What to do when it’s time to fire a terrible client

Written by: Karl Sakas

If your agency is lucky, you’ve never worked with a client that deserves to be fired. But that’s rare. More often, an agency subjects employees to working with nightmare clients instead of firing those clients.

Why? There are a number of worries that come with firing clients. For example:

  • Your client contact might explode.
  • You might need to lay people off.
  • The client might demand a refund you can’t easily accommodate.
  • It may be difficult to replace the revenue quickly.
  • The client might badmouth your agency.

When you continue to ignore clients behaving badly, you’re sending a clear message to your team—that the revenue from one client matters more than your employees’ happiness. You’re creating an enormous employee retention risk.

Let’s look at how to decide, and then how to proceed.

Deciding to Fire a Client at Your Agency

I wouldn’t automatically jump to firing a client every time you’re unhappy with them—but keep an eye out for patterns. You can use my free Client Ranking Matrix to determine which clients to grow vs. which to fire.

The “Magic” Option: Give Them an Ultimatum

Sometimes you can use an ultimatum to get what you want without firing the client completely. For instance, one of my clients shared about dealing with a particularly difficult agency client. His client contact finally made a series of sexist comments to one of the agency’s employees. I affirmed that he was clear to fire the client—but confirmed he might ask the contact’s boss to remove the harasser from any contact with the agency.

This isn’t always an option—sometimes you just need to fire the terrible client—but an ultimatum might get you what you want, without losing the revenue.

How to Fire a Client While Practicing Warmth & Competence [Step-by-Step]

Once you’ve decided firing a client is the right solution (that is, no ultimatum first), you want it to go as smoothly as possible. Here are the step-by-step mechanics of how to do it while practicing Warmth & Competence.

Define a minimum acceptable quality level for the relationship. This sets expectations for the client, so that when it comes time to fire them, they are more likely to understand why.

Pick up the phone. Don’t fire a client via email—a call shows Warmth and is more personal than an email. Explain that you are no longer willing to provide services, and why. Explain that you’re glad to share files and access as they transition to another agency.

Consider transition time. Ideally give at least 30 days’ notice so your client isn’t left in the lurch. Check your standard contract—you want a mutual clause about how long the notice period should be.

Send a recap email reiterating what you discussed over the call. Don’t forget to include next steps. Unless the client is unethical or abusive, I recommend helping them find a new agency. At least, this includes offering a few names for them to contact.

Over the next few weeks, aim to be helpful and professional. You want to make the transition as easy as possible for your soon-to-be-former client, while holding your ground. Help in any way you can, and ask your team to continue to treat the former client professionally.

Stand firm. Once you’ve decided to fire a client for one reason or another, stick to the decision. Flip-flopping shows your team you lack courage—and that’s not good for employee retention.

Don’t forget that great employees are worth more than terrible clients. Aim to grow the ~20% of your clients that provide ~80% of your agency’s business, instead of spreading your team thin trying to accommodate difficult, time-consuming, and unpleasant clients. When it’s time to fire a client, strive to do so with Warmth & Competence.

Question: What happened the last time you fired a client at your agency?

Turn your agency headaches into profits…

Get a copy of my popular eBook, Don’t Just Make the Logo Bigger: Taking Clients from Painful to Profitable, by filling out the form below.

In addition to the free eBook, you’ll join 2,500+ agencies and get my articles delivered twice a week, directly to your inbox!