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The Rough Notes Company Inc.



April 28
12:15 2021

Determining client ROI includes being mindful of business you’re missing out on because you won’t get rid of the devil you know. How do you know it’s time to let a client go?


Bad clients exist, and sometimes they just need to be let go

By Michael Wayne

My insurance career has made me privy to many truths. Here are three of them: Good and bad producers exist. Good and bad account managers exist. Good and bad clients exist—and sometimes bad clients need to be fired.

Facing the prospect of a hard market and having to fend off the competition like the jackals that they are, the thought of willingly jettisoning a client may sound absurd and counterintuitive. The reason it does is because we are trained to accumulate. Our nature, by and large, is not to let go.

[T]he thought of willingly jettisoning a client may sound absurd and counterintuitive. … Our nature, by and large, is not to let go.

A few months ago, a fellow agent was in the office with me—socially distanced of course—going on about a client. This was a client he had fought hard to win about 15 years ago when he was first starting out. At that time, the client was a more-than-modest account, and it has steadily grown with my colleague’s input playing a major part in two particular instances. Today, the client is not his largest account—far from it—but it’s difficult to tell based on the way he is constant at their beck and call.

The latest incident that occurred? The client held this agent hostage.

In short, the client called my colleague and told him another broker had quoted them less for a specific aspect of their organization. The client wanted an immediate review of all policies to see where there was money to be saved. Initially, my colleague responded that he would take a look and respond by noon the next day. The client pitched a fit, threatened to leave if he didn’t have answers by that afternoon, and my colleague capitulated. To do so, he had to cancel a meeting he had finally gotten with a prospect after months of trying to secure it.

When I suggested to my colleague that he should have let the client walk, he looked at me like I was overdosing on crazy pills, had offered him some, and then suggested we both become panhandlers to earn a living. I understood his reaction, but I turned it into a broader conversation. Ultimately, I shared with him the five ways I know when it’s time to fire a client.

  1. The feeling of impending doom. When the client’s number pops up on your phone or you see an email appear in your inbox from them, what is your initial thought? When you have a regularly scheduled meeting approaching, does your stomach churn? Are you literally losing sleep and the desire to actively work on the account? If so, they may no longer be worthy of your time or energy.
  2. What you do is never good enough. You do tremendous work for the client without fail. Your expertise or the expertise of someone you have brought along from a loss control perspective, for example, has saved the client money or even potentially an employee’s life. Yet, the client perpetually complains, is temperamental, or challenges you about everything. It’s likely time to cut bait.
  3. They disappear when the check is due … and even afterwards. When it comes to clients who habitually fail to pay on time or those you have to devote time to serving as a mini-collection agency, it’s time to part ways. Diverting time from prospecting, from serving more respectful clients, or devoting the energy of your account manager to this repetitive cycle is a waste of time.
  4. Time after time, they need an alarm clock. Speaking of a waste of time … How many times have you had a meeting scheduled with the client where they were late? How many times have they rescheduled? How many times have they simply cancelled with little or no warning whatsoever? Your time and the time of the colleagues who are devoted to meeting your client’s needs are non-renewable resources. If the client cannot understand that after being repeatedly informed, they can no longer be your client.
  5. They have insulted or disrespected members of your team. Certainly as a producer your skin isn’t thin. It’s likely that there are some client idiosyncrasies that you are willing to put up with to make a living. No one in this industry would fault you for doing so. When it comes to flat out disrespect of your team, however, you need to draw a line and take a stand. No client is worth losing the team members you rely on to serve the needs of all of your clients. Who is going to work for you if it is known you don’t have your employees’ backs?

At some point, you have to understand the ROI of each client. Part of configuring that equation is being mindful of the great business that you could be missing out on because you are too fearful to let go of the devil that you know. Ours is an industry of collaboration. You have to be able to see what collaborations are going to yield your best book of business. Cutting the ones that won’t can be difficult in the short run but ultimately a major key to your continued success.

The author

Michael Wayne is an insurance freelance writer.

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