Leadership / Management

Bad clients: Should they stay or should they go?

FiredIt's conventional wisdom among management consultants: Fire your deadbeat clients and concentrate on the real money-makers.

Sounds easy enough, but this seemingly no-nonsense approach requires a lot of strategy and soul-searching. CPA Trendlines' Rick Telberg says there are a number of signs that it might be time to drop the ax. "The ideal scenario is, of course, to avoid such situations in the first place," Telberg writes. "That’s why you need a crystal-clear profile of your target client. Then be ruthless about accepting no less."

Now, out of the blue, comes an entirely different point of view: Perhaps you don't want to fire your bad clients after all. In "Keeping Bad Apples," CFO Europe's Eila Rana says firing bad clients might actually come back to haunt your business. Why? "When a company has a mix of profitable and unprofitable customers, it makes rivals less inclined to poach its clients," writes Rana, citing a Wharton School of Business report. Understandably, not everyone agrees with this radical approach.

What do you think? Is firing a bad client good for business? What's your best advice for cutting the chord with a client who sucks the money, time and life out of your business?


Bill Sheridan