Jim's Marketing Blog

Marketing ideas to help you grow your business

Ever thought about firing 75% of your clients?

What would happen if you fired your worst clients and invested all that extra time, delivering excellence to your most valuable clients?

I was thinking about this after recalling a chat I had, with the owner of an extremely successful accountancy business. We were both guests on a local BBC radio show and after the show, we went for a coffee. I asked her to tell me about her business and she told me about a key decision she made.

This decision was the starting point, which transformed her business from one that competed based on fees, to being ‘the’ premium provider in her area.

Firing 75% of her clients was the start of something big

She explained how after competing for a new client and losing out because of a difference of just £50, she told herself that enough was enough. She no longer wanted to serve the fee-sensitive end of the marketplace – they were the most demanding and paid the least. So, she decided to fire the 75% of her clients, who were generating just 25% of her fees. This gave her the time to deliver service excellence to the highly profitable 25%. That exceptional level of service got people talking. It saw her attract more word of mouth referrals from other highly profitable clients.

She never needed to compete for clients based on fees again.

Making the switch

Firing 75% of your clients probably isn’t the answer for you. It may be that you have just one or two clients, who undervalue your time and make you unhappy. What I can tell you for certain, as someone who works on this all the time with small business owners who are tired of being undervalued – is that you will always know which clients to fire.

I’ve seen what it does to small business owners, when they set their fees so low that they have to work too many hours, to reach their income requirement. I have also seen the stress caused, when business owners find themselves with a client base that undervalues them. No one deserves that.

  • Increase your market value by offering excellence: Not great customer service. Excellence.
  • Deliver excellence to your remaining clients and you will become remarkable.
  • Remark-able = worthy of remarking = word of mouth.

It takes courage and the right strategy, to go from competing for business based on fees, to selling a premium service to people who truly value your time. That’s why so few business owners do it. They have not yet figured out that the riskiest thing they can do as we go into 2013, is to follow the flock.

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Jim Connolly

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16 Comments

  1. This is so true Jim.

    I increased my fees by 200 percent in 2002 and saw an increase in revenues a year later of 700 percent.

    It works people. It works.

    • Hi Holly. I have seen similar examples many times. It works, so long as people are getting enough value to make the fee seem irresistible.

      Thanks for the feedback.

  2. I’ve never fired clients though it’s a thought provoking idea. I think it’s just as important to turn down work where you feel potential clients won’t value you or the fit isn’t right. It can be so tempting to take work on because it’s offered but that is not, necessarily, the best route to take.

    • Hi Debbie. You’re right, once the lower value clients are gone it’s nuts to replace them with equally poorly suited replacements.

      Thanks for the feedback, my friend.

  3. Hi Jim,

    Thank you for sharing your thoughts. I love this topic and the thoughts that go with it.

    People always assume that lower value clients do not have the money and you would lose them. The reality is many of them do have the money and they do not realize the value you provide.

    I have always treated working with a client as a partnership.

    I also want to work with like minded clients. I have learned over the years to make a partnership work sharing the same goals, background and business values make the difference.

    I was in a situation 3 months ago where I had a client that was a lawyer. I fired my client and told him that he needed to find support and assistance from another individual/company. At the time my then client even offered to pay more. I said I am sorry i is just not worth it.

    The reality is the stress of working with this client would not have been worth it regardless of the amount of money paid. The client would have caused more issues in the long run.

    • Hi there Rob. You make a good point. It’s important to know who you work best with and the type of projects you want to attract. Otherwise, it’s all too easy to have a poorly targeted client base. Thanks for sharing your experience, sir.

  4. This is a thought provoking idea. Thanks for the interesting post. We provide a service that is contingency based, so our success is the client’s success, I still think that any company that delivers extraordinary service, is bound to succeed if there is consistency. Looking at the service part of our business and determining what we need to do even better, is an excellent goal!

    • Hi Mary and welcome to the blog.

      It’s all in that phrase you used: extraordinary service. When we go beyond ordinary, so do our results. Thanks for the feedback.

  5. Hi Jim
    I work in freelance translation, and this idea applies to this market sector more than any other I can think of. I heard of one freelancer who rejected 95% all agencies he ever spoke to (regardless of who initiated the contact), as he had his fee scale for what he knew was an excellent service, and most agencies will try and pay a pittance. We are, after all living in an age of Google Translate, and many end clients simply assume that to translate a 200 page report, you feed in the text, and Google Translate does the rest! Many agencies pay freelancers accordingly. :-( To make the leap between the plodder who is at his desk 24/7 for peanuts, and the high fliers who earn £50K p.a. and speak at international conferences as guest speakers, earn royalties off books etc. requires dedication, the ability to provide a fantastic service that only you can provide, and knowledge of your subject matter inside out (and that’s just for starters). So how do you do it? I’m at the stage where I’m building up my client base. At the moment I have a mixture of clients, from one who pays top-drawer rates but only has an occasional contract, to a more steady client, who pays less good rates, to one who pays “sub-prime” rates, but who fortunately does not bother me all that often. I could not afford to get rid of any of them at the moment however. I am working towards full membership of the professional association, which in turn gives you more exposure to potential clients, getting my own website developed, and undertaking lots of CPD to up my game in terms of the service I can provide. Once I get more clients, then yes, I would definitely agree with you, but at the moment, I cannot afford to be choosy. What I need to do at the moment is to use the glowing references I have from existing clients to get more work, and once the steady flow of work is coming in, THEN I can fire a few – especially the one that pays “sub-prime” rates!

  6. Jim,
    No matter how many times someone tells me to do this, it still cares the “you know what” out of me. I think it has some inherent issues that go beyond just fear of revenue loss. There are personal issues about money at play for many people. I have that one, but then the other one is worse. If charge even more money, they will own me even more. Of course the truth is I already give one thousand percent of myself for way less money. At least I would have LESS PEOPLE owning me.
    Thanks for the article. I will give it a try this time.

  7. I completely agree Jim! Although firing clients who actually pay on time can be scary since it can take several weeks or months to replace a retainer client, we have implemented a new strategy. From the first meeting with any new potential client, I position our company as only wanting to work with business executives who are looking to grow, differentiate or have innovative ideas to increase revenues. This has been tremendously successful to not only excite those business conversations into a more strategic partnership purpose, but it also changes the power dynamics back to our control. Meaning, executives who are invested will begin to sell me on their vision and I merely align our services with how we can exceed their goals. Our relationships are stronger, more loyal and our company is energized to truly feel as if we are making a difference in the lives of our clients!

    • You make a great point about control, April.

      It’s too easy to allow noisy, yet low value clients dictate our working week and how we FEEL when we work.

  8. It’s funny but true – the people who spend less often expect the most; this may be because they are stretching their budgets so feel the need for the additional value – however, what it demonstrates is that their main criteria for choosing your product is pricing – not a very good sign if you feel you are offering good service or want to compete on it.

    The 80-20 Rule; One of the main resources that many of us ignore, or tend to undervalue, is time; We often believe that we can do everything, but rarely take time to step back and say, hey, if I focus on a few activities, I can perfect those activities and have a more personalized and professional service, and have customers who value what I offer, and are willing to pay more.

    One way to implement this type of change is to start gradually and see the response of customers and potential clients; It’s not like the remaining 20% (of your profitable customers) will suddenly be willing to pay much more for your solution :)

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