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When to fire a client

Luxury Academy Newsletter12:36

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A genuinely problematic client doesn't just generate extra work. They actually alter the behavior across the business. >> Yeah. >> So staff start to... you can see it. They start to hesitate over decisions that used to be straightforward, or language gets softened for, for absolutely no good reason. And then you start to see people looking for reassurance when, where no reassurance should have been needed in the first place. >> Right? >> So you see the organization reorganizing itself around avoiding a reaction rather than delivering quality. >> Right? It's like a toxic relationship, isn't it? Really? >> It is like a toxic relation. Well, it is a toxic rel. It's not like when it is one. It is absolutely. Yeah. Because it, it also will often, it'll often get described as internally as though it's being careful. >> Yes. Because that sounds sensible, doesn't it? It sounds sensible to say that you care for something. I mean, it sounds responsible. >> But the thing is, once that care turns into fear management, 'cause that's what this is. >> Absolutely. Yep. >> The business is already paying a price >> and that price shows up in things like slower decisions or poor judgment and >> a general erase, erasure of and flattening of confidence that then people start to struggle to explain, >> right? And the client often still looks reasonable on paper, right? The, you know, the numbers work and they're polite to the owner or to the senior people, >> right? Well, this is it. And that's why these situations last so long >> because >> you can't assess these clients by how they treat you as the business owner or you as the senior manager or you as the general manager, whatever. >> You, you have to watch how they treat the people that they don't need. It's like the waiter test, isn't it? >> Yes. When you're on a date. Yeah. Absolutely. >> Yeah. Exactly. You know, how do they, how do they treat the waiter? How do they treat assistants or drivers or junior staff or anyone they see as not important? And I think that's where the, the negative patterns start to show themselves much more clearly. >> Yeah, absolutely. And because of that, that the staff will usually notice that long, a long, long time before any kind of leadership person will. Right. 100% they'll notice it immediately. >> And I think once they see that, that behavior is being tolerated by you because >> the client is profitable, they, they start to draw conclusions very quickly about what actually matters in the company, right? Not what's written in the policies or what's said in the town halls about valuing people and our staff being the most important asset and all the rest of it. Because what's rewarded in practice is you're allowing this particular client to be a dick, >> right? >> And act like a dick. >> This is where smaller businesses often will push back and say they can't afford to lose the revenue or whatever it might be. >> But that's understandable%. Yeah. >> When you're a small company, you can't. But >> that's often backwards because by the time someone is, is asking this question, "Should we get rid of this particular client?" or "Should we stop working with this client?" they're already losing money? >> Maybe not just in the way that's easy to see in terms of, you know, bottom line revenue, but time and attention are being poured into keeping one volatile relationship stable. And that time is then being taken away from clients who would >> who you'd be able to grow in revenue and who would be quite happy to grow with you if they were given even a fraction of that energy and attention. That's the thing >> that, that thing of um, those clients... they don't usually really complain, the good those ones that you can >> they, they'll just fade away, won't they? They won't, they'll just stop engaging. You won't see them anymore. >> No, they just become silent. We've talked about this before, that silence is so dangerous and so brutal, and the problem is that you only realize later. >> Companies only realize later when the >> pipeline is, is thinner and there's nothing in the pipeline, and by then salespeople start to blame the market or timing or whatever, rather than noticing that the business has been orbiting the wrong person. >> Right? So when someone recognizes all of this and then decides they should end the relationship, that's usually though when, when that panic will kick in, isn't it? >> Right? Because people imagine confrontation >> or they imagine retaliation or they imagine legal threats or some sort of public drama. >> And I think we've all fallen into this trap. >> Yeah. Where we're, we know a client shouldn't be a client, but we're terrified >> to say, "We don't want to work with you anymore because you're a dick." >> But the thing is, most of all of this confrontation and retaliation happens because >> you invite it, >> right? The, the, the, the biggest mistake that, that people make is thinking that they should end a relationship by explaining what the client has done wrong, you know, overexplaining themselves. >> Well, that then just turns it into a dispute. >> That's Yeah, >> exactly. And the thing is, with these kind of clients, >> disputes are where that's their comfort zone. >> I mean, they love them. That's like an energy thing, is it? Like vampire. Oh, feed me. Feed me. Right? >> and they'll keep you engaged in this feud until you're totally exhausted. And I think the, what you should be doing is unglamorous, but it is effective. You don't end the relationship on behavior. >> You end it on fit, >> right? But people struggle with that, don't they? Because it feels evasive. They feel like they're lying. Whereas >> But it only feels evasive, Helen, because people think they owe people an explanation. Is >> they don't. We have this human nature where we believe that because we've made a decision, we have to explain that decision step by step by step to the other person. You don't, you don't have to give them an explanation. You don't owe them an explanation. You say that you've reviewed the relationship and you've concluded that you—not they—you are no longer the right partner to deliver what they want, whether it's service or product or, or whatever. And you, you, you say it once and you stop. I do it all the time. >> Well, I, this is what I help my clients with in personal relationships, let alone business ones. You just don't give examples. You don't justify, you don't explain, you— No. No is a full sentence. Right. >> Well, no is a full tense. And this is the thing, 'cause the moment you start to explain, then you start to reopen the conversation. >> Exactly. >> Whereas if you use fit language, that conversation closes completely because you're not accusing them of anything. You're actually just declining the offer and the role to work with them. >> Absolutely. Not leaving room for negotiation, right? Because >> that is where they will usually try and negotiate. If you're, you start justifying and explaining, you're saying, "I'm open to discussion." It's not helpful. >> No, it's not helpful at all. And it does happen. It's, I mean, it's happened with, it's happened with me. You know, these US tariffs and stuff. One of my, one of my other businesses, one of the clients said, "We want you to reduce your fees by—I think it was 10% or 20%, whatever it was—to absorb the cost of these tariffs." >> Oh my goodness. >> It's like, uh >> wrong person to come to that maybe. >> Yeah. It was like, "Hell no." >> No way. >> Hell no. >> No. And they were like, "Oh, well, we'll have to find another supplier." And I'm like, "Fine, go for it. Go for it." >> Yeah, off you go. >> Which they didn't. >> But the thing is, they are going to try and ne—negotiate with more money or better terms or, or a sudden change in tone, which, which can become confrontational. And I think this is where businesses undo their own judgment. Because if you accept, then all you're doing is teaching them that pressure works and that your boundaries are not set. They're actually—your boundaries are completely negotiable. >> Right? So if you >> but it's like that in a personal relationship, isn't it? >> This is just literally what I do with my clients in their personal relationships, but in business it's all the same. It's boundaries. It's knowing yourself and holding your boundaries. Because it's that thing of, if you're going to end a relationship, if you decide that's the end, you, that is it. You actually have to end it. That's the end of it. There's no more. >> You >> have to end it cleanly and you have to end it without bargaining. And I think that a lot of that work though is internal, isn't it? Contracts. The contracts are tidy and handovers are clear and the team understands what hap—what's happening. But it's the emotional side of things that you have to kind of >> get clearer in, in your own head. Which is why the conversation itself that you have with the client should be short and it should be calm, >> right? Because >> just like if you were breaking up in a relationship, you don't do it with dramatics. And >> well, I mean, you could >> I quite enjoy dramatic breakup. >> But if you do it in the way where it's short and calm, what will happen afterwards? It is far less dramatic than people will expect it to be. >> The thing is, once you do, do it, >> the relief is immediate. >> Huge, right? >> Yeah. So, and inside the company the relief is immediate because people start to relax and that background tension that was there with this client starts to disappear. Now of course externally I suppose very little happens. What, what does change though is how the business starts to feel >> and how the business starts to—the business feels >> to work with as a client because now you've got all this time that you're not wasting on this dick client >> tricky client. Yeah. Dick client, tricky client. Yes. >> And it also feels different for the people who work there as well. It feels better to work there. >> Right. For sure. Which is what, you know, often what people are trying to protect in the first place, isn't it? That feeling? >> I think what's really interesting is that luxury has always involved exclusion >> right >> when you say the word exclusivity to people—I said it to a client, the client said to me a couple of weeks ago, "Okay, well, we want to be exclusive." And I said, "Okay, fine. So who are you excluding? Who are the people you're excluding?" And they're like, >> "Well, no, I, I don't want to exclude anyone." I'm like, "But why?" That, the, the very word exclusivity means to exclude. >> Absolutely. >> You know, Yeah. >> And the thing is, most people accept that when it applies to maybe products or access to a club or whatever. >> Yes. >> But they really struggle when it's applied to clients. >> Yeah. And sometimes the most sensible decision that you can make is to stop working with someone who pays well but costs far more than the fee suggests. The—this is the thing with exclusivity. It is exclusion whether you like it or not. And within luxury >> our entire industry is built on excluding people. >> Exactly. >> Exactly. Don't have to include everyone just because they want to be included. Do you? >> No, you don't. >> Right. Especially if you're in luxury. >> Yeah.