3 Ways You're Losing Clients

I've been an IT consultant for more than a decade and I've learned a thing or two about client retention. I also teach a college consulting class. 
The book I use for the class is excellent in theory but, as with many self help books, it lacks a lot of real world experience. 
When I teach I like to give examples of how the principles of the book I'm using relate to my own experiences. 
Here are three real world reasons why your clients are flying the coop, and more importantly, here's how to keep the ones you want.

Principle #1

You didn't communicate- It's a great principle, but it doesn't tell the real story. The fact is that every client is as different as your kids or pets are from each other. You can't put the communication principle in a box with a set amount for each client. If you don't communicate enough, you lose them. If you communicate too much, they get irritated and you lose them.
Even if you communicate the correct amount of times, but you provide them with the wrong information, you lose them.
How many of us have actually asked "What would you like communicated, and how often would you like me to check in?"
Now don't be surprised if they stammer and don't have an answer right away. They may have never had this asked of them before. Give them some time to consider it and get back to you.

Real World Example for Principle #1

In IT consulting we have server outages. Either it's bad manufacturing, the server may be too old, the software is full bugs, or it could have been something malicious. The result is the same. In the early days of consulting, I would work on the problem until it would be resolved. Then I would let them know its fixed and what the issue was. Sometimes this could be hours or even the next day. Many times they would be purple in the face by the time I got back to them because, in their eyes, it was like waiting to hear from the doctor if the surgery was successful. These servers and PCs are their business and they're dead in the water without them. I found when I posed the questions of how often and what type of information they wanted, I would get a different answer from every customer. By abiding on their terms I would retain the client regardless of the issue that caused it as long as the outcome was the server was once again running with all of their data. I started using this same principle on other types of communication even when there wasn't an emergency, and the clients really responded positively to it.

Principle #2

You didn't notice they changed. It's interesting to see people over a decade. People and businesses seem to have personalities that are not as static as you might think. Many times the business was taken over by a new manager with a slightly different view. We've all seen the chart that shows how you can be off by one degree, and over time that makes a big difference. Sometimes, a new manager or a new business focus can cause that separation to become a chasm over just a few years and you may not have noticed. Not paying attention can be enough for clients to have closed door meetings without you where they find a new firm. You may no longer align with their vision. The thing is, you could have adjusted with them had you noticed. The fix here is to not take your A list clients for granted. Have a quick annual meeting just to see how you and your staff are doing. If there is a shift, it will be eye opening. Also, don't be afraid to make yourself available for their social events, and let them know you will be happy to sit in on project planning meetings if they wouldn't mind. Either be a part of the conversation in person, or be the subject of the conversation while away. Have written goals and budgets that can be reviewed by C levels and managers from the company. When possible, be a part of the company as though you were an employee, a friend, and a close relative.


Real World Example for Principle #2

I have several A list clients that either I, or my staff, go to for Christmas parties, announcement events, staff meetings, and even their kid's birthday parties. For the companies I really want to keep going because I enjoy their company and their business, there is little I wouldn't do to keep them not only happy but also keep them feeling like life would be hard without me or my services. We all have B and C list clients that help pay the bills, but we don't want or need to be quite as involved. It's okay to categorize clients in this fashion. You only have so much time to spread around. You can't be there for everyone, and neither can your employees. Consider even telling these fringe clients about your inability to spend as much time as you would like, or even consider breaking up with them. You want to retain an excellent reputation in the end. By being up front with expectations of what you can do for them, it will keep that intact.

Principle #3

They are not the right client for your company. Clients that tend to make the most noise and cause the most amount of work bring in the least amount of money. It's hard sometimes to admit it, but they just aren't the right customer for you. When a business is new, its difficult to say you can afford to reject some customers. You want to take in every dollar you can, but this can end up causing so much distress you may want to close up shop rather than deal with them. How do you know they aren't the right customer for you? Think back when you decided to go into business. It was a risk, and you likely risked funds you weren't sure you could afford to lose. Why did you do this? You put your family, home, and everything at risk for one thing: happiness. If some of those clients are causing you to have the opposite affect, you will betray the excited entrepreneur you once were by keeping them. Don't let fear ruin the excited kid in you.


Real World Example for Principle #3

At one time I had twice the employees I have now, and I was miserable. I decided to accept high volume, but low profit help desk calls for another company. To take on low profit clients means you have to take on employees that have less training and potential. Instead of college graduates with a great resume, we ended up hiring warm bodies we felt we could train. It was a disaster. I had calls every week from clients who felt they didn't get the service they deserved, and they were right. I even had a whiteboard posted on how many days between complaints like a construction crew would have days between accidents. We never got very far. The employees weren't right because the clients weren't right. It wasn't the clients fault. It was mine for taking this on and keeping it going even though it made me and the rest of the staff miserable. Two years later we worked our way out of that situation. We now have a leaner company that, strangely enough, makes even more profit than we did at twice our staff size. I no longer slam doors or yell at people either. I was also able to bring back the highly qualified staff I always wanted and the client satisfaction is once again where it should be.

I also found that I could survey the surroundings of a client to decide before I take them on if they're right for us. In our business, I have found if a client doesn't have at least one server they likely will not spend the money in the long run to be profitable. We had a client like this not too long ago. They were very nice people but they also had no server and they bought used equipment. I couldn't afford to assign them to a dedicated staff member. This means that when they had an issue I would send whoever wasn't busy. The client never developed a relationship with anyone in the company and they felt like the red headed step child. It just wasn't a good fit and we parted ways. I won't make that mistake again as I now know a minimum a potential client needs to have in order for me to take them on as a new client.

I hope you take these real world examples to heart on how it is we lose customers so you will know what kinds of customers to accept, and how to keep them happy. It's easy to take on everyone and be everything to everyone in theory, but in practice you lose who you are and your clients will find a way to lose your number.