going to break some of that down. The reality is they are going to be sucking the life out of your people, out of your company. You know, they're the ones that you lay awake at night and your stomach feels sick because you have to have a conversation with them the next day and you just know they're gonna be like... like they're never happy. There's nothing you can do. So we just want to talk about what the scenarios are that we believe it becomes important to say, no matter what the cost, it is worth considering cutting this person loose.


Michael:
      Yeah, absolutely, because these are important things. So let's dive in. One of the things that we always talk about around here, and you've maybe heard about this, most people have. It's the 80/20 rule. If you don't know this, or if you do, you'll like this. A guy by the name of Pareto, a long time ago... I think in was in the 1800s... actually came up with the whole concept. He was a mathematician I think or something like that. Somebody will correct me. I can't remember, I learned it at one point. Anyway, Mr. Pareto, he understood this whole idea that basically, and for those of you that haven't heard about it or you don't understand it, 80/20 rule says that basically 80% of the value comes from 20% of the work.

                                    So, let's see... the Pareto Principle is derived from Vilfredo Pareto's observation that only a vital few of certain things... oh, he was looking at peas, and his garden produced the majority of peas. The pods produced the majority of peas. And then it got converted over into 80% of the effects come from 20% of the causes. So, why is this important? Why are we talking about this? Usually 80/20 rule is talked about 80% of your profit comes from, especially in business, 80% of your profit comes from 20% of your efforts, 20% of your customers, and what we have found is 80% of your pain also comes from 20% of your customers.

                                    Might be less, but it's the idea is that you have a tremendous amount of pain in your company when it comes to customer stuff and things that come from just a small amount of them. And there's an old myth. I have hated it. I was raised on it. It was the customer is always right. No matter what. And some people hold onto that as a religious fervor. They hold on and say the customer's always right and we can't get rid of the customer and we can't do this and ahhh. And I was raised with this and I believed it for a long time. I recited the mantra. I was part of the customer's always right cult.


Kathryn:
      Yes. So we're going to tell you this great story to illustrate how sometimes the customer isn't always right. One of the ways that we know and you know that it is a good idea to part ways with a client, is if they violate your values. So we've talked about in the past you really identifying, you know, as the leader of your organization and within your organization, what are the values? And these are the things that if you had to stop doing these specific things, you would rather go out of business than continue to try and proceed without them. So that's what we mean by values.

                                    So Michael and I had the opportunity to-


Michael:
      And those are core values.


Kathryn:
      Core values, yes.


Michael:
      Core values.


Kathryn:
      So there's usually only three or four of them and they're the stuff that define you, that you hold super tight. So Michael and I, last week? Two weeks ago? Can't remember. We got to go to an event where Patrick Lencioni was speaking and many of you will know who that is. If you've been around the business world he's written a ton of books. His most recent one is The Ideal Team Player.


Michael:
      Yeah right. Five Dysfunctions of the Team, and stuff like that.


Kathryn:
      Of a Team, The Advantage, I mean he's just written a ton and is a consultant. He works with very large companies on organizational health and team building, all that kind of stuff.


Michael:
      He believes organizational health is the strategic advantage area in companies today. Because information and skill is no longer a strategic advantage.


Kathryn:
      No, and so we are huge fans of his work because when we talk Passion and Provision, that's a lot of what we're talking about is really what is the health of your organization and how does that position you to be successful in your own life, and then within your company and with your employees. So he told this story. He's done some consulting for Southwest. Someday we may be big enough to do consulting for Southwest, but in the meantime, I will live on other's stories. If you've ever flown Southwest, you probably are aware that one of their core values is humor.

                                    So you, depending on the flight and the snarkiness of the stewardesses and the pilot, you're going to hear all kinds of interesting comments throughout the safety checks and the landings and all the different things that they do, because they value humor and they want everything to be kind of upbeat and light-hearted. So big value for them. And he tells a story where a customer sent in a letter to corporate headquarters and it was a complaint letter. And she essentially said, "I am a frequent flyer. I spend a lot of money with your airline. But I am concerned about the fact that you guys make jokes during the safety briefing."


Michael:
      Ooh bad.


Kathryn:
      Bad. "And this is serious stuff. People need to understand what really needs to happen and if we actually have a water landing. Right? So the idea that you're joking through it is really bothering me and I think you need to address it." So, Patrick said you're typical response from a customer's always right perspective would be, "Well ma'am, thank you so much for your input. We don't want to lose you as a customer, so we're going to address that with the gate agents and just make sure maybe we ease up a little on the humor, because we see your point and we understand. And yes we take safety very seriously and we don't ever want you to think we don't." Blah, blah, blah.


Michael:
      Blah, blah, blah.


Kathryn:
      That would be the standard response, and most people would applaud said response. Yay, good job. This was Southwest's response. They sent a letter, it had three words on the letter, and all it said was, "We'll miss you."


Michael:
      I love that. The whole room just howled.


Kathryn:
      I mean that is brilliant. She was coming against one of their core values, and they basically said, "You know what? You're clearly not part of our tribe. We cannot continue... we can't please you so we'll miss you." And that's all they said. And I just thought that was an incredibly brilliant example of parting ways with somebody because who are they are violates... and then what they care about violates core values. So Michael why don't you tell the story about the time that we faced that with our business?


Michael:
      You know, we've had so many different opportunities.


Kathryn:
      You have.


Michael:
      We've had a lot of opportunities because being in business for 15 years, we've seen a lot of this. But one time, our office manager, general manager at the time, several years ago was on the phone with a client. This client happened to be in Manhattan. We'd had them for, I don't know, a year and a half, two years at the time.


Kathryn:
      Yeah, something like that.


Michael:
      Something like that. And they weren't a big client. They were... they started out with a really small, small, small refresh on their website and a couple of things like that. We were helping them and we were growing a little bit. And all of a sudden they had a meeting. We had this new employee starting and our GM said he thought it would be good to have this young man sit in on the meeting. So it was his first week. And all I know is, I caught up with them later and they were both wide-eyed after the meeting. Basically, this meeting had... they had been reamed by the client. The client went off on them for some reason. The client yelled at them, and then the client said, "You're not trustworthy."

                                    Now, if you've been listening to this podcast at all, you know trust is a huge value for us. Huge value.


Kathryn:
      It's followed up sort of closely by kindness, right? Trust and kindness are really big core values for us.


Michael:
      We're really big in emotional health. Look, I don't care if we have a hard conversation. Matter of fact I invite hard conversations, but it better be civil. And if it's not civil, we have another problem and I will unleash on that. Yes, so anyway, so I was... as a CEO, I was rather miffed, because not only had you come at our company, you came after my people. And you violated a couple of core values. So this client was a fair... it was a decent amount of money at this point. And this client received a email from us. It might have been even a letter. We might have actually put it in snail mail, I don't remember, but probably not.


Kathryn:
      No, I think it was email.


Michael:
      Email? And it was... we crafted an email that said this is not the way that we conduct business and it is now time for you to find another agency.


Kathryn:
      Good luck with your life.


Michael:
      Good luck with your life. It was our long version of we'll miss you. This was at least four years ago.


Kathryn:
      Maybe even five.


Michael:
      Maybe even five. They... and the reason I'm telling this, this is just kind of one of those epic things. There have been others that have happened along the way and we've got a few stories, but this one was so significant. And they came back and actually apologized.


Kathryn:
      It's like we're just New Yorkers. That's how we do it. It's what we do. It's like it being a deli and we can't help yelling. We didn't mean it. We trust you, we were exaggerating.


Michael:
      Quite frankly I don't care. I don't care. You have to, no matter where you're from and no matter what your culture is, you have to watch your words. Words are important. Words are hard but words are important and they matter. So, we worked through it and they apologized. I was really... I wasn't looking for an apology. I was... this is over, we're done. You stepped over a line that you just don't step over. And in a business environment, if you can't... when a client, when another person does that to you including a client, it often takes great courage, and I'm not trying to tout my own horn here but it does, it takes great courage because what you're saying goodbye to is revenue.

                                    And a lot of people, and we're talking to people with leadership roles in small companies, you have the authority to fire a client. In a larger company, or in a bigger structure, if you're not the head person or anything and you don't have this authority, then this is something that you got to talk with your leaders about. You may not have this authority, but for those business owners and leaders, you have the authority to get rid of a client, and you've got to make sure that it doesn't destroy your culture.

                                    That's why if somebody's violating your value, whether it's a customer or an employee, you have to cut the cancer out. I know that's harsh words, but it is. It can destroy or radically reduce the productivity in your company. It can... you would subject your employees to people who are caustic customers, and they're going to go after a while. You're going to have greater turnover, you've going to have less productivity, they're going to feel beat up, and they're going to believe that you think that they should be the whipping boy or girl.

                                    You can't afford that. I don't think it ever was appropriate, but it was more acceptable then 20, 30 years ago. Now, and even in some industries today it's still more acceptable by some people. But they finally came back, they apologized, and we kept them as a client.


Kathryn:
      Yeah they're still a client. They never-


Michael:
      They never raised their voice again.


Kathryn:
      They never acted out again.


Michael:
      And they didn't seem to need that. They didn't even feel like... I never felt like they were holding back. I felt like they just became more civil, and quite frankly they ran into a difficult time financially just in the last year and they came to us and said, "We're in trouble, and we made some poor decisions on our side," and we have been working with them. They're still a client. They've had to reduce radically some things that they're doing so that they can survive. But it's been really, really good because they have talked to us, and we made this commitment to cut them loose because they didn't hit our values. They apologized and came back, and aligned even more with our values. And then that had payoff because not only did their spend increase, the lifetime value of that customer to us financially, increased.


Kathryn:
      And the stress of working with them decreased radically.


Michael:
      Radically. And then when we hit a place where they could, they literally had way too many debts, we could have been written off and just sent our way. And they owe us a bit of money. What they've done is they've gone out of their way to communicate with us. They've gone out of their way to tell us that they value us, and they have demonstrated that in their actions. We're one of the smaller clients that they owe, one of the smaller debts that they owe. They could have just said, "You know what? Everybody else is screaming too much." They're not. You know, they're not doing what we want them to do all the time, but even in the situation where hard things happen, healthy environment breeds respect I think. But you have to set that line, and then we did that with this client.


Kathryn:
      Well it happens a lot. I mean we were just in a conversation yesterday with a client of ours who really needs to probably fire one of their clients, and there's a nervousness to that because that particular client represents a significant chunk. I mean, it's a property management thing, this client represents like 50 houses, but-


Michael:
      And if you don't know anything about the property management world, that's a lot of houses.


Kathryn:
      That's a lot of houses that they rent for him, that kind of thing. So it's a pretty good chunk of revenue. They've been living in a place of fear of if we let this go, then what happens and how will we make ends meet? But if they don't let him go, then he's violating their values. It's almost at the point where he's endangering their license, and that's obviously something that gets little more cut and dry.


Michael:
      And our client is looking at this and they're finally making those decisions in an appropriate way. And they're saying, "Our values are too important." Which is great because we have clients that have a similar management decision or management thought on how important values are. So, you know, another reason why... so there's several reasons why that we'll talk about it. One is they violate your values. That's why would you would let a client go. Another one is you can't satisfy no matter what. Everything's just always difficult. Sometimes that starts right out of the gate. Sometimes it grows down the line. And we're talking about service examples right now, but let's talk about a B to C, business to customer, consumer retail type of stuff.

                                    We've got a client who they sell products to people who have pet rabbits. So we sell hay and stuff like that. And disclosure, we're part owner in that company. But what happens in that company is, you have people who spend, their lifetime value isn't thousands it's hundreds. They might spend, you know, three or four hundred dollars in a year, or some of our clients... okay, here's a great example. We were looking for this in our notes prep time but, so I'm going through our Amazon reviews yesterday.

                                    I find a two star review. Or it might have been a one star review. Yeah, this was very painful. This is very like, okay, across the board to give you context, across the board... Kathryn doesn't even know this yet... across the board we have a 4.9 star rating average across all of our products on Amazon.


Kathryn:
      In the hay company.


Michael:
      And for Rabbit Hole Hay. Okay? Rabbitholehay.com if you have a pet rabbit go buy hay from us. Okay.


Kathryn:
      Shameless plug.


Michael:
      All right, so this woman... so we sell samples so people can get a sample. We sell these little one pound things, which is about as much hay as a rabbit is going to eat in one to two days.


Kathryn:
      Yeah and it's a varietal, so we sell like five different types of hay, so.


Michael:
      Right. Well but we sell one pounds. We sell five pounds, 10 pounds, 20 pounds, 40 pounds. Okay? So you can see that the majority of our sales are going to be in more volume. And this woman opened up a one pound box and was frustrated with the way it was packed. She was frustrated with the way it was bagged and everything else. And it turns out we actually made a change in the way we packaged our stuff for her and we made comments on that and everything else. We sent her a free box with the new bag and all this stuff, and it made it sound like she was this huge amount and she had one pound of hay. One pound of hay is not much hay.

                                    It was just like this very frustrating... and we went out of our way to do it. Well here's... she didn't even acknowledge that we did anything to try and help or anything else. It was just rail on it. And reviews online can be that easily. So there's a customer right there where, how do you... you can't help them and they're not spending any money. So the idea that the myth is the customer's always right, it's like how much time and energy do you spend on this person to make them happy when they're not spending any money with you, or hardly any money with you, and then when you do something right to try and fix it, they don't ever acknowledge it.


Kathryn:
      So the next step is-


Michael:
      We'll miss you.


Kathryn:
      Or not. We won't miss you.


Michael:
      We won't miss you at all. And we just kind of go, you know what, we've done what we can, we walk away, and that's just life. And we have a one star review and we have a couple of other bad reviews, but again, over all the stuff on Amazon we have a 4.8, 4.9 out of 5 star average. So you look at that. That's in the product. That could be a retail brick and mortar place that you have, if you have people coming in. Sometimes you just have customers that are too difficult, and you need to say sometimes, "Then maybe we're not the best place for you. Maybe there's another coffee shop out there that you should go to." "How dare you tell me to go somewhere else?" "Well clearly you complain so much about what you're getting here, service, quality, everything else, why do you keep coming back?"


Kathryn:
      Please don't.


Michael:
      Please don't. And sometimes you need to say that. And sometimes, you know we had this client that we brought in that he came in with one expectation and we thought it was going to be a certain relationship and then they shifted things quickly on us. So that one above RHH.


Kathryn:
      Yeah, so I mean part of it... so there's a couple things in this example that I wrote down on our notes. So there was a shift in personnel that changed the relationship, so we established the relationship and trust with one person and then there was a personnel shift and the new contact person was somebody completely different. So that's always a little bit interesting.


Michael:
      I'm sure that's never happened to our listeners.


Kathryn:
      Never. So we navigated through that, and launched into his contract, it was an annual contract, and they were starting a product online that they hadn't sold online before, they'd only sold it retail. We were helping them build that. So we had sort of levels and expectations and because it was brand new and it was an industry that's fairly young online, it was difficult to assess those things. What ended up happening really is that we were working about twice the number of hours in the contract, and even with that they weren't satisfied with the results. We looked at the results from a business side, and went, "Oh my gosh it's actually like working, like it's growing." And we thought the numbers were amazing, but they were not amazed.

                                    Their ability to, I think, exercise the level of patience it takes to really build an online following and an online business was... they were a little unrealistic. So it just came to the place where it was time to renew the contract and neither side was really particularly interested in doing that because we knew to meet their expectations we would need to double the size of the contract because we were losing money on the deal. And that was a really easy decision to say, "You know what, it's not that this hasn't been valuable, but we don't want to move forward with this."


Michael:
      Well I want to speak to that because here's what you do. We're the podcasters, we're telling you you need to fire clients, we don't always fire clients. This client, we were making some... we were making our own internal decisions that were poor, inside. And one of them was, we had a contract and we weren't confronting certain things that had changed, because they weren't black and white. They were kind of subtle gray things. I mean we let this go and we let that slide, and they weren't these big things but all these little things started adding up and then all of a sudden we found ourselves in this completely different place, and we were trying so hard to help them be successful.

                                    We literally were delivering somewhere around 2.8 times what we had promised we would deliver. In hours. So, if we said we were going to give you 40 hours a month, we were giving 2.6, 2.8 times that. Almost three times the amount of stuff just to try and be, help them be successful. And they didn't see that, because we didn't do a good job communicating it regularly, but even when we did, they didn't want to see it, because they thought that if they just say, "Well you're not producing what we want," and they were completely unrealistic in our mind, then that they would somehow ignite it.

                                    We let that all happen at the end. We should have let them go before and we didn't. Or we should have put our foot down and said, "You're asking for stuff but this is not what we decided to do, and you're changing your business goals, and your model also, every step of the way. You're just like well this didn't work because we tried it two weeks ago and it didn't really make a big change." And we let this happen. And we're business consultants. We knew it was going sideways but there was something in there... I'll tell you what folks, we have fired people before... there was something in there that was just so difficult for me personally to step in and go, "We're done."


Kathryn:
      Yeah. Well and some of that is I think from even when you realized that you can't make a client happy, there's a sense of failure. There's a sense of I really thought that this was going to work.


Michael:
      I don't like to fail.


Kathryn:
      And owning that, and I think that's why sometimes you press in harder to try and solve things that ultimately as you look back possibly weren't solvable. So you've extended the problem and roughed up your staff a bit in the process. It's a fear of failure.


Michael:
      Totally. Well and-


Kathryn:
      So there's a revenue loss, but then there's a we have to admit that we couldn't actually do, you know, what they think we should have done. Whether that was right or wrong.


Michael:
      It wasn't a huge account, but it was a decent account. And there was a fear of losing the revenue also.


Kathryn:
      Absolutely.


Michael:
      So you compound these things and I'm saying this... we're saying this to you folks because we know you struggle with these things. We talk to business owners all day long every day. And we get into really human conversations where we're all honest and we see it. We're just trying to be honest and vulnerable going, "Look this happens." And as good as we are at what we do, there's still those challenges you face and you kind of... some of the core issues of, they kind of keep raising their head every once and a while, no matter how big the client is, no matter how many zeros are involved or how many commas are involved or anything. So just so you know, we get it.

                                    It's a part of the process of continuing to go okay. And I'm hoping that for some of you today, this is going to give you permission to step out of some pain that's not required pain.


Kathryn:
      Yeah, and to believe that with that pain reduced, you will have more creativity and more energy to go after replacing them with something less painful. And that's also true, is it's those kinds of fears and anxieties can weigh you down enough that it limits your ability to be creative and think strategically and do the things that you should be doing that would grow your business. So it's that kind of a compounded challenge.


Michael:
      So what happens when they're no longer a good fit? Do things change Kathryn, have we seen that?


Kathryn:
      Yeah, so I'm actually meeting with a client later today that I really am hoping that I can let them go. And that they will... I love them, so.


Michael:
      You have them for six years, seven years?


Kathryn:
      Yeah, probably seven years. And really, you know, what's changed in that relationship is that when we were first were working with them we were doing the stuff that we were really good at. So we were being strategic and we got to be creative and we got to generate lots of ideas, and act on those ideas. So there's a period in our relationship where we were able to be doing the things that are our actual sweet spot with this client. They were never an easy client, but we were able to operate in our sweet spot with them and that was a good thing. But over time, for a lot of reasons, we really have sort of become nothing more than order takers for them. So, we're not getting to be strategic anymore, we're not getting to do the things we're good at. We're just say... I just get the phone call, "Do this, do that, do the other thing." So while I don't mind serving the client, it's no longer the best fit for us because we're not operating in something that is our best place.


Michael:
      Well and he's violating... the client has been violating what we believe is wise decisions and principles, because he's like, "Well no, I don't want to do that." Well, okay, so-


Kathryn:
      Yeah, he's not taking the advice anymore. And so yeah it's-


Michael:
      It's not that our egos being broke, it's like we don't think he's making good decisions. We're not working in our sweet spot. And where we can help, he's not letting us help anymore. We learned a long time ago... it actually was a significant thing in our business model years ago... is we realized they weren't coming to us for business advice, they were coming to us without a strategy and they thought they had one, but it turns that they... it was really full of holes. And they were just saying I want you to build this. I want you to do this. And we were mid-way down to the river. "I just need supplies, give them to me I have my plan."

                                    And then because they didn't have a plan, they really didn't have a plan, what we would build for them didn't work. Or it was radically impaired. And then they would look at it going, "What you gave me didn't work." Because there was an assumption for them that they had this perfect plan when they didn't have any plan, and we started discovering this and that's how our evolution of moving into consulting... because we moved up river. We moved to the head of the water where you have to think about things and plan things, so that when you get to the place where you're going to build a website or build a commercial or do this or that, it fits within a strategic plan that has some evidence that it's going to work.

                                    That's what started happening for us, and it actually shifted and sometimes clients... it's been said by a lot of consultants out there that even work with agencies, within four or five years, the average client... and we're fortunate because we've got clients of eight, ten years that are still taking our advice... but after four or five years, a lot of clients will go, you know, they're used to you, they don't think your advice is special anymore and they don't want to take it anymore. Whether it's good or not. That's not the issue. There's almost a too familiar. And so, we've been told that we should be getting rid of clients somewhere around four or five years, and cleaning our roster because of that. I don't want to do it that fast.


Kathryn:
      What happens on our side too, is that when somebody stops taking your advice, you stop being creative for them. So it's kind of this nice little loop thing because it's like well if you're not going to take my advice, then I'm not going to spend any time thinking. And then when you ask the next time, "What are your ideas?" I'm not going to have any. And that's also the cycle of what happens, at least in our industry. So yeah, I think there's just a sense in which there are clients where their relationship has done its course and it's just time.


Michael:
      Well, and this client that you're going to meet with today, I think it's worth sharing with everybody that they didn't just become jerks.


Kathryn:
      Oh no... I adore him.


Michael:
      They're business model and everything they started doing started shifting and changing and even this leader, whose been with the organization a long time, is... when we started he was, you know, seven years younger. And he was at the latter part of his career. You can see the emotional fatigue in his leadership, and he just kind of is tired. He's tired of pushing the organization. He's tired of having bad hires and trying to recover from it. He's looking at retiring. So there's whole lot of shifts in the organization that have occurred that are just like, "Okay you're not even going after that and so you've shifted and grown away from us in some level. Not just ignoring us, but you've grown in a different direction."

                                    And that is important to notice because sometimes organizations just grow and change and the goals change. And that's okay but you have to acknowledge it because it will start to cause more and more pain, because the expectations of you being effective or delivering a good product or delivering a good service are still there often for a customer. And that's where the pain comes in. I think-


Kathryn:
      That's a pretty good list.


Michael:
      I think that's a really good list for today. Let's recap real quick. So-


Kathryn:
      Go ahead.


Michael:
      You sure?


Kathryn:
      Yeah. Go ahead.


Michael:
      No, I don't-


Kathryn:
      Recap away.


Michael:
      I don't want to take it from you.


Kathryn:
      No, let's not argue on tape.


Michael:
      So the 80/20 rule, not only does 80% of your profit come from 20% of your customers, you can find their inverse of that of 80% of your pain I think comes from 20% of your customers.


Kathryn:
      So identify who those are and consider how you can either solve it or part ways.


Michael:
      Yeah, and then some of the reasons that you would part ways, is you can't satisfy no matter what. You've gotten in a situation where it's a bad cycle or anything else, or poorly set expectations from the beginning, but things have changed or whatever. And if you can't satisfy them, then stop trying. And realize that you need to cut that loose.


Kathryn:
      Yeah, another one that really matters a lot is obviously if somebody's violating your values. So just really important that you don't keep clients as part of your community who absolutely come against your values. It's just unhealthy and you need to let them go.


Michael:
      No longer doing what you're good at. That'll also is important to think about. They want you to do something that's not your specialty anymore. Maybe you've changed as a company, but you've got to realize. So, you can't satisfy them no matter what. Maybe you're no longer doing what you're good at. They've violated your values. They're just no longer a good fit. Or, and remember the values... Southwest values humor. And in this person's flying enough, but they didn't appreciate that core value. So, we'll miss you. Don't be afraid to tell people, because it's just going to happen and sometimes it just happens over time. And to the ability you can, to really set expectations clearly, and then be able to assess and make sure that the client understands those expectations that you have of them and they have of you. Sometimes clients don't even understand the expectations they have of you, they just kind of operate out of an emotional side. But to the extent you can articulate those things, and then really work on competence and character in a Passion and Provision organization.

                                    Those are the things that are going to help you fight the idea of bad clients, but sometimes there's just no more you can do. It's just time. And you need to let them go. So, I want you to look at your client base. I want you think, is there somebody whose just causing so much pain, and then is it possible to let them go, or would it cripple your company. I mean, sometimes that's the real deal, and if that's the deal, start figuring out how you can get out of that because you don't want any client taking more than 10% on your books. A client shouldn't be more than 10% if you can at all help it of your revenue, because you can take a 10% hit. You can't take a 50% hit. You'll sometimes stay in a bad relationship because it could be devastating to your company.


Kathryn:
      And we've been through enough and you know, there's tons of stories we didn't tell you. We've been through enough that we can tell you that when you take those hits, and when those client relationships end, and suddenly this revenue that you thought was going to be there isn't there, somehow you get through it. So there's step of faith involved, but somehow you get through it and you find other clients and you lessen the pain. And-


Michael:
      Oh and you feel so much better once it's done, you breathe. And you get up the next morning after you've slept on it and you feel so much better. And you know what you'll do once you feel better? You're going to look into the eyes of your employees and you're going to realize you just did something that helps them feel better, and you realize that they're even more loyal to you because you're protecting them also.


Kathryn:
      Heroic.


Michael:
      It's really an amazing thing. So that is it. When to fire a client.


Kathryn:
      When to fire a client. Hey, if you find this valuable, we would really appreciate it if you would like us on iTunes and share and make comments, ask questions. We just would love to have your feedback.


Michael:
      Yeah, the other thing that is important is we on a regular basis, you know, we're an agency. Half a Bubble Out is our agency, and we are here to help you. If you have a situation where you could use consulting or any kind of services to help create more of a passion or more provision in your organization, help you increase revenue, or your finances, or to help with management and organizational health. So that you and the people in your company can thrive. We're here for that. And just give us a call. Go to our website at www.halfabubbleout.com. I know you know the www. It's fun to still say sometimes. So on that note, goodbye, have a great week. Thank you for joining us again. We value your time and the fact that you're willing to come hang out with us. Thank you. It's a privilege.


Kathryn:
      All right, take care.


Michael:
      Bye-bye.


Kathryn:
      Bye-bye.