not everyone is ready for a new you.
by jody padar
radical pricing – by the radical cpa
a friend who owned a business services firm in the marketing industry once told me he would rather face waterboarding than resign a hard-won client. however, even he cast a big one aside after his key employee returned from a client meeting in tears. some things just can’t be tolerated. your job is to determine where the line should be and to make the decision before a bad client has the chance to negatively affect your company.
more: seven steps to determining your price | using change orders with scope | who needs to understand scope? | how to scope before you price | when to increase scope and when to let it go | determining a price … and when to change it | seventeen questions to ask when scoping | which clients should you scope? | perfecting the client needs assessment | four steps to scoping for alignment … and the #1 rule to remember | getting aligned on scope helps your team and your clients | create more meaningful kpis | here’s how profit sharing improves your firm
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a client’s fit with your firm is every bit as important as their behavior and payment practices. after you adopt a new client-centric, value-based business model, some clients won’t fit in. some will want to stick with the transactional model of the billable hour. they may not be comfortable with your new direction. some clients may not even want to pay for your smallest service bundle despite the enhanced service levels it includes.
remember, when you set yourself free from the billable hour, clients can call without incurring additional charges. conversations become more open. alignment between you and the client becomes stronger. your advice becomes more proactive. if they don’t see any value in this value-based service arrangement, they aren’t the right client for you.
i don’t mean to criticize these types of clients. they have their own business beliefs. but rather than contort your firm to accommodate their desired business practices, be prepared to let them go. you and the client will be better off in the long run. the wrong clients will leave and the right ones will replace them. you’ll have the power to vet them and make sure they’re the right fit for your firm and your business model.
once you head down the client-centric business path, you’ll have a new way to differentiate your firm from traditional, bill-by-the-hour firms as long as you don’t allow yourself to be pulled back to the past. it will have a devastating effect on your business and your staff. allow me to expand on something i’ve said before: in my prior firm, anyone on my team could fire any client for any reason.
however, it rarely if ever happened. whenever my team complained about a client, i would ask how bad it was and if they wanted to fire them. they’d usually say no and explain that it really wasn’t that bad. it’s empowering to give your team the ability to determine who they want to work with. remember, your team has to talk to these clients every day. you don’t want them to get up in the morning and not want to come to work because they don’t want to talk to a client. giving them the power to fire a client is giving them respect and helping them love their job.
some firms take the passive-aggressive approach of raising prices to chase their unwanted clients away, but i think it’s better to have the conversation that they’re not the right fit for the firm. and if you want, give them a recommendation for who could better service them.
saying no to clients is saying yes to your firm’s pricing floor, saying yes to a client standard and saying yes to maintaining your firm’s new culture of happiness.