If you’re like me, your goals include developing as many new clients as possible and keeping clients you’ve obtained in the past. For a successful business, it is imperative to grow with new clients, products and campaigns. 

But, what do you do when one of those new clients does not fit with the culture of your company? What if you find that the margins can’t support the amount of work required to perform at the level the client needs? 

When you begin a client relationship you “don’t know what you don’t know” and sometimes you find compatibility issues. A new client relationship brings hope for a win-win, but sometimes it doesn’t pan out. 

During the 4th quarter each year, we export the past three years of sales and profit data on each client. We benchmark every client for gross profit, sales revenue, job problems and potential order growth. This allows us to quantify each client and candidly look at the client’s worth to our bottom line. 

We classify each client using four descriptions: appropriate margin, low margin, high touch and low touch. Then we add the non-quantifiable metric of compatibility. This practice answers the question, “Do we have clients that’d be better off as a competitors’ client?”  

If the margins do not support the client relationship, we increase the sell price. We have found that many times the client is willing to pay a higher price and values the relationship more than we understood. 

If a client does not share our values or regularly treats our staff unprofessionally, we terminate the relationship by explaining that our “business model has changed” and we feel that they need a different marketing partner.  

The key to growing profitable sales is obtaining and keeping the right clients by making business decisions on whether to hold, fold or pass.