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Profit & Growth Tips for Digital Agencies

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How Your Digital Agency Can Survive Bad Customers

Posted by Nicolas Jacobeus on Jul 25, 2016

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It’s inevitable that at some point you will work with customers who are a poor fit for your agency. These bad-fit customers can damage your agency in two key ways: financially, draining more resources than you generate from working with them; and emotionally, damaging team morale.

So what do you do when you find yourself working with a bad customer, in order to minimise the damage to your digital agency?

1) Bring Your Working Relationship to a Close

The success of every agency depends on its customer relationships. While your aim is to build long-lasting relationships with all your customers, continuing to work with this bad-fit customer will do more harm than good.

Therefore, the most important thing you should do is bring your working relationship to a close. You want to make the exit process as painless as possible, so focus on how the project isn’t working, rather than pointing out problems you’ve had working with the customer.

However, it’s important that before you stop working with a customer, you ensure you can afford the drop in revenue. Your agency should always be on the lookout for good-fit new customers, and having a pipeline filled with prospects and new leads will help to stabilise your workload.

2) Communicate with Your Employees

If you’ve got a poor-fit customer, it’s your employees who will be most affected. A bad customer will be a drain on your team’s energy, efforts and morale, so when you decide to stop working with a customer who’s a particularly bad fit, let your employees know.

They will have previously made you aware of problems they’ve encountered working with this customer, so sharing the reasoning behind the decision will let them know you’ve listened to their feedback and it’s influenced your decision. This will make them feel valued, and reassure them that the agency cares about the wellbeing of its employees.

Additionally, it’s important to reassure them that no jobs are at risk as a result of this customer relationship ending (because you’ve got a full work pipeline with new projects lined up).

3) Re-motivate Your Employees

Working with a bad-fit customer can be very demoralising, so you want to re-energise your agency team as soon as possible.

Taking on new projects for customers who are a good fit for your agency’s skills, expertise and culture will help the team’s morale recover. Working with a poor-fit customer can be a draining experience, so it can be incredibly beneficial to give them new challenges to focus on, with a customer that they enjoy working with.

4) Learn from the Experience

The thing that has the biggest negative impact on agency morale (and finances) is repeating the same mistakes time and again.

It’s vital that you learn from this experience of working with a bad-fit customer. This will help you to identify red flags that point towards a customer being a bad fit for your agency:

  • What made them a bad fit?
  • Were they a poor fit from start or did the relationship deteriorate over time?
  • When did you first become aware of irreconcilable problems when working with them?
  • Could you have done more, sooner, to improve the relationship and get it back on track?

If things started good but deteriorated over time, you’ll pick up on key turning points that pointed to problems in your working relationship, so you can spot them early and remedy next time. Alternatively, if the customer was a bad fit from the start, you’ll discover characteristics about the company or their project that will help you improve your lead qualification process, so you can avoid taking on similar customers in the future.

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