Bad clients are the bane of freelancers. Whether they’re panic-mongers, late-payers, or simply time drains, bad clients can have a disproportionately negative effect on your business (not to mention yourself). And often, that negative impact is so subtle that you don’t even realize it’s happening.
It’s a good idea to have a periodic review of your clients to see who’s giving you the most grief — and the greatest opportunities — and prune the client list accordingly.
Assessing Client Impact
When I assess my clients’ impact on my business, I balance a number of factors.
It’s a good idea to start by looking at the number of hours you’ve worked for each client. I track my time for every client, so I have a record of what I’ve done, and how long it’s taken, for each one. Often, I’ll do leg work for a client that I won’t charge for; if you do the same, include that time in this tally.
You may also include travel time to get to and from client meetings, so that you have a completely objective and realistic view of how much of your time each client consumes.
Add up the invoices you’ve had paid by each client in the last year. Also note any invoices that are outstanding. Then divide the actual income you’ve received from each client by the number of hours you’ve worked for them to get a genuine per-hour income figure for each, as well as an overall dollar value.
Every freelancer has clients they’re aiming to cultivate over time, and these kinds of strategic, long-term goals can make client pruning difficult.
One approach you can take is to simply make a list of the potential projects you’d like to gain from each client. If you want to get a bit more specific (which is a good idea), you might put an estimate of the dollar value of each projects next to every item on that list.
Additionally, consider adding a timeframe in which you’d like to obtain that potential work, and note how much of your time you believe will be involved in winning that work. This can be difficult, but making a sensible, thoughtful estimate can not only help you get a grip on which projects or clients represent the best value for your expenditure; it can also help you to begin to think about the steps you’ll take to move those clients to signing on for that work.
4. Other Notes
“Other notes” is a polite way of saying “trouble”. If you’ve had specific trouble with a particular client over time, identify what that trouble is or was — what personal or circumstantial characteristics played into that bad scenario. You might choose to give each client a rating out of 10 for “good behavior” or “difficulty” if you like.
Adding it Up
We’ve reduced each client relationship to a bunch of statistics and maybe a few keywords. This is ideal if you’re going to make a totally objective assessment of your client base. You’ll be able to see who represents the best value for your time, and who offers the greatest potential for ongoing work of value.
At this point, you should be able to identify the under-performers. You might simply decide to move on from these clients so you can focus on developing the good relationships.
But in the good as well as the bad relationships, this analysis will help you to identify any issues that you might want to correct. For example, one of your best, longest-term clients might turn out to be a significant time drain on your business. So you might consider strategies by which you can make your relationship more efficient or cost-effective.
Cutting the Ties
Cutting ties with under-performing clients can be very difficult, but you shouldn’t feel so daunted by the prospect that you don’t do the deed. After all, this is your business we’re talking about. It makes sense to focus on what works, rather than to pour time and energy into what doesn’t.
Perhaps you’ll tell them you’ve decided to shift your business’s focus, or that other commitments won’t allow you to give them the level of service you’d like to. Maybe you’ll be able to recommend another provider they could use. Ideally, you’ll give them some notice of the date beyond which you won’t be able to work with them, so that they have time to take stock and work out what they’ll do next.
This is the type of analysis I use not just to prune my client list, but to identify areas in which I could be better utilizing my time. What signals or figures tell you it’s time to drop a client?