A savvy business owner knows which business connections are worth his time and energy and which ones are not. But unfortunately, many others don’t take the time to prune dead-end or troublesome clients simply because they can’t bring themselves to cut the cord for fear of creating an income drought. When was the last time you took an objective look at your client list with an eye to weed out the ones who are more trouble than they are worth, or don’t fit into your profile of an ideal client?
Culling your client list is an important business strategy. It is not personal. It is about their value to your business. According to Anthony Davis, a New York-based partner with Hinshaw & Culbertson LLP, “…this strategy works.” Furthermore he advises,
“Being selective is key. I choose only those clients who meet my predetermined criteria in regards to the type of work and fee-paying capacity.”
Another professional service firm who stays on top of its client’s list and culls it when needed is Deutsche Bank. It has begun to close accounts for customers whose investable assets have fallen below new thresholds. Along with human capital, these professional services firms recognize customer selection and retention criteria as the most important aspect of crafting their firm’s success.
To actively seek the right type of clients and isolating them as “best fit” for your business is what client culling is all about. As a result, you will have a rationalized client base which can free up valuable internal resources to service your current clients better and up-sell more value-add services to them. In addition more budget can be redirected from account managing poor-fit clients and be put into finding more “best fit” clients. In fact the effect will not only improve your profit but make your work more enjoyable.
Dropping a client is not easy. You can take an approach of just fazing them out gently and gradually. This involves not telling them flat-out that you won’t be working with them anymore. With any luck, they won’t even notice that you’re no longer pursuing business with them. By using this gentle touch solution, you get the best of both worlds – you’re no longer spending time courting sales that just won’t happen, and you haven’t insulted contacts that then might bad mouth you.