Fired: What Can You Do Before a Client Leaves

This is the time of year we start thinking about next year’s marketing, which leads us to a discussion

 of how many clients will leave us in 2014.  You don’t have that conversation?  You never lose clients?

 

Benjamin Franklin told us that “The only things certain in life are death and taxes.”  It is obvious he didn’t work in our industry.  We can add loss of clients to life’s certainties. 

Client loss doesn’t have to be a disaster.  In many cases you can do something before it happens.
Clients don’t leave us simply because we performed below expectations or the project went south.  There are four reasons why clients leave a firm:

1. You performed excellent work but the client doesn’t have another project.  We call this client evaporation.

2.  You performed acceptable work but the client thought you stopped caring about them and fired you.  We call this client dissatisfaction.

3. You performed acceptable work, but a competitor came in and won the client’s business. We call this competitive disadvantage.

4. Your made mistakes, the project went over budget and promises weren’t kept, and the client fired you.  We call this client outrage.

It should be noted that only one of the reasons had to do with poor work or project delivery. There is nothing you can do about client evaporation except to stay in touch with that company for the time when it does have another project.  The amount of resources spent on that will depend upon what your marketing research tells you about the company.  However, there is nothing you can do to save the client who is at the stage of outrage.  There is not time for grieving.

Obviously, there are things that should have been done before it got to that point.  Some of those things were out of your control.  The contractor might have slipped on a tight schedule or tried to make up some lost profit by sending in a pile of change orders.  Your project team might have changed and the new people needed time to get up to speed.  Team and client chemistry might have been out of balance. You might have made promises early on that were shaky at best and you never went back to the client to explain the reality of the project. Or, worse, your project manager might have made promises you didn’t know about that weren’t kept. Broken trust is the result of allowing any of these things to get between you and your client.  You were in control of more than you thought.  Communication is the critical success factor. Do you understand disaster communications?

An airline ran a commercial a few years ago that opened with a CEO in a conference room with his sales team.  He tells the gathered employees,” The first client we sold when I started this firm fired us today. I have plane tickets for everyone here and we are going to personally visit every key client to make sure this doesn’t happen again.”

If you want to prevent reason 2, then you should do what the CEO in the commercial did.  Call it psychology 101, personal dynamics, or how to win friends, but the key to exceeding client expectations is letting them know how much you care.  Sometimes that is easier said than done.  This is especially true for the client that will evaporate next year.  Does management have a list?  The list of key clients along with staff assigned to maintain and build the relationship.  Does staff know what is expected and is there accountability?  Is it included in your marketing plan and part of performance reviews? Anything less than this means a valued client has a chance to fall through the cracks and into the hands of a competitor.

Starting with the premise that clients like you, how can competitors take clients from you?  It probably looks a lot like the way you take clients from your competitors.  We like to pull clients out of the cracks of our competitors. First, the client has to be open to change.  Are any of your existing clients open to change?  Perhaps the client is obligated to issue RFPs for all work.  Change, therefore, is part of the institution.  Yet, you have been their service provider on multiple projects.  Maybe it was because they trusted you to help write the RFP.  Although an RFP gives the impression of shopping around, we all know firms are often “wired” into projects.  You train your staff on quality projects, meeting delivery schedules, timely submittal of meeting minutes and other communications, including answering questions.  How much time do you spend on client service outside of the required project deliverables?

The amount of time spent on client service training is directly proportional to the number of clients lost to competitors in spite of your good work.

When it comes to servicing your client, it is good to remember this jungle saying:

Every morning when the sun comes up the lion knows he has to start running otherwise he will starve to death.

Every morning when the sun comes up the gazelle knows she has to start running otherwise she will get eaten by the lion.

Moral of the story: It doesn’t matter who you are, by the time the sun comes up you better be running.

The industry moral to this story is that without clients your firm will starve and your competitors are running not to be eaten by you.  Yet, you and your competitors play a dual role.  When your staff understands the daily importance of client service, your firm will do more eating than being eaten.  As we teach in our training programs, you also need to reassess the 80/20 rule when it comes to existing clients.  Since it costs at least 5 times as much to obtain a new client than keep an existing client, it makes economic sense to spend more on client retention.  How to do that is a question we can help you find the answer to.

In the meantime, get ready to fill your leaky bucket and develop a client-centric 2014 Marketing Plan.