My first response to the economic downturn was to tighten down our expenses. Probably the same response you had when things started going south. My second response was to figure out how to provide more value to our current clients. I talked about that quite a bit in our eBook, Kicking the Recession's Butt. My third response may seen a little counterintuitive:
I'm going to fire some clients.
When times are good, we can afford to accommodate client requests that are a little outside the scope of our engagement. When our revenue and margins are high, it's a little easier to over invest in a relationship or to be a little more flexible in our billing. But when times are tough, we need to evaluate our client relationships as carefully as we evaluate our employee relationships and our overhead costs. Here are some questions we need to ask about every customer and client:
Is this someone who truly recognizes the value we deliver?
Is this someone who is willing to pay for the value we deliver?
Does this client regularly ask for "deals" or is there often rework that we're not fairly compensated for?
Are our margins lower on this client than on others?
Are there significantly more problems with this client than with others?
Do the relationship style or operating procedures of the client make it difficult for our staff to deliver our best work?
These are just a few of the questions we need to ask. Not all clients are good clients. Not all good clients remain good clients forever. I appreciate every client I have ever had. I really do. But when an objective evaluation reveals problems, we need to address those problems – sometimes by firing the client.
