Dec 01, 2015

‘Company celebrates losing client to biggest competitor’

By Ward Pennebaker

While my headline isn’t Onion-funny, the message would resonate with the clients who’ve attended our Strategic Guardrails® branding sessions. As part of that process, I always ask people to describe their company’s “clients from heaven” and “clients from hell.” Talk about an icebreaker!

The point is not to dish on bad clients. It’s to help company leaders figure out—or sometimes just remember—who their really great clients are and what makes them great. Because sometimes in the heat of business, these fundamentals get lost. Of course, one company’s heavenly client could be another’s worst nightmare. If your strength is selling commodities, your nightmare client is one that always wants customization and personal attention. If your core strength and strategy are built on specialized products or services and lots of personal attention, you want to avoid clients who focus entirely on price and speed over quality and great service.

Inevitably, in our Guardrails sessions, a client says “we should really resign ABC Company as a client, but we just can’t.” In my role as chief agitator, I’ll say, “why not?”

‘Money, you idiot’

“Money” is the usual response. I ask them to examine the “money” answer more closely. Here are five factors that I think are often overlooked in the analysis, each of which carries a financial penalty:

  1. Distraction from heavenly clients

    Every moment you spend trying to please the client you’ll probably never please is time away from the clients you should really focus on.
  2. Unhappy staff

    If your people are your most important asset, don’t torture them. You’ve invested lots of time and money in your employees. Don’t risk losing them and the value they bring to you and your great clients.
  3. Slower progress

    Implementing and maintaining a strategic direction is difficult and time consuming. The right clients propel you. The wrong clients put the brakes on.
  4. Loss of reputation

    Great clients (like ours) run in packs. They’re nice people who tend to spread the word among the very companies you want to attract as clients. Please the wrong type of client, and they also spread the word—about how you cut your price or delivered something insanely fast, at the cost of employee morale.
  5. Stronger competitors

    Items 1-4 have the net effect of strengthening your competition. While you’re fighting a losing battle with Mr. Wrong, they’re probably scooping up Ms. Right.

Sometimes, often years after these branding sessions, I’ll hear from clients about the “clients from hell” discussion. It’s memorable for them. And it’s gratifying to hear them say: “You know, we resigned that client who was giving us so much trouble, and it was the smartest thing we ever did.

Now, for sticking around long enough to hear me gloat, you deserve more classic Onion headlines. Enjoy.

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