I can’t really think of any time when it’s a good idea to lose and client to somebody else. in fact, the only instance is when the probability of bad debt is so high that you risk margin isn’t covered on a massive level. That is a very unique, landscape changing perspective in M&A and it’s generally assumed that those negotiations come about as a result of competition, rather than complacency.
However, there are times when a business should be prepared to relinquish business in order to retain the most of doing business and avoidance of competition. In this example, holidays become very useful, especially if they are celebrated en masse.
Holidays aside, sales tactics require that you select customers that are suitable fro your business; hence marketing, which is, in no small terms, more important than advertising when considering who to find, not how to find them. In this case, a huge red flag for bad tactics would be to constantly pursue new customers at a loss to the business. If the business is losing money in marketing, then it would stand to reason that there is something wrong. But, if a company is losing money in developing some sort of new product, or some kind, that might be of a benefit to other consumers, you can be sure that an uptick in pursuing customers is necessary. So, logically, in times of bad business, businesses should be ready to pass on certain perspective clients if they can not afford them, to avoid becoming too risky and losing their business altogether.
That said, i never pass on a Client.

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