What Are Your ‘Bad Clients’ COSTING You?

Running a successful business doesn’t just rely on your ability to win new work and clients. It relies on dropping bad clients too.

Letting go of work may sound counter intuitive, but it is so often a fundamental key to a business’ success.

You wouldn’t believe how many customers we’ve seen running temp desks at a loss. Maybe your margins keep shrinking, or you’re still holding on to legacy clients you haven’t had the courage to drop. So ask yourself—are you ready to walk away from a client if it no longer makes business sense?

Understanding your boundaries are vital and acknowledging that you have boundaries is the first step!

But what is working with the wrong clients actually going to cost you?

Customer Service

The time, energy, and effort you invest directly shape the quality of service your customers receive.

We have all experienced the phenomena of the ‘nightmare client’ who vies continually for your attention by shouting the loudest.

When you spend a disproportionate amount of time managing a problem client, you limit your ability to serve your other clients effectively. It’s a simple equation—and a serious issue.

At Quba we have to continually check ourselves. In fact we have had to make the difficult [but vital] business decisions to drop certain clients over the years in order to maximise our customer service across the board.

Your recruitment desk is no different. How much of your time is being soaked up by the ‘nightmare client’? How prepared are you to drop them? Being able to let go is the necessary skill that facilitates the freedom to choose.

It is your job to continually be choosing the clients you work with as much as you expect your clients to continually choose to work with you.

Profitability

It’s clear how customer service can be affected by the inability to let go of certain clients. But what about profitability?

As an agency or independent freelance recruiter, you need to be constantly asking yourself – Where is your value? Where is your ROI?

We see agencies all the time working with end clients that just don’t make any money. That’s even before the effort, the commission, the factoring fees are all taken into account.

Check whether you are making a loss. You need to stay alert—not just at the start of the relationship or initial placement, but continuously, especially as margins tighten. In freelance recruitment, recruiters often lose focus and chase the next placement, getting swept up in the pressure to “get another temp out.” But if that temp is going to be soaking up your time and energy without making you a profit, your gross margin will be taking a hit. Just for the vanity metric of having another temp out!

Keep bringing everything back to your gross margins. Don’t work with clients if the profit is too low to justify the risk you are taking in investing your time and resources into the placement.

So many agencies don’t understand the metrics of how they make the cash.

Instead of continually looking to get another temp out, you could be focusing on increasing your margins and increasing the average hours your temps work – and be ready and willing to drop those clients who you are not making enough [or any] money from. Your time, energy, stress, resources require you to do so.

If you are interested in learning more about how to transfer your funding provisions and why Quba could be the right fit for you, drop us a line on 01305 231171 for a confidential chat or fill out our online contact form.

(Also, if you are interested in learning more about Ash walking away from meetings if people were 10 minutes late then ask us too – choosing your clients requires your dignity! :P)