How to Simply Let Go of a Client Who is No Longer a Good Fit

January 27, 2023

When running a business, saying goodbye to customers you've outgrown can be tough.

After all, customers are the lifeblood of any company, right?

Well, not exactly. The right customers can be a source of explosive growth for any company, whereas the wrong ones can hold you back.  

Just like any other relationship, some customers are meant to be forever, while others are best left in the rearview mirror. But how do you know which ones to keep and which to let go of?

Let's dive into the world of saying farewell with a smile.

Letting Go of Customers as Your Business Grows

As a business evolves, it can often outgrow its first customers.

It's natural to feel a sense of loyalty to those who helped get you started, but to ensure the continued success of your business; it's essential to focus on working with the customers you can serve best.

This can be difficult, but it's okay to say goodbye to customers who are no longer a good fit.

Several factors can contribute to a business outgrowing its first customers. For example, as the business grows, it may start to offer new products or services that the original customers aren't interested in. Alternatively, the customer's needs and priorities may change, making it difficult for the business to continue serving them effectively.

In either case, it's important to acknowledge the situation and make a change.

Continuing to work with customers who are no longer a good fit can lead to decreased profitability and decreased satisfaction for both the business and the customer.

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How to Identify the Customers You Need to Shed

Identifying the customers a small business should disengage from can be a difficult but necessary step in the growth process.

The process requires a combination of financial analysis and gut instincts.

Start first by identifying the customers you would hate to lose. Do they fall into a particular niche, or can they be categorized as a group in some format? What do you enjoy about the work that you do with them?

Once you've identified the customers you love working with, it becomes clearer where your time should be spent.

By further analyzing the financial data of your business, you can determine which customers are draining your resources and not providing a sufficient return on investment.

This information should be coupled with an assessment of the emotional and time-related costs of working with these customers and the impact they have on your ability to serve other customers effectively.

It's important to remember that not all customers are created equal, and it's okay to say goodbye to those who are no longer a good fit for your business.

By being strategic about which customers to disengage from, you can free up resources and focus on sustainably growing your business.

A Financial Coach can help you understand which customers to cull, as they can help you analyze your financial data and identify trends. This information can give you valuable perspective on which customers are driving the most growth and which may be holding you back.

What to Say When Disengaging

Disengaging clients who are no longer a fit for your company can be tricky. It's important to remember that both parties will benefit from this change in the long run.

So, how do you approach this sensitive situation with empathy and professionalism? Here are three key pieces of advice:

Be Honest

Honesty is the best policy when it comes to disengaging with a client.

Explain why the relationship is no longer working and what your company's needs are moving forward. This will show the client that you respect them and their time and that you're committed to finding a solution that benefits both parties.

Offer Alternatives

If possible, offer the client alternative options that may better suit their needs.

This could be referring them to a competitor or offering to work with them on a different project that is a better fit for both parties.

By offering alternatives, you're showing that you're still invested in their success and that you're not just walking away from the relationship.

Be Gracious

Finally, be gracious in your goodbye.

Thank the client for their time and the opportunity to work with them. Offer to stay in touch and, if you're open to continuing tow work with them for some time, help with any transitionary needs.

This will leave the door open for potential future collaboration and ensure that the client leaves the relationship feeling valued and respected.

Remember, disengaging with a client can be necessary for the growth and success of your business. By approaching the situation with empathy, honesty, and professionalism, you can maintain the client's trust and respect and ensure a smooth transition for both parties.

Saying Goodbye is Never Easy

It can be challenging to say goodbye to customers, especially if you have a long-standing relationship.

Disengaging from customers who are no longer a good fit for the services you offer and the business you're building ensures that you can continue to serve others well, ultimately allowing your business to grow and thrive.

Chances are, another small business would love to serve the customers you need to let go of. You're keeping their best interests in mind by providing them an opportunity to meet with another service provider!

Working with a Financial Coach can also help you navigate this process.

A team well-trained in accounting or bookkeeping can provide you with guidance and support as you make tough decisions, and they can help you understand the financial implications of your choices.

Whether you're looking to cull a few customers or completely revamp your customer base, an outside perspective can help you achieve your goals.

Outgrowing your first customers is a natural part of the evolution of a business.

By focusing on the customers you can serve best and working with a Financial Coach, you can ensure that your business continues to thrive and succeed.

Remember, it's okay to say goodbye to customers who are no longer a good fit, as this decision can lead to increased profitability and satisfaction for your business and your remaining customers.

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Jeremy Millar
Written by:
Jeremy Millar

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