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Updated Oct 24, 2023

Should You Ditch That Nightmare Client?

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Nicole Fallon, Business Ownership Insider and Senior Analyst

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Most service-based businesses have encountered a nightmare client at some point. This person makes outrageous demands of your team and expects them to be met immediately. They don’t respect the due date on the invoice and refuse to pay you on time. And when it comes to communication, this client either pesters you 24/7 or can’t be reached at all.

The old cliche may say the customer is always right, but some problematic clients may not be worth your time. Although you may be hesitant to drop (or “fire”) a client, the temporary loss of income could be in your business’s best interest in the long run.

Here’s a look at what to do when faced with a challenging client, when to know it’s time to part ways, and how to extricate yourself politely and professionally.

Key TakeawayKey takeaway
If you have a consumer-focused business, some strategies for dealing with difficult customers are simply listening, empathizing, lowering your voice and staying calm.

How to resolve conflicts with clients diplomatically

If you’re fed up with a client, it may be tempting to let them go immediately. However, while some clients may be annoying, you may not want to give up on the relationship so fast. Here are a few tips for working things out with your client.

1. Figure out what the problem is with your nightmare client.

Step back from the situation and figure out what the issue truly is with your problematic client. Are they really unbearable to work with or negatively impacting your company’s bottom line? Or is there just something about their personality that rubs you the wrong way?

If the problem comes down to clashing personalities, there may be other arrangements to make. Perhaps another team member could take over the lead role with that client – or maybe you can resolve to tolerate and deal with the individual until their contract runs out.

2. Set boundaries with your difficult client.

It’s always a good idea to reassess your client boundaries regularly. For instance, if you have a client who calls you at all hours of the day and night, you may need to reiterate when you’re willing to take calls and when you aren’t. As another example, if you have a client who regularly asks for revisions or tasks beyond the scope of your agreement, it may be helpful to review the terms of your initial contract.

Firmly but politely restating your boundaries may be enough to salvage the working relationship. If the client refuses to respect your boundaries, this can be a clear sign that it’s time to end the working relationship.

If you need help fielding client calls, consider using a call center or answering service. We'll help you find the right one with our comparison of the best call centers and answering services for businesses.

3. Communicate openly with your client.

Your clients can’t read your mind; they won’t know if something they’re doing is bothering you unless you tell them. You’re not doing yourself or them a favor by pretending that everything is fine when it isn’t.

If something is bothering you about your working relationship, you owe it to your client to be honest about it. This is especially true if it’s a long-term client; in this case, you probably want to do everything you can to repair the relationship.

To improve communication with clients, respond to complaints immediately, implement a two-way communication channel, and monitor social media platforms to find out what others are saying about your business.

How to know when it’s time to drop a client

If attempts to improve the working relationship have failed, it’s time to consider parting ways.

“For a [business] relationship to have long-term success, both parties have to be in a position to do their very best possible work,” said Matt Dopkiss, chief innovation officer at WillowTree. “If the frictions overpower the momentum, the relationship will grind to a halt. You usually know it far in advance, but you’re reluctant to admit it. You rationalize, you put in extra effort, you try to stay optimistic – but once the chemistry is gone, it’s over.”

Dropping a client isn’t a decision to be made lightly or hastily; you should end a business relationship with a paying customer only if it’s actively hurting your company. If you’re heading down this path, ask yourself the following questions to decide whether to stop working with a difficult client.

Does the client continually expect more from us but won’t raise their budget?

Small businesses typically operate on a lean budget. If a client keeps asking for more but refuses to pay a higher price for your services, you’ll end up stretching yourself too thin to justify keeping the client, according to Geoff McQueen, CEO of professional services automation software Accelo.

Does the client regularly miss or reschedule calls and meetings?

Communication breakdowns are a clear warning sign of a failing relationship, Dopkiss warned. No one wants to have their time wasted, so watch out for a pattern of phone tag and last-minute cancellations.

Do we have to follow up with the client repeatedly to get paid?

Because you’re providing a service and not a point-of-sale physical product, some clients may get the idea that it’s OK not to pay you right away. One late payment is forgivable, but clients who continually miss payment due dates limit your ability to pay your team and grow your business, McQueen said.

Key TakeawayKey takeaway
The right bookkeeping software makes it easier to send and keep track of overdue invoices. Check out our reviews of the best accounting software for small businesses to find the right solution.

Is the client stalling on a project or not giving feedback?

Dopkiss noted that some clients will seem positive about your business relationship on the surface but then put a project on hold indefinitely or stop responding. These shady situations aren’t good for either party, as the client doesn’t get the services they need, and your company doesn’t get paid.

Has the client stopped taking our advice?

Professional disagreements are a normal and natural part of the business process, and a client may not be thrilled with the strategy your company suggested. But you don’t want clients who fight you at every turn even though they hired you to help them.

“You’re going to get the blame if things don’t work, regardless [of the circumstances],” McQueen said. “If they’re not listening to you, you’ll end up in a bad situation no matter what.”

How to drop a client

If you answered yes to the above questions, you might want to start thinking about how to tactfully separate yourself from your client. However, proceed with caution.

Here are some tips for how you can drop a client without hurting your business’s reputation.

1. Get difficult clients to leave you first.

David Silverstein, founder and CEO of Amaze PBC, said that “firing” clients is rarely good for a business’s culture and reputation. Instead of outright dropping them, he recommends attempting to let them drop themselves.

“Service businesses need to take care of everyone, and they need to learn to turn unhappy or unsatisfied clients into happy ones,” Silverstein told us. “So devise a strategy that causes bad clients to ‘opt out,’ as opposed to dropping them. The best way to create an opt-out strategy is to raise your price.”

2. Have an open and honest conversation with your client.

Sometimes, the client won’t elect to leave after a price hike, or perhaps you’d rather not raise your prices. Before you officially show them the door, it’s crucial to have an open, honest dialogue to try to salvage the relationship.

McQueen advised approaching the subject like any conflict-based negotiation: Be frank about the problems and issues your company is having, and explain why your current arrangement isn’t acceptable. If the client is willing, try to work things out. [Related: Negotiating Tips to Sharpen Your Skills]

“Explain the problem, propose an amicable parting, and offer to aid the client in the transition,” Dopkiss added. “Sometimes, they’ll accept your offer. Other times, the client might just surprise you by recommitting to the relationship.”

3. Keep the situation professional.

If you end up parting ways, be sure to remain polite and professional about it.

“It’s important to be respectful, honest and compassionate in any sort of breakup,” Dopkiss said. “Without expectation, aid the client to as smooth and seamless a transition as you can manage. Be a good partner to them through the end.”

Jamie Johnson contributed to the writing and research in this article. Source interviews were conducted for a previous version of this article.

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Nicole Fallon, Business Ownership Insider and Senior Analyst
Nicole Fallon is a small business owner with nearly a decade of experience overseeing day-to-day business operations. She and her co-founder self-funded their company and now lead a team of employees across multiple disciplines. Fallon's first-hand experience as an entrepreneur running a staffed business has given her unique insight into startup culture, budgeting, employer-employee relationships, sales and marketing, and project management. Fallon's business expertise is evident in her work with the U.S. Chamber of Commerce, where she analyzes small business trends. Her writing has been published in Forbes, Entrepreneur, and Newsweek, and she enjoys collaborating with B2B and SaaS companies.
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