8 reasons why you are losing customers and what to do about it (Part II)

By Andrew Sobel and Olivier Jacob

Sometimes customer relationships end for the right reasons. But you never want a good relationship to end in an avoidable way.  

In Part I of this article, I described four of the eight most common reasons why customer relationships end. They were: 

1. A reorganization or a change in leadership. 

2. A unique or temporary need for your services. 

3. A financial crisis or profit crunch - and a lack of budget for you. 

4. The impact and benefits of your work are not indisputable. 

Now, let's look at four more reasons why one of your best customers may just leave.  

5. Quality or delivery problems.  

This is a bigger problem in some markets than in others. The more moving parts to your solution, and the more technology it involves, the higher the chance of poor quality. 

Remember that "quality" is a function of three things: 

First, real quality. Have you provided - by objective standards - a truly high quality service or product? 

The second is expected quality. You can do a great job but have a very disappointed customer if your solution does not meet their expectations, no matter how unreasonable you think they are.  

Third, perceived quality. Why do people think that the relatively unappetizing Patagonian toothfish (at least to my taste) is delicious? Because restaurants call it the Chilean Bar and cook it with all sorts of fancy methods, sauces, and side dishes.  

To help support your client's verdict on the quality of your work, consider these strategies: 

1. Put real, relevant quality control mechanisms in place. These can include different levels of control - for example, at the relationship manager level as well as at the senior management level. Ask your team members what they think. Get formal feedback from the customer several times a year.  

2. Agree carefully on expectations at the beginning of a project or engagement. Focus on agreeing on outcomes and goals, not deliverables. A deliverable is a quarterly meeting, while an outcome is improving response time when customers call.  

3. Improve your client's perception of the quality and efficiency of your work. One way to do this is to create transparency around your process, so that your client sees all your hard work and effort. A second way is to share the difficulties of what you do - in other words, make sure the client understands the challenges you've overcome to deliver for them and the special requirements of the engagement. A third approach is to make sure your client gets positive feedback from their employees. This may not happen naturally. If someone tells you that you or your company was helpful, ask them (humbly) to share that feedback with their boss.  

6. Low personal compatibility 

Friendliness is one of the four key qualities that almost every executive client looks for in a vendor or service provider (the other three are deliverability, trust, and value). I've heard it over and over again. One of my own clients, for example, fired a very smart and experienced consultant because he was arrogant and condescending to everyone below the leadership.  

If you are working with a company, you have the option of bringing in a new relationship manager or customer relationship manager when a lack of personal compatibility threatens the relationship. But why wait until then? You can improve personal compatibility with some very simple steps. Sometimes a relationship that starts off on the wrong foot can do very well when one side makes reasonable adjustments to their behavior. For example: 

• Are you a good listener? Do you listen carefully, assert yourself and ask thoughtful follow-up questions? 
• Have you shown the client you work with directly that they can trust you to support them in their goals - as opposed to playing politics and going to their supervisor behind their back? 
• Have you taken the time to understand how your client would like to structure and manage the relationship and how they like to communicate? 

7. A decline in confidence 

To understand how this can happen, let's first re-examine what builds trust with clients. Very simply, professional trust is based on : 

1. Competence: You must consistently deliver against expectations. 

2. Integrity: You must demonstrate honesty, but also reliability, consistency, and discretion.  

3. Perception of intent, or focus on the agenda: You need to show that you are truly concerned with your client's agenda, not your own - that you are looking out for their interests at all times.  

Several other factors influence a client's willingness to trust. These include their perception of the risk of trusting you, and the amount of face-to-face time they have had with you.  

You rarely trust someone you haven't spent time with! 

Usually, I think a decline in confidence is precipitated by a sense that you're not paying as much attention as you used to, and that your work isn't as accurate as it used to be.  

Part of the solution to this is to schedule a regular "agenda setting" conversation that is focused on the client's overall business and how the relationship will instead take stock of the progress of a project.  

8. Of complacency 

This is probably the reason why many relationships end - professionally and personally. One side takes the other for granted, guaranteed. Or, both simply stop caring as much as they did at the beginning of the relationship.  

More broadly, complacency is the enemy of the successful professional. You love your job, you have good clients, and you earn a good salary. So why work harder? It happens all the time. You stop pushing, and you start to - well, coast. When that happens, it's time to shake it off. 

Each year, look at your client list. Ask yourself these questions: 

• Which clients keep you up at night, and which ones get you up in the morning because you're excited about the work? 
• Which customers are likely to leave you for one of the eight reasons presented in this article? 
• Do you have a valued client to whom you become complacent? Why does this happen? 
• What would a competitor do to approach your customers and take their business from you? 
• This year, are you taking your practice to the next level - or at least improving it significantly in several aspects? What is your plan for this? 

In conclusion: Be intentional in your efforts to maintain customer relationships that are mutually beneficial, engaging and motivating for you.   

Keep in mind these eight reasons why clients may leave. Sometimes it's inevitable that a relationship will end, but there's a lot you can do to counter each of these challenges: 

1. A reorganization or a change in leadership. 

2. A unique or temporary need for your services. 

3. A financial crisis or profit crunch - and a lack of budget for you. 

4. The impact and benefits of your work are not indisputable. 

5. Quality or delivery problems. 

6. Low personal compatibility. 

7. A decline in confidence. 

8. Complacency on your part.