Most of us have had relationships go sour. They start to get a distant look in their eye, pull back from activities you enjoyed doing together, and eventually you get the speech: “It’s not you, it’s me.” Of course this week we’re talking about budgetary concerns with your clients.
Client Budget Cuts Getting You Down?
It’s never an easy situation to have a client pull back on their budget, even if it’s not because of anything wrong with the work you’ve been doing for them. But just as you keep a careful eye on your spending, your customers may need to watch the bottom line. How can you be ready for this possibility, and what’s the best way to manage an on-again, off-again relationship?
Signs to Watch For
Most customers won’t pull the plug without giving you warning signs. There are some common signals to watch for:
Reduced communication: If the calls and emails suddenly take a nosedive, it’s (almost) never a good sign. You should keep track of how frequently you touch base with clients anyway, to be prepared for any issues that arise.
Questions and more questions: If you start getting really detailed questions about every service you provide, especially the old “How many hours will this take?” that’s a really obvious sign.
Complaints rising: This is a tricky one, because there might simply be issues you can address to satisfy the customer again. But they could also be more sensitive to issues because they have a very limited budget that has to be stretched as far as possible.
Cutbacks: This is the obvious one, but if they actually say they are narrowing the scope of work they want you to do, it’s often the first step on the path to a pause in your relationship.
What to Do When Clients Press Pause
If you do get the word that it’s time to take a break, the first thing you need to do is have an honest conversation. Is this truly a temporary change because of a situation they expect to resolve in the next couple of months, or are they permanently scaling back your services? You need an idea of what’s behind the change in order to continue serving them the best you can.
Once you have a clear picture of things, talk with the team supporting the client. When they want to cut back, your people might feel like it’s their fault. Armed with insight from the source, let them know they’re doing great work and this is just for budget reasons. What you don’t want to do, however, is keep giving them the same amount of work for less money, because it devalues your efforts and can cause more long-term problems.
When to Say Goodbye
It might feel counterintuitive to let a good client go, but there are times when it’s better to make a clean break rather than let the relationship gradually dwindle. You should have a threshold of hours (or $ if you’re billing based on projects) below which it’s not worth your time to maintain the client. Or if they don’t know how long it might be before they can get back to a healthy work level, you might want to just tell them to reach out when that happens. Raising the average revenue per client (without pinning all your financial hopes on just a couple of big spenders) can boost your profitability. Just make sure you’re not burning bridges when you let a customer go.