Terminating a Client Relationship.

Sometimes it may become necessary to terminate the relationship between you and your client. Either party may elect to separate, but regardless of who initiates the process, it is important to use communication to mitigate the damage to both sides.

When the firm decides to terminate

More firms are examining their client base and terminating relationships with unprofitable clients. If your firm decides to terminate a relationship, you must be sure to communicate this news carefully. The way that you elect to handle the situation will influence the reputation of both you and the firm in the future. Remember that more people will communicate bad news about your firm than will spread good news. This means that it is important to phrase your termination notice in a way that convinces the client that he or she would be better off doing business with someone else.

Example

We have enjoyed doing business with you over the past three years, Ms. Adams. However, because you and I have not been able to work out a mutually agreeable payment schedule, I must suggest that you obtain tax preparation services from another firm. We are sorry that our payment requirements do not meet with your approval.

A fuller example is the "Sample Termination Letter--When the Firm Terminates a Client," which you can modify and use when the firm decides to terminate a client.

When the client decides to terminate

If a client elects to terminate your relationship, it is easy to get caught up in the emotion of the situation. However, there are steps you can take to make the best of a difficult situation.

Interview lost clients. When the firm loses a client, management needs to know the real reason behind this event. Progressing without the right answers almost always results in continuing problems and denies the firm the opportunity to make changes necessary to stem the flow of failure. Obtaining feedback from clients leaving the firm through an informal interview can give the firm important information about its performance to date...