What do you do with clients who started with you years ago, when your fees were much lower?
Do you keep them or let them go? And how do you decide?
One of my coaching clients recently faced this dilemma. She was writing blog posts for an acquaintance for almost four years—at about half her current rate.
She hadn’t bothered to increase the rate because the work was infrequent, she felt loyal to the client (they had helped each other out a lot in the beginning), and she didn’t mind the work.
She felt that the time had come to make a change. She wondered if she should offer to continue doing the work—but at her current rate—or simply let them go.
Deciding whether to let go of a client or not is never an easy decision. It’s emotionally charged, because you’ve developed a relationship over the years.
In this podcast episode, I share the decision-making criteria I gave my coaching client to help her make an objective, strategic choice.
The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe on Apple Podcasts, Spotify, Stitcher, Google Podcasts, Amazon Music or wherever you listen to podcasts.
The Client Quality Matrix
When the work is easy, and you like the client, keeping a low paying client onboard doesn’t seem like a burden.
But those aren’t great reasons to keep a client. We need to be strategic, which means applying objective criteria.
First, ask yourself where they fit in the Client Quality Matrix:
- Low hassle, low pay
- Low hassle, high pay
- High hassle, low pay
- High hassle, high pay
You want most of your clients to fit in the 2nd category: low hassle, high pay.
If they’re currently low hassle, low pay, you can keep them for now but raise your fees.
You could also offer to help with other things (e.g., strategy, planning, brainstorming) that will generate new ideas for them AND lead to more work for you.
Or you can change the way you price your services. For instance, you can move to a bundling model that incorporates other services you’re not currently offering that client.
Consider Strategic Value
Another factor to consider is the strategic value of that client. Their value might lie in things beyond direct revenue, such as:
- Quality referrals
- Prestige
- Name recognition or improved credibility
- Ability to learn and practice new types of work
And so on.
Consider the Long-Term Value
It’s also helpful to look at the value of a client over the longer time.
Too often, we value clients by the initial project. But the real value is NOT in that initial project. Almost always, the fixed costs of onboarding, research and getting familiar with the client’s business, customers and competitive landscape eat away at most of your profit on that first project.
The real money is in the next two phases of the relationship lifecycle: additional business and referral business.
Landing a second, fifth and tenth project is what makes that client truly profitable for you. That’s when efficiency and effectiveness skyrockets. It’s when you can not only propel your internal hourly rate but also become an invaluable resource for the client.
Review Your Clients Twice a Year
It’s always a great idea to conduct an internal review of all your clients at least twice a year.
Measure them on different factors:
- Profitability vs. hassle
- Strategic value (create a scorecard)
- Strategic value vs. hassle
Then use the results of these reviews to make smart decisions. For example:
- Low hassle, low pay à Raise fees, offer other services, bundling
- Low hassle, high pay à Keep + go deeper
- High hassle, low pay à Let go
- High hassle, high pay à Find ways to improve workflow & boundaries
Look for Value Multipliers
Also, look for clients that can give you a “value multiplier”—meaning their value to you goes beyond the actual income you’re generating from them.
For example:
- Valuable projects and experiences
- Prestige
- Valuable connections
- Loyal contacts who move around and take you with them
- Work predictability
- Easy work or work that lends itself to outsourcing
Here again, I recommend evaluating all clients at least twice a year.
Create a simple scorecard that lists these or other variables and use them to rate your clients.
Develop a baseline and track how each client is doing against that baseline. See which way they’re trending.
When you put all these pieces in place, the decision of how to move forward (or whether to move forward) with each of your clients will become pretty obvious.
By the way… whenever you’re ready, here are 3 ways I can help you grow your freelance business:
1. Grab a free copy of my book.
It’s called Earn More in Less Time: The Proven Mindset, Strategies and Actions to Prosper as a Freelance Writer. The title says it all. 😉 — Click Here
2. Join my implementation program and be a case study.
I’m putting together a new implementation group this month. If you’re earning $5k+/month (or the part-time equivalent) from your freelance business … and you’d like to grow your income quickly with better clients … just email me at ed@b2blauncher.com
3. Work with me privately.
If you’re a 6-figure writer who’s trying to earn more in less time, with less stress, I might be able to help you get there faster than you think. Just email me at ed@b2blauncher.com and put “Breakthrough” in the subject line, and I’ll get back to you with more details.
