#299: How to Make Smarter Decisions About Which Clients to Keep or Let Go

Welcome to the High Income Business Writing Podcast, helping you propel your writing business to a whole new level. And now, here's your host, Ed Gandia. Hey there and welcome to another episode of the High Income Business Writing Podcast, the number one podcast for business writers and copywriters who want to earn more and less time doing work they love for better clients. With over 1 million downloads from listeners just like you across 101 countries. One of my coaching clients recently asked a very good question about a dilemma we all face at different stages of our business growth. And that is, what do you do if you have a client who started with you years ago, back when your fees were much lower than they are today? They've been a loyal client. They've just stuck with you. They've been there for all this time. And let me just read you what she wrote to me so you can get a little bit of background. I think this is going to sound familiar. It's going to feel like something maybe you're experiencing now or experienced in the past. So she writes. I've been writing blog posts for an acquaintance occasionally for almost four years, but the pay is only half of my current rate. I never increased their rate because one, the work was rare, two, they started out their content journey about the same time as I did, so we helped each other a lot in the beginning. And three, I didn't mind doing it, but it's time to move on from that. So I'm wondering if I should let them know I can only keep writing content at my current rate, or if it's better to just part ways entirely and refer them to another writer because the rate is so different. My gut says to just part ways and refer them to another writer. What do you think? All right, so this is never an easy decision, obviously, an emotionally charged decision. Typically in these situations, you have a good relationship with a client. They've been very loyal. Even if they don't pay you a ton. In many cases, you like what they do, you like them as a person, and it just doesn't feel like a huge burden to keep them on board, especially if the work is easy. So it's not like the kind of situation where everything points to just kind of moving on. They're terrible to work with. They don't pay well. You're just hanging on because maybe the work is steady or maybe you feel like you need to keep them, or maybe it's just fear. You're just like, oh my gosh. But if I let them go, what do I say? And that's going to be really uncomfortable or what happens if I can't replace them? So this is not that situation at all. But the thing is the reasons that we keep these clients, so when everything kind of checks out, it's just that the fees are really, really low. That's not a really good reason to keep a client. In fact, I find that most of us tend to make decisions, again, about prospects and clients on an emotional level. Not just these types of clients, but really clients in general. We use a little bit of logic, but let's face it, I mean, we're really using a lot of factoring in a lot of emotional elements in deciding to pursue them or to say yes or to bring them on or to accept maybe a counteroffer or maybe lower fees or whatever. These decisions are not entirely logical. I mean, look, we're human, right? But we need to be more strategic about these types of decisions in terms of who to bring on board and then once we have them, how long to keep them and if it makes sense to keep them. In order to do that, we have to apply some good objective criteria. Now, there are a couple of things that I like to do when faced with that kind of decision, because I know, like you, it's going to be an emotional decision. So I need some objective tools to help me do that. One of my favorite tools that I developed is called the client quality Matrix. Now, this is a very simple tool to use. You could take a blank sheet of paper and just turn it on its side so it's on portrait mode. And what you do is you draw basically across. So you get four quadrants on your page. And the quadrants are going to be like this. It's going to be 1 for low hassle, low pay, 1 for low hassle, high pay, 1 for high hassle, low pay, and 1 quadrant for high or medium. And then the hassle factor of working with a client, okay, so those are two variables, and you end up with four different permutations. Obviously, you want more and more of your clients to fit into the second category, right? You want low hassle clients that are high pay, that pay you. Well, now that can be a gradual thing, but it needs to be something that you move toward. If somebody's currently low hassle, low pay, like in the example from my coaching client, do you have some options? I mean, one option would be to keep them from now, but then raise your fees and you can do that directly. You could say something to the effect of, look, my fee for blog posts for New clients has gone up to X. Now, listen, don't worry. I'm not going to charge you that. But I do need to bring you up to our current rate to this other number. Okay? So there are ways to do this, and by showing them, giving them a little bit of perspective or context, that fee won't feel like it just kind of came out of nowhere. Okay, so that's one option. You can just go ahead and say, look, you know, I can't continue to do this. I love working with you. I, you know, and that's assuming that you do. Right. But I need to bring you to this level. I'm actually charging, you know, twice that much right now, so I'm not gonna. Don't worry, I'm not gonna charge you that. But I do need to bring you to this other level and, you know, give them a grace period, 60 days, for example. You may want to also let them know or remind them of the value. Here's what you're getting. I just wanted to show you of the value you're getting. You know, we've been able to increase, you know, traffic conversions. We've been able to do this, we've been able to do that. Whatever it is, you know, make sure you present the fee in the right context. And of course, this goes without saying that before you even go down that road, you need to decide, okay, is this a client I want to keep? Okay, as you're moving up in the world, it's kind of like when you're moving to a new home. What do we do when we're about to move? We purge. Right? We go through all our stuff and we decide, okay, is this something I'm going to take with me? Because, I mean, I've accumulated all this junk, all this stuff. You shouldn't take all your stuff with you. This is an opportunity to purge. So as you've made that decision to move up in your business, you shouldn't take everything and everybody with you. Okay? So I just wanted to mention that because this is not an automatic course of action, you should ask yourself and be honest with yourself, should I take them with me? And I know that that's an emotional decision, just like it's often an emotional decision to throw stuff away or donate it when you're moving. It's like, wow, this is hard to decide. Should I let go of this? Should I donate this? Well, sometimes that's the best thing. So that's one route. So assuming again, let's just stay on that path of I do want to keep them. But I need to see about bringing the fees up. One is raise the fees flat out, put it in context, explain the value, et cetera. Another thing you could do is you can offer to help them with other things. Okay, so let's say in this case, like in this example with my coaching client, she was just helping them with blog posts. Well, what about looking at other ways you could help them? For instance, can you help them with a little bit of strategy? Content strategy, web copy strategy, Maybe helping them plan their content better, repurpose with the assets they already have. Content assets, help them? Maybe you've noticed that they don't really do a very good job of converting visitors on certain pages. Maybe help them create a series of content upgrades that visitors can opt in for. There's a lot of simple things that you might be surprised. You already know, and you take it for granted, but your clients maybe aren't thinking about that stuff. Many clients have so many other responsibilities we automatically assume, well, they would know all this and you know why I'll let them bring it up. Well, not necessarily. Okay, so it's up to you, as the professional that you are to bring up these ideas to the table. So planning strategy, brainstorming, things that will generate new ideas for them and lead to more work for you. And those could be paid engagements, by the way. I'm not suggesting, hey, help them, you know, kind of come up with a bunch of ideas for free. Those could be separate planning and strategy. And brainstorming engagements you could package as a productized service. And that's a topic for another episode. And we've covered that before. But that's another great way to bring up what your profitability on a client like this. You can also change the way you price your services. For instance, you can move into a bundling model that includes both planning and execution of work or a bundle that incorporates other services. You're not currently offering that client today. So going back to, let's just say the blog post example. So look, you could explain that you're moving to a different model where you're not just providing the writing, but you're helping the client become a little bit more strategic about their content. Take a step back, do some brainstorming, be more strategic about the content they're going to create, rather than just kind of cranking it out, you know, and creating fodder, pulling back a bit so you can make better decisions, plan things out. You can align content with different events, product launches, conferences, whatever, on a quarterly basis. And you're going to bundle that additional service into your fee that includes X number of blog posts, okay? So that's one great anytime you can bundle. That's a great strategy for a number of reasons. First of all, you're providing more value to the client, okay? And believe me, you are. Again, don't assume that. Well, they already know this stuff. You'd be surprised. The second is you're elevating your value, okay? You're showing to the client, hey, you're not just an order taker. You can help them come up with ideas. You can help them squeeze more value out of these assets, these marketing assets. And the third reason, and there are others, but a third big reason, is that it makes it a little harder for the client to kind of itemize what they're paying for each item. When you create a bundle, it's kind of like when you sign up for a cell phone plan with Verizon or AT&T. You know, all you wanted was, you know, one phone, a plan for one phone. But then they talk you into, you know, then there's Internet, there's cable, there's all these other bundled services, and before you know it, it's impossible to compare what you're paying there with a competitor, right? So that's what you want. You want to create a situation where you take the focus away from what they're actually paying per post, per item and really focusing on the value and the outcome, what they're going to get out of working with you on this stuff, okay? Very, very important that you do that. Otherwise, it's so easy to fall into a commoditization situation where they're comparing what they're paying per blog post with other potential writers. So just keep that in mind. You can always bundle. Get creative there. So let's go back to making the decision in terms of, you know, do I keep them or not? Because that. I really want to emphasize the fact that you should start with that question. A factor to consider is not just do I like them? But what is the overall strategic value of that client? And I say that because the full value of client may not just come from the direct revenue or income they're generating for you. They could also be adding value to your business in other ways. So, for example, what if they're giving you quality referrals on a fairly regular basis? You know, they're referring you three, four times a year to other clients that turn into or other prospects that turn into clients. What if there's added prestige from working with that Client, they don't pay great. But man, it looks really good on my website to say that I work for XYZ company Like, the credibility that it may give you the name recognition of having that brand or that company in your roster. Maybe they're giving you work or you're developing a new set of skills. You're learning and practicing new types of projects that you wouldn't have had the opportunity to do elsewhere. That's very common with agencies, for example, where they're bringing in all kinds of different clients, bringing you into those projects, and you're able to, in a short period of time, work on a wide variety of projects that, you know, maybe they're not paying as well, but you know, they're increasing your own value as a professional because you're getting exposed to different types of clients, different types of work, and so on. So factor those strategic elements into your decision. And don't just look at the income you're generating, the profitability of that client, just from the standpoint of the work they're giving you. So this brings up a related issue I wanted to touch on, which is that it's very helpful to look at the value of a client much more holistically and over a longer time horizon. When we're looking for new clients, most writers tend to focus on landing a project. We just want to get a project. We just want to, like, say that, oh, we just landed a new client, and it's usually one project. And that's because a single initial project is the most tangible indicator that your marketing effort has succeeded. It's not enough for the client to say they want to work with you. You need a signed contract or a deposit check to declare victory, right? When you think about it, you do this unconsciously, but it's right that that's what we want. We want that deal. Too often, we don't stop to think about the real value of a client. The real value is not in that initial project. In virtually every case, I would argue that the fixed cost of onboarding a new client, doing the research for that initial project, getting familiar with the client's business, with their customers, with their competitive landscape, all that eats away at most of your profit on that first project. I mean, think about it, right? It's. I mean, unless we're talking about a massive project, be honest with yourself. There's a lot of learning. That on ramp takes some effort, it takes some energy. So that's not where you're going to make your money. The real money is in the next Two phases of the relationship life cycle. And that is additional business and referral business. So and by referral, I mean both external and internal referrals. In the case of an organization that has multiple divisions, multiple people, for example, in their marketing department or whatever, okay, that's really when things start to pay off in a big, big way. And by the way, when I say that the real money is there, I'm talking about, I mean significant. I'm talking about 80%, 90% or even more. The total profit you'll earn from that client is down the line. It's not in that initial project. Landing a 2nd, 3rd, 5th, 10th project. That's what's going to make that client truly profitable for you. That's when both your efficiency and your effectiveness truly skyrockets. And that's when not only can you propel your internal hourly rate to a whole new level with that client, but also become an invaluable resource for the client. So it actually works both ways. Not only does this client, you're becoming very efficient doing the work for them, but you're also doing a better job with that work. And now the client feels like, oh my gosh, you know, like we've invested a lot here in, you know, this writer, this professional. Like, we definitely can't let them go. Like they've become too valuable for us. So it's a great place to be in. So the mess. And now the client feels like, oh my gosh, you know, like we've invested a lot here in, you know, this writer, this professional. Like we definitely can't let them go. Sit here is simple. First, let's pull back a little bit. Just starting with, oh, they've become too valuable for us, so it's a great place to be in. So the mess. I started this conversation a few minutes ago. You gotta look at your clients and evaluate, make decisions a little bit more holistically. And don't just look at the profitability on this current project. Don't just look at emotional factors. I suggest that you get into the habit of conducting an internal review of all your clients at least twice a year. At the end of June or beginning of July, at the end of the year. Those are great times to do it. If you do a quarterly, even better. But at least mid year and at the end of the year. And you want to measure all your clients, not just the ones that are giving you heartache. Measure all your clients in different ways. You want to look at profitability versus hassle factor. We talked about that one with the client quality matrix. We also talked about the strategic value of a client. You can create a very simple scorecard. I'll talk about that in a minute. Where you can look at a number of factors beyond just the profitability. Again, you know, are you growing here? Is this giving you added prestige and so forth. And then you want to compare those two factors, the strategic value of a client versus the hassle factor. So you can create yourself another four quadrant matrix on those two variables. So one we talked about earlier, profitability versus hassle factor, that gives you four quadrants. Another one is the strategic value of the client versus the hassle factor. Okay. With these matrices, I like to use competing variables. So, meaning, you know, usually one about money and usually one about some sort of cost. Okay. And so you can probably come up with several different variables that resonate with you, but those tend to be some really good ones to start with. And then once you evaluate each client, use the results of that effort to make smart decisions. So, for instance, let's go back to that client quality matrix, low hassle and low pay clients, which is the one that this coaching client basically came to me for. Well, what are your options there? Well, you could raise fees, you can offer other services, you can bundle. Okay, those are some options. You probably can think of some other ideas. You could let them go if you wanted to. So, you know, kind of look at each quadrant and ask yourself, okay, what are my options here? What should I do? Let's look at the other quadrants. Low hassle, high pay. Well, man, that's the one you want, right? You want to keep those and you want to try to go deeper into that organization. Look for internal referrals, offer ideas, bring ideas to the table, show them other ways you can help them. Let's look at another one, high hassle, low pay, which is the one that this coaching client basically came to me for. Well, what are your options there? Well, you could raise fees, you can offer other services, you can bundle. Okay, those are some options. You probably can think of some other ideas or you could let them go if you wanted to. So, you know, well, that one's pretty straightforward, right? You want to let go of those people. Those are not the ones. You want to kind of look at each quadrant and ask yourself, okay, what are my options here? What should I do? Let's look at keep. If you're purging, that's going to be the first place to purge. And then high hassle, high pay. This one's an interesting one, right? Because, man, they're high hassle, but they pay really, really well. Well, some options here could be look, find ways to improve, maybe the workflow. Find ways to set and uphold better boundaries with that client. Find ways to improve the communication. So identify what the problems are and then find ways to make those problems either go away or to maybe make them less of a factor. You could let them go. That's another option. There's lots of options for each of these quadrants, but those tend to be the things that I look at first. So that's the first thing. Get into the habit of conducting the other quadrants. Low hassle, high pay. Well man, that's the one you want, right? You want to keep those and you want to try to go deeper into that organization. Look for internal referrals, offer ideas, bring ideas to the table. Show them an internal review at least twice a year of all your clients. Measure them in different ways. Not not just think other ways you can help them. Let's look at another one. High hassle, low pay. Second, just to reiterate, when you bring in a new client, start thinking beyond the first sale. Look for clients that seem to have a great deal of opportunity. So they have lots of things you could help them with, not just what they came to you for initially. Remember that the real profits are down the line, not with the first project or two. And look for clients that can give you a value multiplier, meaning their value to you goes far beyond the actual income you're generating from them. So they can give you valuable product. Well, that one's pretty straightforward, right? You want to let go of those people. Those are not the ones you want to projects and experiences. They can give you added prestige, maybe valuable connections, you know, sometimes like, wow, these people that I'd be working with, these are very well connected, high profile people. If I can develop a relationship with them and show them my value, this could be pretty incredible opportunities. If you're purging, that's going to be the first place to purge. And then high hassle, high pay. This one's an interesting one, right? Because man, they're high hassle. But lots come from that loyal contacts who move around and take you with them. So here's a. They pay really, really well. Well, some options here could be. Look, find ways great. When I think many of us have experienced something like this, which is, hey, I got a client right now. This is the third place she hires me in. She moves around about every two years and everywhere she goes after she's been there for a Couple of months, she contacts me and says, hey, I need your help here. That's someone I want to stick around with. Right. So that could be a factor. Work predictability. That's to improve maybe the workflow. Find ways to set and uphold better boundaries with that client. Find ways to improve the communication. So identify what the problems are and then find ways to make another variable to measure someone who, you know, maybe the work doesn't pay as well as some of your other clients, but maybe it's very steady and you like that easy work or work that lends itself to outsourcing, maybe repetitive work or work that you've been able to kind of templatize. It's very formulaic. Those problems either go away or to maybe make them less of A and figure out a way to kind of systemize the whole thing. And if you can do that, it might be worth bringing in or a junior writer that you can train to do the bulk of the work. At least give you an ugly first draft, for example. So lots of different options to. Again, we're talking factor. You could let them go. That's another option. There's lots of options for each of these quadrants. But about looking for clients that can give you a value multiplier that can be worth much more than just that initial project. And again, I recommend those tend to be the things that I look at first. So that's the first thing. Get into the habit of conducting an internal review at least twice a year of all your clients. Measure them in different ways, not just ink. Evaluating clients at least twice a year on these factors, I would create a simple scorecard that lists each of these variables. Whichever ones you like, whichever one you think matter to you. And rate each client on each of those value areas so you can do what however you want. Scale of 1 to 10, scale of 1 to 5. Give them, you know, A, B, C, D. Second, just to reiterate, when you bring in a new client, start F grades, whatever, but you want to keep a record of these. So especially with clients who stick with you, you want to see how they're progressing. So keep a record. And the first time you do it, develop some sort of baseline. So where are you today? Think of today as your baseline. And then track how each client is doing against that baseline, how they're trending and how new clients, how they compare to your baseline and your current score for all clients. So that's it for today. I hope you're thinking beyond the first sale. Look for clients that seem to have a great deal of opportunity. So they have lots of things you could help them with, not just what they came to you for initially. Remember that the real profits are down the line, not with the first project or two. If you found these ideas helpful, I just want to give you a different way to think about this stuff. If you did find this material helpful, I have a quick favor to ask. Please consider giving me a star rating and a quick review in whatever platform you use to listen to podcasts and look for clients that can give you a value multiplier, meaning their value. So my podcast is now over nine years old and has grown almost exclusively through word of mouth. I shouldn't say almost exclusively. The majority of the growth has been through word of mouth. But I find that ratings and reviews, those things do help expose it to other writers who may have never heard about the show otherwise. So I'd love it if you took just 30 seconds and just gave me a star rating. Write a quick review, an Apple podcast, or again, whatever platform you use. That would mean the world to me. So thank you for listening and I will talk with you. Value two goes far beyond the actual income you're generating from them. So they can give you valuable projects and experiences. They can give you added prestige, maybe valuable Connect next time. Well, that's it for today. I hope you enjoyed the episode. And just a quick reminder to grab your free copy of my latest book, Earn More in Less Time. The Proven Mindset, Strategies and Actions to Prosper as a Freelance writer. You can get your free copy@b2b launcher.com or you will also find the detailed show notes to this and all my other actions. You know, sometimes like wow, these people that I'd be working with. These are very well served. Enjoy and have a great day. Connected high profile people. If I, you know, can develop a relationship with them and show them my value, this could be pretty incredible opportunities. Lots, lots that could come from that. Loyal contacts who move around and take you with them. So here's a great one. I think many of us have experienced something like this, which is, hey, I got a client right now. This is the third place she hires me in. She moves around about every two years and everywhere she goes after she's been there for a couple of months, she contacts me and says, hey, I need your help here. That's someone I want to stick around with, right? So that could be a factor. Work predictability, that's another variable to measure someone who, you know, maybe the work doesn't pay as well as some of your other clients, but maybe it's very steady and you like that easy work or work that lends itself to outsourcing, maybe repetitive work or work that you've been able to kind of templatize. It's very formulaic. You can figure out a way to kind of systemize the whole thing. And if you can do that, it might be worth bringing in or a junior writer that you can train to do the bulk of the work. At least give you an ugly first draft, for example, so lots of different options to Again, we're talking about looking for clients that can give you a value multiplier that can be worth much more than just that initial project. And again, I recommend evaluating clients at least twice a year on these factors. I would create a simple scorecard that lists each of these variables, whichever ones you like, whichever one you think matter to you, and rate each client on each of those value areas so you can do what however you want. Scale of 1 to 10, scale of 1 to 5. Give them a, B, C, D.