When & How to Fire a Managed Services Client

“Some clients just aren’t worth the money, for all the stress that they give you.”

You may find yourself in a situation where your clients are no longer profitable. Or it’s just that you no longer want to work with them. It can be relatively easy when you have to fire your break-fix client. That once-a-year transaction you’ve lost may not have that much impact in your revenues. But it’s a different story with managed services. The steady income from someone who signed up for your plan may not be easy to let go. But is it worth to keep your customer who never listens, even goes against your recommendations, and wastes much of your time? Or maybe it’s high time to fire your managed services client.

Here are practical considerations about when and how to do it.

When It’s No Longer Working

It’s just your typical day and then your phone rings. When you see who’s calling – suddenly, you have butterflies in your stomach. It’s that problem client once again. What is it now? It’s been less than 24 hours since you visited them onsite. You begin to feel cold sweat on your forehead. It’s going to be another long, dry, and meaningless conversation if you answer that call. So you ignore it for now. Then you open your email, and see not one, but five messages from that same problem client. You dread opening those messages. While you’re still thinking what to do, another email drops into your inbox. It’s the sixth message. Now you long for the day when you can fire that client.

What we have above may be an extreme scenario, but a problem client can cost you more than money. There’s your emotional cost. When your managed services client has the ability to raise your blood pressure in a few seconds, it’s no longer healthy. This can greatly affect your productivity for the day. In fact, it affects everything and everyone involved in your business. Even your other quality clients can feel the stress levels. When you lose happiness in doing business, you’re likely to make mistakes when distressed. And this can translate into financial loss, too.

But instead of just dragging your feet and putting up with this unhealthy business relationship, here’s what you can do.

First Initiative – Talk it Out

Don’t just assume that your clients know what you know to be the problem. At times, you may look at it as your client not giving importance to IT in their business. They may be the habitual late payer. They may appear arrogant and unreasonably demanding. But these are all seen only from your point of view, and the only way you can be sure is to talk to your client. So before you cut the cord of your business relationship, it’s best to sit down first and lay your cards on the table.

Of course, this is not an easy task. You could find yourself struggling on how to point out the negative things you see in your business relationship. The ideal approach to this is an honest, yet tactful, conversation. The key is professionalism. It means that you talk objectively about a problem, and avoid being personal.

For example, calling your client “annoying,” “disruptive,” “infuriating,” or “irritating” is personal. The trick in communicating negative behavior to your client is avoiding adjectives. Instead, you can make use of action words. The “repeated” calls and messages are not necessary, but I would like to address that moving forward. That’s one way of putting it.

As another example, stating that your client is “negligent” in payment is offensive. Compare this to just saying that your client “missed” payments. Negligent is a strong word that indicates that your client is irresponsible. Or that he simply just ignored his payment dues. But saying your client just “missed” payments is impersonal. And it shows that you are assuming in good faith that your client overlooked payments for some reason. So don’t let your personal opinion or feelings get in the way. Tackle the situation, and not the person or the organization. And most importantly, provide a path for your client to move forward by presenting a solution.

This step, however, is not a sure win. Your client may or may not act according to your expectations. But this gives you the opportunity to clear things up. By this you can confirm your viewpoint about your client’s attitude towards your services. Or it could reset your working relationship with them. The most important thing is that you have laid to rest whatever issue you have with your client, and can now move forward.

When It’s Time to Fire your Managed Service Client

It’s possible to fire your managed services client right away, just like in break-fix business. But if you are working under a contract, you have to tread carefully. Be sure to follow your exit protocol as outlined in your written agreement. Otherwise, you risk yourself having a court battle. In foresight, it’s better to plan early on how to handle situations like this one. This way, you can have your exit like clockwork when you have to fire your client.

If you are not under a contract, it’s still best for you to have your graceful exit. It’s not necessary for you to burn bridges behind you. Give your advance notice that you will no longer render your IT services. This will give your client reasonable time to look for another MSP. Be ready to hand over the documentation of your client’s computers and network. And don’t hesitate to point them to another MSP if your clients ask for one.

If you can’t take the direct approach, you can opt to drop them by raising your prices if your contract allows it. It can be an across-the-board increase or increase for just a single client. Some MSPs find this approach very effective. Those clients who are willing to pay higher fees are usually the ones who respect your time and experience. They are also easier to deal with. If your problem clients decide to leave and go work with somebody cheaper, then you save yourself the trouble of firing them. But in case your problem client decides to pay the premium prices, at least you’re getting compensated for putting up with them. And because your services are no longer cheap, it won’t be a surprise if your problem client loses the problem and becomes easy to work with.