Login or Join

Search
Close this search box.

ALP 28: Saying no to prospects and firing clients of your agency

Chip and Gini discuss an uncomfortable topic for many agency owners: how and when to say no to prospects and fire clients.

It all comes down to the right fit. Successful agencies make sure that they can meet the expectations of their clients — and do so profitably.

Those agencies that really excel also make sure that they can tell a clear, consistent story with their client roster.

And that means saying no to new business and letting clients go.

Gini says agency owners need to ask themselves, “Can you deliver? Are their expectations wacky or not? Does your team have the capacity?”

She explains why it is important to turn down and walk away from business: “When you say no, it allows you to say yes to the right kinds of clients.”

Chip notes that “the irony is, by firing your client or saying no to a prospect, you have almost unintentionally increased your credibility, and in some ways, probably increased the perceived value of what you’re providing, because it is pretty uncommon for service providers to tell a client or prospect to go away.”

He explained that many agency owners just keep servicing the same clients and responding to whatever business comes in because it’s the easiest route to take. However, he warns that “momentum is the enemy of good business decision making.”

“It is definitely hard to turn business away. It’s definitely hard to fire clients, but it always works out in the end — always,” Gini says.

Transcript

CHIP:
Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin

GINI:
and I’m Gini Dietrich.

CHIP:
And today we’re going to teach you how to turn down revenue, just say no to money.

GINI:
The opposite of Jerry Maguire…”show me the money!”

CHIP:
“Hide your money!” This is this is the this is funny because most agency owners that I talk with are looking to increase their revenue. And so instead, we’re going to help you figure out how to say no to revenue, but in the long term, it will actually help you out. And the specific topic we’re going to be discussing is, how do you say no to prospects who are a bad fit? And how do you fire existing clients when they are no longer a good fit?

GINI:
You know, I tell this story a lot, and the poor guy, I kind of feel bad for him if he knew I told the story. But many, many years ago, it was two weeks before Christmas. And the prospect called, and he gave me his story and said, You know, I just really need some PR help, because I had a meeting with Target last week. And they told me that if I don’t sell out of my product that they have on their shelves by Christmas, that I’m not going to be back in Target starting in January. So really need to have some PR, the front page of the New York Times will be great, because then we can sell our the product, it won’t be an issue. And I remember thinking, Okay, not exactly how it works. And I may have said something to him, like, Are you are you planning on, you know, assassinating the president of the United States? And he said no. And I said, because that’s really the only way you’re going to get the front page of the New York Times. But I ended up having to turn it down. Because A, his expectations were completely out of whack and B, that wasn’t something that we could do. So it wasn’t an ideal client for us. And it wasn’t a situation that I wanted to put my team in. And I feel really I still to this day, feel really bad. And I don’t know if the poor guy made it or not. But like the there are times where you’re going to have to make that decision. And you have to base it on: Can you deliver? Are their expectations wacky or not? Does your team have the capacity? Like there are all those things that go into making that decision. Are they an ideal client? Will they be a pain in the butt? You know, all that kind of stuff.

And it’s really important to think about those things. I mean, the particular example that you’ve given is something that I’m fairly sure there’s not an agency in the world that could…

Oh no, someone did!

CHIP:
But did they fulfill his desire or did they just take the business?

GINI:
No, they took his business. But I don’t think they fulfilled this.

CHIP:
Yeah. Yeah. It just it’s, it’s, it’s virtually impossible to meet that kind of expectation.

GINI:
Yeah, you can’t do that.

CHIP:
Although, you know, for the benefit of any government agents who may not be listening to this podcast. Gini was joking, she was not really advocating. And just just so we’re clear, was a joke, the wonders of modern technology with speech transcription, all that I’m sure this, this transcript will end up on someone’s desk to evaluate. And I’m really sorry that you’re having to listen to the rest of this just because of Gini’s joke. But in any case, it look it is it is a real challenge. It is, it is always hard to say no to money. At almost every stage of an agency’s life, you want to have as many clients and as much revenue as humanly possible. But if you cannot do the job well, if you cannot do the job profitably, you are better off not having it.

GINI:
Not only that, but I think that’s it, that also extends into when to fire a client. And another really good example, and I’ve used this client before on this podcast, I know. But we went into a meeting with a client, it was our first meeting, and he berated his chief operating officer in front of us very first meeting. And then at the end of it, he turned and he looked at me with my team there and said, Don’t f this up, except he actually used the word and I was like, I’m sorry, what? You know, don’t f this up, or you’ll be fired. And I was like, ok we’re in our first meeting. So and actually, at that point, we all had a conversation about it. Is this a client we want to keep and it took it I think it took us a couple more months to work up the courage to fire him and we ended up firing him. But yeah, I mean, after that first meeting, I should have done it, that’s a pretty clear indication that it’s not going to work out.

CHIP:
Yeah, I mean, that’s, that goes in keeping with so I guess this was three or four months ago, I think I wrote an article about five times you should say no to new business. Yeah, so this probably falls under number five, which was skip clients that make you queasy, right. Or possibly number four, avoid abusive clients. Either one will probably fit that particular example. But you really do need to trust your gut on some of these things, you need to take a look at how the you know what the client’s expectations are, but also how they treat you, how they treat your team.

GINI:
How they treat their team, I mean, in front of you too. When you’re berating, your chief operating officer in front of a brand new team it’s probably not very good….When you’re not when the team is not there either.

CHIP:
It is it is certainly less than ideal to see that unwind in front of you. But you know, a lot of times, it’s very difficult to spot these during the prospect stage. So that means frequently you end up with a client that maybe over time evolves poorly or, you know, perhaps you just didn’t spot it from the get go, whatever it is where you may have to say it’s time for us to go in a different direction. Or, as is often the case with agency clients, it may be that the work that they’re looking for, is no longer profitable for you to do, because a lot of your particularly retainer based work with will evolve over time. And it will take more effort than you anticipated in order to accomplish what you said you could do. And so you then need to figure it out. How do we how do we right size this? Or do we need to move on? So all of these things go into the mix of thinking about when you need to have these difficult conversations with prospects and clients.

GINI:
Yeah, and it’s, it’s not fun, a fun conversation. But I think it’s one of those things where we all dread it and it sort of goes to having to let an employee go as well, you dread that conversation, you dread having to do it. And so you put it off as long as possible. But then as soon as you do it, you’re like, oh, why didn’t I do that sooner. And part of the reason is because part of the reason you feel that way is because A, it doesn’t take up as much mental space as it has for several months. But also it opens the door and your capacity to bring in an ideal client. And that’s what you that’s what you really want to have happen here is that you don’t want to take on so much revenue that you’re certainly meeting your goals, but not able to work with ideal clients, or you’re working outside of your core expertise, or you know, all of those things that go into it. When you say no, it allows you to say yes to the right kinds of clients.

CHIP:
Exactly. And as your agency grows and evolves over time, you will find that the kind of work that you want to do, whether it’s the size of project type of client, the the kind of expertise you’re applying, those things will change over time. And some of your long term clients may not be a fit as as you make that evolution. And those I think are the most difficult because perhaps you can do the work. You have a good relationship. But if you’re looking at your client roster, you know, it’s it’s sort of Where’s Waldo, that’s, that’s the one that you know, that stands out from the crowd. And perhaps you need to, to think about how do you how do you deal with that. And look, most agencies have, you know, a small handful of legacy clients, if they’re old enough that, you know, perhaps they just keep out of sentimental value, or because they’re a friend of the family or you know, who knows what. But, you know, ultimately, you need to be really thoughtful and prune your client list from time to time to make sure that it is a good fit for the overall objectives of your agency.

GINI:
And I think you’re right, you will find that it may be a really good client, and it may be a long term relationship you’ve had and you may have it sort of on autopilot where you’re doing, you know, good work, and they’re happy, you’re happy and everything. But you do have to take all that into consideration. We made a shift many years ago to do only B2B work. But we had a client who I had I started the business with, they’re very consumer, and we just weren’t doing any more consumer, we weren’t doing any consumer work. And I finally had to say to them, I love you guys, you helped me start my agency, but we’re not, you’re the only consumer brand we have. And they were really very cool about it very cool about it.

CHIP:
And if you’ve had a long term relationship with a client more often than not, they will understand because you’ve, you’ve got that kind of deep relationship. Now, it’s not always true. So some will react poorly. But if if you’ve been able to have a good strong relationship over time, then you can have these conversations and you may dread them going in, but they will often go much more smoothly than you anticipate. You know, in some cases, you’ll even find well, geez, you know, the the main reason we were sticking with you guys was out of loyalty.

GINI:
Because we kind of need to change too. Yeah, yeah.

CHIP:
And it’s, look, it’s it’s healthy for agency client relationships to change over time. You know, there are, quite often if an agency and a client have been together for 5, 6, 7 years, it may on the surface appear to be working. But it may not be best for either party at that point. Now, that’s, you know, there’s, there’s no blanket rule here. And I’m not saying if you’ve had a client for five years, go fire them tomorrow. So please don’t send me an email that complains that I’ve told you to do that. But it is helpful to be thinking about these things and understand that that your business may need refreshing from time to time – relationships need refreshing from time to time, and you need to decide what the right mix is for your agency for the vision that you have for the coming years.

GINI:
Right. Yeah, and you know, I mean, it all goes to capacity, your ideal client, one of the things we have our clients do every single year is look at their ideal client list and make sure that the organizations, the industries that they have on that list continue to be their ideal clients, what are the characteristics? What are the characteristics of the organization, but also what are the characteristics of the people you’ll be working with? Do those clients fit into it, and it also helps you determine when a prospect calls, and they’re not the right fit that you can just politely say, I don’t think that we’re the right fit for you. You one of the things I like to do is as have a roster of agencies that I can, you know, recommend to them or refer them to so that it’s not just a No thanks. But you know, goodbye. And you can certainly have that as well, because we all have relationships with other agency owners. But it does, it really helps to have to be thoughtful about that list of your characteristics of your ideal client so that you don’t end up working with somebody that you shouldn’t be.

CHIP:
Well, right. And I think that the key is that you need to be intentional about what it is that you have for clients. So, you know, we often talk about how many agency owners are accidental agency owners. And I think a side effect of that is that a lot of the the clients that come through the door are just as accidental. And so as as an agency finds its focus and figures out, you know, who its ideal client is and what they want that roster to look like, they may decide to keep on some of the legacy business. And that’s fine, as long as it’s intentional. Sure. But it’s it becomes a problem when it’s just because I want to avoid that conversation. I don’t want to think about it. I don’t want to deal with it, or, or I don’t don’t want to give up that revenue. But you haven’t thought about what it means so. So accidental agency owners can still have intentional agencies. And I think that’s a really key thing for every listener here to think about as they’re looking at their client roster and their prospect list and figuring out who is and who isn’t a fit.

GINI:
Love that. You should absolutely have an intentional agency, even if it isn’t, you’re there accidentally for sure you should. It’s all of these things you you need to be thinking about. Because you will get yourself into a situation and maybe you’re been there or maybe you’re about to go there. And you’ll be like, yep, I’ve heard this. I went down the road anyway, I had a business coach very early in my the agent, my agency’s life who would say obey your gut, obey your gut. And every time I have not obeyed my gut, I have regretted it every time.

CHIP:
I would agree wholeheartedly. 1,010% not that there is such a thing, right? You get the idea. The my gut is is right more often than not over the course of my business career. And in those situations where things have not ended well, it’s largely because I ignored that gut feeling and went with something that appeared to be more fact based, when in fact, in retrospect, it really wasn’t it was more going along with momentum. And momentum is I think the enemy of good business decision making.

GINI:
Interesting. Yeah, I would agree with that, for sure. I hadn’t thought about it that way. But yeah, you’re absolutely right.

CHIP:
So, you know, we’ve sort of talked now about when it is that you should say no to prospects when it is that you should fire clients. But what you started to touch on a moment ago was how you actually do that. How do you say no? How do you say it’s time to move on? And there is an art to this. And I think what you identified is a key point, which is, don’t just say no, don’t, don’t just say, you know, hit the road Jack, if they’re an existing client, it’s coming up with a potential alternative solution, whether that’s specific names, or some ideas or something like that. Now, this obviously, this wouldn’t apply if you’re firing someone because of bad behavior or something like that, you know, if the client is just, you know, completely unreasonable, fine, just kick them out the door and move on. But more often than not, it’s just because it’s for some reason, not a good fit. So you need to go into that conversation, prepared to offer them some alternatives. And and, frankly, to be prepared for them to push back and, and essentially try to negotiate it whether that’s a prospect say, well, but what if I, you know, what, if we asked you to do this instead, or because a lot of times a prospect, if you’re at that stage of the prospect they’re already feeling invested in?

GINI:
Right, yeah, I’m laughing because that is true. It’s sort of like dating, you say no, and they just keep pursuing you. Right?

CHIP:
And in fairness, sometimes it can work out. Absolutely, yeah. So I have had situations where I have, I have gone into a meeting. And the purpose of the meeting is to fire a client or say no to a prospect. And, and I can think of specific instances of both, where the conversation actually turned into something that was productive for both sides. So sometimes, and I’d say it’s, you know, not all that often. But sometimes, you can actually find a way to redirect the conversation in a way that’s actually productive for your business. So either way, you want to be going into this conversation, knowing what it is that you’re trying to accomplish, but also trying to make it as smooth and easy for the prospect or client as possible.

GINI:
Yeah. And I think, you know, there are certainly going to be, especially from a prospect standpoint, there are going to be situations where that does happen. I mean, I’m in PR, so one of the good examples I can give is people prospects will call and they’ll say I’m looking for PR, and what they really mean is I’m looking for you to get me stories, stories about my organization, in print, online, on broadcast, TV, radio, that’s what they mean, they don’t mean you, they want PR, that’s what they mean is I want publicity. And so I you know, I’ll ask a bunch of questions to see where their head is. And then I’ll say, you know, I just don’t think that we’re the right fit for you. Because we don’t just do Media Relations, we only take on clients that are willing to do an integrated program. And at that point, it goes one of two ways. Oh, okay. Well, thank you, is there somebody you can refer me to? And absolutely, you know, there, there are plenty of firms that just do Media Relations and do a great job of it. Or it goes the other way, which is, well tell me more about your process and how that works. And so then I have the opportunity to talk about our process and the PESO model and all that kind of stuff in and then, of course, that then that conversation turns into, is this an ideal client for us or not? And if it is, then you’ve sort of turned the direction turn the conversation from, I just want publicity to actually doing something that you’re following the process that your agency has created, versus going into it saying, Well, I’m just going to say no, because the prospect only wants this one thing.

CHIP:
Right. And, and the irony is, by by firing your client or saying no to a prospect, you have almost unintentionally increased your credibility, and in some ways, probably increased the perceived value of what you’re providing, because it is pretty uncommon for service providers to tell a client or prospect to go away. Right? Right. But it just it is it is not commonly done. And so the expectation of the client is, you know, they, they just want to take my money no matter what. And so when you say, No, I don’t want your money. It then causes them to re examine everything that you said, and perhaps Well, you know, maybe it turns out this agency guy, or gal is correct, maybe maybe the advice to look at a, you know, an integrated campaign versus simple Media Relations and publicity, maybe that is the right solution. Maybe what they’ve been telling me as far as you know, how we should make some strategic changes to what we’re doing, or that we don’t have the right budget or whatever. Maybe I should actually pay attention to that. So, you know, you have to understand that, that that act of being negative can actually be perceived to be a positive by a lot of folks on the receiving end.

GINI:
Yeah, I think you’re right, it does add some credibility, because people don’t do that. And, you know, it’s, it’s hard, you know, I’ll say, I’ll have people say to me, but really, you’ll turn somebody away, if they just want media relations, don’t you feel like if you brought them in and you did Media Relations, and you really did well, that you could sign that you could you know, that you could grow the business? Maybe. But that’s not how we work. That’s not our process. So I never ever, ever go against our process that I know works, and that I know, is going to grow the business and keep clients around forever. So no, I don’t and it is definitely hard to turn business away. It’s definitely hard to fire clients, but it always works out in the end, always.

CHIP:
And I think the key is to go into this conversation and think about the potential directions that it could go and and understand what it is that you’re trying to accomplish. Because if you’re if it’s just straight up, no, and it doesn’t matter, there’s not a thing in the world that you could imagine that would change your mind. You go into it one way, if it’s really that they’re they’re not buying into your strategy. And so that’s why you want to do it, then you have to understand, okay, well, how far would they have to move in this conversation to make it still interesting to me? If it’s if it’s a budget thing, you know, what is the floor that they would have to be willing to meet from a budget perspective, in order for us to at least continue the conversation about whether or not it’s a worthwhile thing? And so it’s better to go into the meeting already starting to think about those potential avenues, so that you’re not blindsided by those moments? Because I can’t ever recall one of these conversations where I have have called up a prospect or client to say no, and it’s it’s been a quick conversation, it almost always turns into a negotiation. rationalization, yep. You know, something along those lines, because more often than not, if if you’re in that conversation with them, they want to be with you.

GINI:
Yes. And you will find, yeah, for sure. I mean, I think I told the story in a few episodes ago, but I had a client that I or a prospect that I had to call in and say that too, and she was like, I feel like we’re breaking up. And I was like, me, too. And it was this weird. Like, even though we we both knew we couldn’t work together, because we had created that level of trust and rapport. And I still talk to her all, you know, at least once a week. So, you know, they did find a great agency who was willing, who was able to do exactly what they needed to do, and we weren’t it for them. But, you know, we I also created some rapport with her that so that when they’re ready for that, for our process, I will definitely get that phone call.

CHIP:
And it’s it’s one of those things where sometimes you misjudge, the client or prospect, so I’ve had circumstances where, you know, I simply assumed that the client did not have more budget in some cases. And these were clients that I knew really well. And it turned out, they did, and for whatever reason, whether it was because they could reallocate from somewhere else, or because they had another source of funding from a different department or whatever, you know, that there’s all sorts of ways that that a client can alter their strategy, come up with money, do things that you might anticipate even even if you know them really well, you may not realize some of what they have going on behind the scenes that may impact it. And so they may be willing to come a lot farther to you than you want. But you also need to be careful that you don’t get talked into something you don’t really want to do right in this process. Because it’s also very easy. Let’s say that a client does have more budget than you thought, and they just start throwing money at you. It. Is it really a money issue? That’s why you need to think about it before the conversation. Because if they say, Well, what if we paid your double? You may say well, Oh,

GINI:
sure. Okay. Triple? All right.

CHIP:
But but but if the reason you’re saying no isn’t because of the profitability of the account, and rather, it’s because it’s not a good fit, right? You don’t feel you can do it. It doesn’t matter how much they’re paying you, right? I mean, I suppose at some point it does. But nevertheless, you want Yeah, yeah, you want you want to be careful that that you’re not promised something in that meeting that will cause you to say yes, but then you’ll regret it later. Because, you know, saying no, the second time is even harder. Yeah, than the first, yeah. So so know what your what your parameters are going in. So that you you’re comfortable with however that conversation plays out.

GINI:
Love it.

CHIP:
And I think ultimately, you know, the last piece of advice I’d leave you with is is something that I was taught very early on by one of my first bosses, and part of this is, you know, the communications world is is a relatively small industry. Still, there’s lots of people in it, but it’s still kind of a small town feel. So you never know, where people are going to end up down the road. So you know, even if a client has been incredibly frustrating to work with, unprofitable, not a good fit. Don’t take it out in this meeting, take remember that sort of how you how your agency grows, is how it will shrink. How you do business today will impact how people do business with you tomorrow. So go into it with that mindset and make sure that you’re trying to be as helpful as possible, soften the transition, give them some referrals, give them some ideas as to how they might be able to meet their challenges in a different way. If you do that, you will put yourself in a better position to grow either with them or through, you know, the good karma that creates down the road.

GINI:
Mm hmm. Totally agree. And good karma pays off.

CHIP:
It absolutely does. And so with that, we’ll leave our listeners with a little bit of good karma. And hopefully they’ve taken away some decent lessons here about when they should say no to new business, when they should fire clients and more importantly, or as importantly, how to do it effectively.

GINI:
Yes, love it.

CHIP:
And with that, I’m Chip Griffin

GINI:
and I’m Gini Dietrich

CHIP:
And it depends.

New Episodes by Email

Get the latest Agency Leadership Podcast episodes delivered straight to your inbox!

MORE OPTIONS:   Apple Podcasts    |    Google Podcasts    |    Stitcher    |    Spotify    |    RSS

Like this episode? Share it!

Facebook
Twitter
LinkedIn
Email
The Hosts

Chip Griffin is the founder of the Small Agency Growth Alliance (SAGA) where he helps PR & marketing agency owners build the businesses that they want to own. He brings more than two decades of experience as an agency executive and entrepreneur to share the wisdom of his success and lessons of his failures. Follow him on Twitter at @ChipGriffin.

 

Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, the lead blogger at Spin Sucks, and the host of Spin Sucks the podcast. She also is co-author of Marketing in the Round and co-host of Inside PR. Follow her on Twitter at @GiniDietrich.

Recent Episodes

Never miss an article, episode, or event

Subscribe to the weekly SAGA Newsletter

Subscription Form