Updated: Apr 25
Listen to this episode on the podcast! >> Listen Here
Running a business is an act of faith that can definitely test your resolve when making tough decisions, especially when you think it might be time to say goodbye to a current client you have outgrown.
This article may surprise you, but I promise you, if you truly want to scale your business to the level that gives you freedom in your time, freedom in your finances, and freedom to be the very best in and for your business.. this is a message that you need to pay attention to.
Here’s the thing:
As much as we may feel like we need to be 100% vested and loyal to every client we serve, I want you to remember that you are running the show. And you have an obligation to yourself to ensure that your business works for you.
This means that every so often, it’s important to review your current client list and think about releasing the clients who you have clearly outgrown.
How do you know when it’s time to say goodbye to a client?
First of all, whether or not it’s time to say goodbye to a client depends on whether you offer services or products. Because there’s clear signs with each, that matter.
Let’s start with services.
If you have a service-based business:
As you startup, then grow, and then scale your service-based business, you should continually be upgrading the quality of the clients you serve.
Now to be clear, many of the clients that you acquire and serve along the way will grow with you! I have many many clients that I have served for years and will continue to serve because a few criteria that I will cover in a moment.
But can we all agree that in the early days of your business, you really will take whatever work you can get right? I mean, when I first started my business I was selling full branding packages for $500! (You wish you knew me then, lol =D)
But seriously though, I needed cash flow. I was in build mode, which is essentially survival mode. What I didn’t know at the time is that not all money is good money and not all clients are good clients. And the ones that pay you the least will usually demand the most.
But as you work with more and more people and your skills and results improve, you’re going to find yourself producing at higher and higher levels. And eventually, you’ll find yourself attracting the clients who want and need that higher level you, and are happy to pay the higher level fee associated with it.
The quality of your clients leads to an upgrade in revenue.
So how do you know if you have outgrown a client? These are the 4 key signs that you want to look for:
They don’t respect your time.
They minimize your value or the work you produce.
Their work doesn’t challenge you anymore.
They’re paying your old rate — and won’t pay more.
Any client who falls into these categories is someone you should possibly consider parting ways with, to allow room for the new growth that your business is very likely ready for.
If you have a product-based business:
If you have a product-based business, you may need to serve different audiences as your skills grow.
In the early days of your business, you may have created products that solved simple challenges.
But as your skills grow, your products can evolve to solving more complex challenges.
The more complex and valuable your solutions are, the more you can charge for your product. Upgrading the value of your products means upgrading the quality of the leads you will attract and in turn.. will generate an upgrade in revenue.
So how do you know if you have outgrown a client from your product-based business? These are the 4 key signs that you want to look for:
They like your product because it’s inexpensive.
They buy your product — but they don’t use it or get results.
They ask you for discounts — even though your product is reasonably priced.
They default on the payment plans they committed to.
Any client who falls into these categories is someone you may want to consider letting go.
Now let’s cover exactly how to let them go.
It’s not easy to think about saying goodbye to a client, especially one you worked hard to acquire and have served possibly years.
But I’m telling you guys, letting go is so healthy for your business.
Let me give you an example.
I have a client named Stacy who is a copywriter who got her start writing product descriptions for ecommerce businesses in the beauty industry, primarily for Etsy and Shopify businesses.
In the early days of just starting her business, she charged $50 an hour. In that one hour, she could research, draft, and polish three high-quality product descriptions.
$50 per hour for 3 descriptions = $16.66/description
By her second year in business, she was writing six product descriptions in the same amount of time. Double her original pace.
To ensure she was compensated fairly as her skills and output increased, Stacy raised her hourly rate to $100 an hour. Rightfully so!
$100 per hour for 6 descriptions = $16.66/description
She sent out a communication to her clients letting them know of the change in her compensation structure. She clarified that they would pay the exact same amount per description, but they would get their copy back in half the time.
She also shared that she had been investing in her own development and was now offering copywriting help for sales pages and email promotions as well.
Guess what happened. 95% of Stacy’s clients who she had been faithfully serving with excellence were thrilled for her. They had no problem with the new rate structure and were excited to learn more about her newly added copywriting services. Then there’s that other 5%.
One of them, a fella named Adam, nearly coughed up his medium roast coffee when he saw Stacy’s email. And he wrote her back:
“Stacy, I’m disappointed.
When we first met 18 months ago, I took a chance on you. I gave you paid work, even though you didn’t have much experience.
Now, you want to double your prices — why should I pay that?”
We’ve got 2 words for Adam. Buh,bye.
Adam doesn’t appreciate Stacy’s skills. He wants her to stay in her “beginner” box, even though her skills have obviously advanced.
Stacy realizes that Adam is no longer a good fit for her as a client. But the revenue his work brings in? That will leave a void.
Still though, Stacy knows she’s worth more.
She takes a deep breath and responds to Adam’s email.
“Adam, thanks for sharing your thoughts.
You’re right — you took a chance on me, and I will always be so grateful for that.
I will complete the current project that you have contracted me for and will invoice you for the old rate that you are used to paying. At the conclusion of this project however, I will no longer be able to work for you.
Many thanks for your trust and I wish you all the best.
Stacy’s response was simple and respectful. She acknowledged his thoughts and agreed to his point about giving her a chance. But she did NOT justify is disapproval of her increase by trying to convince him of her value. That’s important.
She knows her value. And if Adam doesn’t see it, that’s his problem.
Remember this.. your value does not decrease based upon someone’s inability to see your worth.
This is where the magic happens
Running a business is an act of faith — faith in yourself, your abilities, and your future.
When you act as your own best advocate, releasing clients who are no longer a good fit for you, something amazing happens.
Here’s how it plays out:
You muster up the courage to let your client go — and it feels terrible.
You worry and wonder about your future for hours, days, and sometimes weeks.
You meet — as if by an act of God — a much better client.
It dawns on you that if you’d never let your old client go, you would have never had the time, or possibly even the opportunity to meet and work with your new, better client.
If you’re feeling underappreciated and underpaid, look for the red flags that I have given you. Then look at your client roster. You’ll know exactly who needs to go.
It’s not easy. It’s not fun. But I promise you it is liberating.
If you think of a garden. There are perennials that grow season after season, their roots set deep and they become a foundation and focal point of your landscaping.
Then there are annuals. Annuals are beautiful in their season, but they die off after their season is over. Then the dead foliage has to be cleared out of your garden to make room for new growth in the next season.
If the annuals die but you never clear out the dead foliage, your garden will eventually be suffocated by the old from seasons past. Not only will you not have any room to plant new annuals or perennials in the new seasons, but eventually the overgrown garden can begin to suffocate the growth of the focal plants that you have spent years cultivating.
Tend to your garden.
I promise you there are so many clients available to you in this world that need what you offer. They will love your work, pay you what you’re worth, and fully appreciate everything you’ve invested into building your skills.
Make the leap and you’ll see that there’s so much opportunity waiting for you on the other side.
Pssstt.. in case you haven't heard, I am sharing brand new free downloadable tools, templates, guides and resources on my website every single week that align with my Monday night lives every Monday evening at 8:00pm EST on my Facebook business page!
If you're on my email list, my free download will get sent straight to your inbox along with some insider access to my upcoming content of the week!
You'll also get notified every time I post a new blog or podcast episode! Don't miss a thing! Get plugged in!
Cheers y'all! ~ JC