4 legitimate reasons to fire a toxic client

Young Entrepreneur Council
Group of business colleagues working in a boardroom meeting.

A healthy business partnership is a successful business partnership

Business ventures are a give-and-take experience. Having a healthy relationship with your clients is necessary for your business to succeed. There’s the key word: “healthy.” Both you and your client have to establish a healthy relationship on both sides.

Obviously, you and your client have separate goals, but the end result you want is to benefit both parties. Yet we’ve all been taught that the client is always right. But if the relationship becomes toxic and the customer becomes highly unprofitable, it is wise to walk away from the relationship and let them choose a new vendor.

Let’s take a look at some examples of red-flag behaviours that could signal a potentially toxic client:

Psycho Dialer (or Emailer)

An overly communicative client is someone who contacts you way too much. Communication is key for a healthy relationship. However, just like a romantic relationship, you need your own space and time.

If they are calling late at night and sending too many emails, texts or voicemails that could be handled during business hours — these are all bad signs. If it’s a red flag in a relationship, it’s a red flag in business.

Clients should recognise that you have other clients who you need to be spending time on. Prioritising one client sets you up to let them down later when you can’t afford to pay as much attention to them. This can happen for many reasons, from an increase in business to the realisation that you’ve given too much to this client and are now stuck.

Unrealistic Time Expectations

They say time is money. Not everyone wants to pay for all that time consistently, though. If this comes up with a client you recently started working with, it can be a cause for concern. In this day and age of free music and free news, people often have unfair expectations of free (or very cheap) services.

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They wouldn’t want this turned back upon them if they owned a business, though, and this is your company. You need to be firm and clearly express how much time you can spend on a specific project and what that will cost. This leads directly into the next point.

Expectations of Freebies

Clients reach out to you for services you can provide that they can’t do on their own. Because of this, they should respect that fact and not constantly try to get lower prices or “deals” for your services. Naturally, you can and should help them out slightly if there are reasonable circumstances, but if you give in too much, you risk damaging your brand. If this issue keeps coming up, it might be better to part ways with the client.

We recently had a legal transcription client who asked for a lower rate than what we had quoted, and when we hesitated slightly, he spotted an opening. He refused to commit until he had received a free trial. We acquiesced, even though his needs were low volume and the free trial we use is typically for high-volume, long-term clients.

Within three months, he was back on the phone, trying to get another discount. At this point, we suggested he move to another firm with lower prices. It had become clear that price and not quality was a priority to him, so it was not worth our time. At his rates and volume, our profit margin was too narrow and our business interests did not match up.

That’s not to say, however, that you shouldn’t make small concessions or be lenient with your time or pricing when it comes to clients you have an established relationship with. After all, you never want to do anything that could jeopardise your important relationships.

Overly Aggressive Demands

Whether it’s a client you recently started working with or one you have collaborated with for some time, never let business matters be conducted in an aggressive tone.

A (former) medical transcription client called so much that our office personnel began to noticeably lose productivity. Not only that, they were also so rude that our office staff started to avoid answering their calls. The situation became so bad that after internal discussions, we set up a spreadsheet to track the calls.

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Three months and many nasty calls later, the client was sent the spreadsheet documenting their calls and issues, our response, and a request for them to find a new transcription company. We were finally free of their toxicity when they found a new company to work with.

It’s key to remember that not every client is valuable. There are some that you can not only live without, but would be better off doing so. If you find yourself frequently thinking negatively about a client, it might be time to reconsider your relationship with them.

Candice Galek said it well in her recent article on Inc: “Every customer isn’t valuable — there are some that we can certainly live without. Like the customers who are headaches for your company, for example. The ones who won’t lead to any more referrals or sales, and who give your staff trouble time and again.”

Remember that you can always find new clients. You can’t, however, recover wasted time or image trying to satisfy a client who will never be satisfied. You deserve the respect and the satisfaction of fair compensation for all your hard work, and you should be confident your prices are already very fair.

A version of this article originally appeared here

Ben Walker is the CEO for Transcription Outsourcing, LLC and has made contributions to Entrepreneur Magazine, The Associated Press, & Inc.

The Young Entrepreneur Council (YEC) is an invite-only organisation comprising the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship programme that helps millions of entrepreneurs start and grow businesses.

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