How to Maximise Goodwill when losing a client – Risk Management

business_handshakeSome business relationships that start with a bang end not only with a whimper, but can also sometimes prove to be both harmful and expensive.

Here we look at Risk Management strategies on how to preserve goodwill when the relationship has come to an end.


The reasons for customer/supplier relationships coming to an end can be many and varied, including:

  • The client is in financial difficulty
  • The client is no longer financially viable
  • The client is too demanding
  • You are unhappy about the risk of continuing to service this client
  • The client has found an alternative supplier
  • The client wants a service or product that you can’t provide


There are two major areas to manage and protect to ensure that you receive maximum benefit from the relationship even though it is coming to an end:


Financial Recovery

Ensuring that you as a supplier get paid is obviously paramount in the shorter term.  Managing the ending of the relationship is of vital importance here and this leads on to the second area:


Preservation of Goodwill

When you first started supplying the client there will have been a great deal goodwill and support between the parties. This was invaluable as it had the potential to create other opportunities for you as a supplier when introduced by your satisfied customer.

I believe that much more can be done to protect this goodwill when a relationship is threatened or is coming to an end by adopting the following methodology:


 1. Meet with the client or customer to determine their desired outcome

This is often best done with a third party who has not been involved in the trading relationship and is able to empathise with, and be supportive of, both sides.  From our experience of these situations if the meeting is between the two parties that have previously been working together, but now agreed to part or have fallen out, this can deteriorate into a slanging match that actually makes the situation worse.

 2. Agree a structured exit/parting that works for both parties

At this meeting the reasons for the parting should be openly and sensitively discussed.  Whilst this may not to resolve the situation, as by this time one or both parties have determined that this is the end of the road, it has the potential to do so, and this would obviously be a very good outcome.  If, as is more likely, it is confirmed that the relationship is at an end, then you can hopefully confirm the particular issues and agree a suitable parting of the ways on the best terms possible.

3.Continue to be supportive

Once the issues have been defined, and you have agreed that the relationship is coming to an end, it is possible to agree a route forward that is mutually supportive.  This can be incredibly valuable.  It may be that this takes the form of continued service support for a period of time, a continued referral source for other business contacts or even assistance in the evaluation of other suppliers! It could also be in the form of an agreement by the customer to settle the outstanding balance within an agreed time or even, dare I say it, a settlement discount to preserve the goodwill.

If appropriate you could draft a press release confirming the parting of the ways (possibly giving the reasons) and wishing each other well in the future.  Remember the Grass is often Greener on the other side and if you part on good terms you do leave the door open for the customer to come back at some stage in the future.

4. Stay in contact

If you can get to this stage, and agree the parting in a constructive way, preserving as much goodwill as possible, it is vital that you keep in contact.  This can be anything from a personal email every six months, to a phone call once a quarter or simply sending relevant industry data and information.

5. Remember the preservation of Goodwill works both ways  

In today’s world of Social Media we are all very well aware of the upsides of getting this right, but probably more importantly the potentially highly damaging impact when you, maybe unwittingly, fall foul of another party.  We all should be desperate to preserve this Goodwill at every turn.

This preservation of Goodwill works for customers as well as suppliers.


Finally, when you get to a position that clients leaving are speaking positively about their experiences of working with you, this will have a very positive effect on your Brand Value which will both increase client retention and make it easier to acquire new clients. 


If you have any comments on this article or would like to discuss any aspect of it please contact me at or on 0845 689 8750.

John Thompson is Managing Director and founder of Trans Capital Associates

Client retention eguide


Image by: Zach Frailey