Why would a business want to fire a client/customer?

While it might seem contrary to the traditional business model, there are several instances when it might make sense for your business long term to consider firing a client. This is undoubtedly a challenging decision for any small business owner because you’ve worked so hard to cultivate a client base and build lasting relationships. However, various factors may mean the issues you have with a particular client/customer outweigh the benefits of continuing to work with them.

They aren’t bringing in significant revenue

When deciding whether to break ties with a client, consider the Pareto Principle. Named after the Italian economist Vilfredo Pareto, this theory suggests that 20% of your clients generate 80% of your income. This essentially means that 20% of your time results in 80% of your business’s results. Therefore, if clients who are not part of that 20% are taking a significant amount of your time, they may not be worth the effort you’re putting into them.

Poor communication

If a client fails to return calls or doesn’t show up at agreed-upon times, these inconveniences could be costing you time and money that could be spent with other customers. Poor communication at the onset of the relationship may also raise concerns about whether this client will pay you on time or at all.

They are rude or difficult

If clients/customers are frequently disrespecting you or employees, you may want to consider cutting them loose. When it comes to the point that you’re not profiting from the client significantly and they’re demanding more time or changes than you can reasonably provide, it no longer serves your purposes to sustain the relationship.

Don’t align with your services or values

Sometimes, a customer or client may turn out to be a poor fit for your services or brand. For example, if you’re a graphic design firm but the client is seeking a marketing campaign, your services can’t provide exactly what they need. In this case, it doesn’t serve you or them to continue working together, and it’s best for your business to let them know this in a respectful manner to avoid wasting anyone’s time.

They disrespect your policies or payment procedures

Unfortunately, some clients may attempt to take more than your business can reasonably give in an attempt to benefit themselves. This may occur in the form of evading payment, making late payments or using discounts and minimums and failing to make additional orders. When you’re providing services or products and get nothing back in return, you’re losing money and time that could be spent elsewhere. It’s time to break up with these clients and invest in others who give your business the respect it deserves.

How to fire a client professionally

Though it’s a rare occurrence, there may come a time when one of these situations is true for you and a particular client your business is dealing with. Rather than suffer through, it’s critical to take charge and break things off with the client before your workplace morale or profit is damaged. In doing so, you need to be tactful to protect your company’s reputation and avoid any hard feelings. Here are a few tips on how to go about this.

Offer an explanation

It’s important that no matter how a client has behaved toward your company or staff, you don’t simply terminate the relationship with no valid explanation. You never know whether your paths will cross again down the line, so maintain a professional persona and lay out the facts about why the relationship is no longer working. Be sure to inform the client about why you’re not the right fit to meet their needs and suggest alternative solutions.

Take the blame

Even though the reason for your split from the client may have nothing to do with you and everything to do with their behavior, it’s best to shift the blame onto yourself in a professional way to avoid hard feelings or a damaged reputation. If you tell the client their actions are the problem, they’re likely to get defensive and the situation may become confrontational. Instead, simply frame the problem as being that your current abilities don’t allow you to meet their demands, whether the issue is the type of services you offer, the time they’re requiring you to dedicate to the project or that their budget simply doesn’t work for you.

Manage expectations for the next steps

Be clear on what the next steps look like for this client and your business. Are you terminating the relationship effective immediately? Or are you willing to finish a current project or fill a last existing order? Lay out how you’ll proceed and what the client can expect from you during the time between your discussion and your parting ways. Establish payment procedures to ensure you receive compensation for any further work, or follow up on current outstanding payments.

Be the one to apologize

Though it’s likely not your fault the relationship hasn’t worked out, it’s best for a business to take the high road and apologize for terminating your agreement. Be genuine and sincere, and thank them for trusting in your business up to this point. Wish them the best in the future and part on good terms.

Stay calm

While it might be challenging, especially if the client doesn’t react the way you’d hoped, it’s critical to maintain a calm, professional tone throughout the conversation.

Resources for firing a client

If it comes time for you to fire a client/customer that you’ve been working with, having a template to work from can help you figure out where to start. Take a look at these three examples of how to write an ending business relationship letter or email. Having the termination of your working relationship in writing can be useful if the client disputes your position down the road. Be sure to preface the letter or email with a face-to-face conversation out of courtesy and to practice the professional tactics mentioned above.

Template 1: Taking the blame

[Client Name]

While I have thoroughly enjoyed our working relationship, I am no longer able to provide you with [the products or services your business delivers] commencing [date] due to personal reasons.

[you can choose to elaborate on the “personal reason” here if you wish to]

I am happy to provide [a reference or referral] to another [provider] to minimize the inconvenience to you.

Thank you for your support and understanding as we begin the transition process. Below is an itemized list of what you can expect from [your business name] moving forward:

[item 1]

[item 2]

Template 2: Short and sweet

[Client Name]

Recently, issues in our working relationship have come to my attention. In the interest of ensuring your [project or services] receives the priority it deserves, I recommend seeking another [business type] that better aligns with your values and needs.

Effective [date], [your company name] will no longer be able to assist you.

Thank you for your business and understanding. Below is an itemized list of what you can expect from [your business name] moving forward:

[item 1]

[item 2]

Template 3: Changing direction (easy letdown)

[Client Name]

We are making internal changes that allow us to focus on a select client group for whom we feel our services are the best fit. As a result, our team will no longer be working on your [account or project] as of [date].

Thank you for your business and support over the last [duration of your working relationship]. Please feel free to reach out with your questions and concerns regarding our policy changes.

[Here you can recommend competitors for them to seek alternative services from or mention your willingness to provide a referral if that’s relevant to your industry]

Below is an itemized list of what you can expect from [your business name] moving forward:

[item 1]

[item 2]

The Final Word

After delivering your termination notice via email or written letter, you’re likely to receive a response of some kind, and it may not be a positive one. If the reply from the client/customer is emotional or aggressive, remain professional and stand your ground. Appropriate responses could include:

• Thank you for your feedback, but our decision is final. We wish you all the best in your future endeavors.
• I understand your concern and apologize for the inconvenience. As previously mentioned, here is a list of the steps we will take to ensure your transition to a new [provider] is as seamless as possible.
• Thank you for your feedback. If there is anything else we can do to make the transition easier for you, please let us know and we will do our best to accommodate your requests.

Be gracious and polite throughout your conversations, and strive to have a face-to-face conversation before handing over the formal written notice if possible as a courtesy to your client.

Firing a Client Template for PDF & Word

Firing a client is undoubtedly challenging, but these templates can help make the process as smooth as possible.

*Indeed provides these examples as a courtesy to users of this site. Please note that we are not your HR or legal adviser, and none of these documents reflect current labor or employment regulations.