Year End is Coming, so It's "Client Abandoning" Time Again

by Tom "Bald Dog" Varjan, Organisational Provocateur

Or let’s remember swinging on the monkey-bar at the playground a few years ago. In order to progress, we must let go.
When we started our businesses, we were not as picky about the quality of clients we were getting as we are now. We loved getting business and were eager to do those projects. The problem with that was that we got flooded with low margin-business that put food on the table and fuel in the car, but neither stretched us to grow nor gave us the size of margins that would make us feel appreciated.

A world-wide survey conducted by former Harvard Business School professor David Maister has shown that most professional service firms and service professionals merely tolerate some 70 percent of their clients and 65 percent of the projects they are engaged in.

Many business gurus are talking about that we should love what we do, but don’t mention much about loving our clients. We should engage only in exciting, “sexy” projects with clients we truly care about. The relationship is similar to a marriage apart from sex and kisses. The above survey proves that many professionals operate merely as whores: “I don’t like you and your project, but I pretend as long as you pay me.” On the opposite end of the scale are most fitness professionals who work for peanuts, but truly love both their works and their clients.

To make sure that we do projects that make us stretch and learn with clients we really care about, we have to look at our clients regularly and make pragmatic assessments as whether or not we want to keep them any longer.

One of the greatest advantages of being a provider of professional services is that we can grow on each and every project we do. So let’s use this as a basis.

We all are likely to have some clients who could be better served by someone else, but while being served by us, we are holding ourselves back from some serious growth. The other issue is that we constantly want to increase our margins. Some businesses come with low margin.

Some clients give us headaches and stomach ulcers, instead of prompt payments. At the beginning when we started out, we all accepted clients from all walks of life. But after a while these clients have filled up our lives, and have kept us busy. They kept you busy but not productive. They may have expected you to take on more and more responsibilities in the project without talking about fee increases.

These are some of the typical reasons for giving up business dead industries or businesses it is below our fee structure boring gives us the wrong reputation cannot give us recommendations (well, we deserve free marketing for our great work, do we not?) we want So, you should make it a practice of abandoning the bottom 10-15% of your clients every 1.5-2 years. There are three types of business you are likely to perform:

There are three types of business we are likely to perform:

Business that is somewhat incongruent with our growth strategy, but it is steady and we want to keep it because it can turn into something better. This puts food on the table. These clients can be educated about our evolution, so they can evolve with us.
Business that is congruent with our growth strategy and propels us to new heights. This is the kind of business we want more of.
Business that represents our past, and we try to break free from it. So this is the very segment to be abandoned. This segment can hold us back from out own development.

So look at each of your clients and ask these questions of yourself:

Am I truly caring about this client?
Am I totally enjoying this project and having lots of fun?
Am I really learning from this client’s projects?
Am I providing an “incredible bargain” for this client?
Am I making an “incredible margin” on this client’s projects?
Am I stretched beyond my current professional abilities?
Am I introducing new desired value-added to this client?
Am I getting good referrals and recommendations from this client?

I admit this concept works best if you apply it with value-based fees (true consulting). People who use time-based fees (very often as outsourced labourers) may have a hard time to abandon business for their objective is selling chunks of time.

Make sure you keep only those clients who are willing to go for “incredible Deal”. It means two things:

1) Client: In terms of results, it has been an “incredible bargain” to hire this dude/dudette.

2) Consultant: That was a nice project. We produced amazing results, I learnt a lot and made an “incredible margin”. Take some time now and assess your clients. Do you truly care about them, do you just tolerate them or do you wish they would die rather sooner or later?

Take a sheet of paper and lay it down landscape. Create five columns. From left to right name them as: “Best Clients”, “Characteristics of Best Clients” “Ideal Client Profile”, “Characteristics of Worst Clients”, “Worst Clients”. Only write in existing clients.

First fill in your best clients, then the worst clients, characteristics of the best, characteristics of the worst and then develop the characteristics of your ideal clients. Test your current accounts, and decide who gets the chop this year.

Copyright Tom "Bald Dog" Varjan. All rights reserved. You are free to use this article in whole or in part. One favour though: Can I ask you to you include complete attribution, including a live website link. Also, can you please let me know where you plan to publish the article.

The attribution: This article was written by Organisational Provocateur, Tom "Bald Dog" Varjan of Dynamic Innovations Squad, a firm specialising in helping consulting firms to sell their expertise at the highest margins. Get Tom's free Practice Management Black Paper when you sign up for his monthly newsletter, Commando Consulting: Lessons And Practices From The Ultimate Professional Service Firm, The Military. Visit Tom's website at http://www.di-squad.com.

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