Mr. Client, you’re fired!

A colleague recently had to “fire” a client. Over coffee, she described the details that led to the firing and anguish she felt leading up to the dismissal. She ended her story by saying, “I should have never accepted this client in the first place.” If you’re in the consulting business, chances are you can identify with this awkward and time wasting situation.

I reminded my colleague of the 80/20 rule or, more formerly known as the Pareto Principle. The 80/20 rule states that “approximately 20-30 percent of any resource accounts for 70-80 percent of the activity related to that resource.” In this book, “The 80/20 Principle: The Secret to Success by Achieving More with Less, Richard Koch offers the following examples of the Pareto Principle:

• Approximately 20% of beer drinkers drink 80% of the beer
• Approximately 80% of your sales come from 20% of your customers
• Approximately 20% of your sales staff sell 80% of your goods
• Approximately 80% of your profits are derived form 20% of your sales

I said to my colleague, “If approximately 80% of profits come from 20% of clients, don’t we need to find more clients who look like those best clients in top 20%?”

In this miserable economy, we seem to accept any business offer that comes our way. In our enthusiasm in finding a new client, we often accept clients that are outside of our comfort zone or clients that simply are not a good personality match. Ultimately, these clients cost us valuable time and money and we’ve done harm to the client who didn’t get the help they needed.

Here are a few things we must do to avoid this problem in the future. First, develop a profile of your best clients and develop a database of clients who match that profile. Additionally, when interviewing a prospective client, pay attention to your intuition.

I once interviewed a wealthy couple who wanted to hire me to develop a marketing strategy for their Internet business. Throughout the meeting, they rudely bickered with each other. I instinctively knew that they would soon turn on me. I not only turned down their generous offer, but I was unwilling to refer them to any of my marketing friends.

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