The Client Audit: Who to Keep, Who to Grow, and Who to Cut

There is a client on your roster right now that you are quietly losing money on, and I'd bet it's not the one you'd guess. It's not your cheapest client, and it's not your most demanding one. It's a very specific combination of the two that wrecks your margin without ever showing up on an invoice. In this episode I'm handing you the ten-minute exercise I use to grade an entire client list and see exactly who deserves more of you and who has been costing you more than they pay. Grab a pen. We're going to find the one group you need to let go of before the next quarter starts.

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Transcript

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Some of your worst clients are hiding in plain sight. They're not the ones who pay you the most. They're not even the ones who pay you the least. They're the ones quietly draining your time, your energy, your margin. And most business owners keep them around for way too long. Last week I told you to charge an annoying client more before you fire them. This week is how you figure out who that advice is actually for and who's beyond saving. In this episode, I'm walking you through the exact quadrant I use to audit a client list where every client gets plotted on two things how much they actually pay you and how much you enjoy working with them. By the end, you'll know which clients to protect, which ones to grow, which ones to raise your rates on, and the group you need to let go of this quarter, no exceptions. If you've ever walked away from a call feeling resentful and broke at the same time, this one's for you. Last week on the show, I made a case that I think caught a few of you off guard. I said that if a client's getting on your nerves, the move usually isn't to fire them, it's to charge them correctly. A lot of people are ready to walk away from clients that aren't bad at all. They're just underpriced. And the right number can turn an annoyance back into someone you actually like working with again. If you missed this one, go back and listen to it after this because today builds right on top of it. Here's the question that that episode leaves you with. Okay, some people I should be charging more instead of hiring. Fine, but which ones? How do I tell which client needs a bigger invoice versus the one that genuinely needs to go? And this is exactly what I want to answer today. So I want you to do something a little bit uncomfortable with me. I want you to pull up your full client list. And my best practice is to do this quarterly. I want you to take your full client list, everybody who is currently paying you. And I want you to take a real look at it. This requires you to remove the lens of scarcity and saying, oh my gosh, everybody is going to leave. I'm never going to have another good client again. And it requires you to look at this as a business owner, somebody who is trying to scale and grow this thing as a true CEO, not a freelancer, not somebody who just got lucky. I want you to do this because I learned this running and eventually selling my agency loss in house. Your client list is not a trophy case. It's a portfolio, a portfolio business, just like any other portfolio. And some of it's working for you, and some of it is quietly draining you of money, of energy, and the will to keep showing up. The problem is that most business owners never actually audit this list. They keep saying yes, they keep renewing, they keep absorbing until one day they look up and realize they've built a business they don't even like. That's why today we're going through the client quadrant. It takes a piece of paper and 10 minutes. Here's how it works. Draw a big plus sign on the page. So you've got four boxes. The left to right line, or the horizontal one, is about money. On the left side, we're going to put the clients that don't pay you very much. On the right side, we're going to put clients that pay you a lot. Super simple. Now, the up and down line, the vertical one, is how you feel. At the top, clients you genuinely love working with. The ones who respect your time, trust your expertise, pay you on time, make you better at your job. On the bottom are the difficult ones. The ones who nickel and dime you are rude in their emails, who blow up your weekend, who make you dread the calendar invite. I'm just going to call that group mean because you know exactly who they are. Now I want you to take every client and drop them into one of four boxes. Top right is your dream zone. These are the people you love, but who also pay you well. They're your A list. And what I want you to do with them, there's nothing scary. I just want you to protect them, over-deliver a little, and then study them because this box is your business plan. These clients tell you who you should be going out and finding more of. When you start running a sales blitz and you're going and asking your favorite clients for referrals, this is the group of people you start with. You go to this quadrant first and you say, Hey, who do you know? I want more people like you. Most business owners spend so much less time thinking about this quadrant and so much more time thinking about all of the others. Make sure that you're spending the majority of your time with your highest paying, most lovable clients. The top left box gets a little emotional. These are the clients that you love, but they don't pay you very much. The fun ones, the friends, the early believers who took a chance on you and your rates were teeny tiny. I have so much affection for this box, and it's exactly why it's dangerous. Love is not a pricing strategy. So here's the move: you either raise their rates to match the value you're delivering now, or you decide consciously and on purpose to keep one or two of them at a discount because they bring you joy or referrals or a great testimonial. The key word there is consciously. A discount you choose is a gift. A discount you didn't choose is a leak. Then I want you to take the rest of them and truly decide if it's best for them to go somewhere else so that you can make room for them if they can't, if they truly can't afford your services. The bottom right is a tricky one. These are clients who pay you really well, but they're a pain to work with, the mean ones with big budgets. I'm not going to tell you to fire them tomorrow because money is real and it might be funding your whole operation right now, been there. But I am going to tell you to put a price on the pain, raise your rates on them specifically, set hard boundaries on response times and on scope. Make the relationship cost them more so it costs you less. If you listened to last week, this is the same idea, just aimed at people who can clearly afford it. Quietly start replacing the revenue with top right clients. So the day that you decide to let them go, it doesn't take your business down with it. And then there's the bottom left. The clients who don't pay you very much and are also mean, the early adopters who drove you crazy from day one. I want you to look really hard at this box because it's the whole reason I'm doing this episode. Last week we talked about giving clients a chance to pay you more so that they can stay on your roster so that you don't fire them. And that's exactly what needs to happen with this box. You need to go to these clients and say, hey, we need to raise our rates. We're getting back on track here. We need to, we've done so much more to improve as an agency, whatever, however, you want to word that, right? You need to tell them in blunt terms, you need to pay us more or we're out of here. Reason being, you need to walk away from these people already. They are costing you time and money and they're taking you away from your top right clients. In fact, they're endangering the top right clients because you're most likely having to spend a lot of time and money on these bottom left clients. Put a fair, reasonable number in front of them and the people who won't pay what the work is worth and treat you badly on top of it. These are the people who have to go. Here's why this is the part that most people miss. When you think about what a client actually costs you, it's never just the hours. It's the emotional labor, it's the dread before the call, it's the three extra revisions, it's the Sunday night you spent rewriting an email so it would sound nice, the recovery time after they've ruined an afternoon. A difficult client costs you the exact same emotional energy, whether they're paying you $10,000 or $500. So when you've got somebody who's draining all of that out of you and you're barely getting paid for it, again, bottom left-hand clients, your real margin on that client isn't thin, it's negative. You're paying for the privilege of being treated badly. Cutting that bottom left-hand box is the single fastest way I know to make a service business feel better almost overnight. You free up your time, you free up your energy, you free up your calendar space to go find more top right clients. It's not mean to let them go, it's math. And again, we're still gonna give them a chance to move into that right hand. They're still gonna be on the bottom. We still don't love them, but they're gonna move into that right hand bottom quadrant. We want to try to get them to see, hey, maybe if they pay a little bit more, I won't be so annoyed again, unless they're toxic. Make sure you listen to last week. I do have a caveat for that. But we want to see if we can get them to pay more. If they're not willing to pay more and their boundary is no, I want to be able to treat you badly and not pay you a lot, then it's time to let them go. So here's your homework. And I really do mean do it. Pull up the list, draw the quadrant, put every name in a box, and then take your bottom left-hand clients and make a plan to either charge them more or to let them go this quarter, not someday, this quarter, offboard them kindly, refer them somewhere else, or charge them more. If you are struggling with this and you're sitting here going, Susie, I don't know where everybody should go. It just depends on my mood. Here's what I want you to do. Here's my bonus piece of advice. Go find the person that you live with. If you live with a roommate, if you live with a spouse, wherever, whoever you're living with, whoever you eat dinner with on a regular basis, and go say, Hey, I'm mapping out all my clients. Where do you think all of them should go in all these different categories? I promise you, your husband or wife or roommate, girlfriend or boyfriend has an opinion on where these clients should go. They listen to you complain about them, they listen to you talk about them, and they will have a pretty good understanding of, oh, you put them in the top right, you can't stand them, you talk about them all the time. It's a really good reality check for where everybody should go. And that is really good feedback for your business. Getting rid of clients that are unkind, that don't pay you a lot, gives you room to go make more money working with people who respect you and really value the work you do well. I say this all the time. I had a sticky note on my desk for years that said, if I have more time, I'll make more money. And I believe that's true for you too. Stop letting these clients rob you of your time that you can use to go take your business to the next level. And if you're not sure what to do at that time, or you don't know how to get rid of these clients or charge them more, I would love to chat with you and strategize a plan and review your quadrant with you. Go ahead and schedule a call at susiecoli.com. Love to work with you. Thanks for listening. Until next time, sell well.