CRN From the Coal Face

CRN From the Coal Face

01.9.2014 Ever wonder why clients leave? CRN September 2014


Wouldn’t it be nice to get inside the heads of your clients and work out just why they make the decisions they make? I am always fascinated as to what the trigger was for a client to make contact with a supplier today. Why not yesterday or last week or next month?

I haven’t got an easy answer, but one item that I can help you with is why people go the other way and stop dealing with you. Not every trigger is preventable, but the majority are.

The number one reason that clients walk away – by a long way – is perceived indifference. It seems inconsequential. At first glance, you might think there are a number of other things that would have a bigger impact on client retention but, no – if you don’t show you care, or at least make the client think you care - then any client will be easy prey for your competitors.

No matter how good your product or service, there are competitors with similar offers. But if your client believes you really care about their business, they are practically un-poachable. A survey by the American Society of Quality showed that an attitude of indifference can account for as high as 68 per cent of lost clients.

There are many ways you can show clients you care – or show them disdain. Many large companies utilise an Interactive Voice Response (IVR) telephone system and leave clients on hold listening to Greensleeves. Not surprisingly, 90 per cent of consumers in a Forester survey say they don’t like these systems. Is the efficiency gain from an IVR worth the contempt it shows to your clients?

The next reason for a client to say, “tally ho” is poor communication. This can include calls not returned in a timely fashion or not at all; lack of updates during a major project; different information from different parts of the organisation or just misinformation from your staff.

One of the toughest calls to make is delivering bad news to a client, but getting it out of the way promptly is crucial to retaining a client.

Another reason for a client to decide that the grass is greener elsewhere is because of poor-quality products or services. If you sell products that continually fail – even though you may not be the manufacturer – you are tarnished by association. If you sell high-quality products and deliver them with exceptional customer service, it is less likely your clients will like the other shade of green.

Next on the list is a lack of dealing with a problem or complaint. If a client complains, 82 per cent want the problem fixed; 62 per cent just want to vent and 58 per cent just want an apology. Dealing with complaints quickly and efficiently can actually cement a client relationship and they will be even more loyal than if they had not experienced any issue at all.

Surprisingly, the odds of losing a client to a super-hot deal from a competitor are very low, only about 8 per cent. The three bottom reasons that people leave – personal relationship; client moves away and death – are out of your control. Because these three reasons combined only account for about 8 per cent then you see how unrealistic it is to focus all of your efforts on what your competitors are doing. If you can consistently deliver on the top reasons that clients do walk away, the loss from all of the other methods becomes basically irrelevant (except death – and then your clients literally are not walking away).

Tell me if you think there are other more important reasons that clients walk away at md@smallbusinessrules.com

Breakout:

I was recently speaking with Geoff Olds, Managing Director of TechFlare about his high level of customer retention. Geoff takes a very focused approach to retaining his clients, with the well-known logic that it is harder to attract a new client than it is to retain an existing client. Geoff explained it to me. “Critical to the success of TechFlare is a dedicated service delivery team that focuses only on clients. It is a big investment to have a team that is not designed to generate any sales or solve technical issues but it is important that we value our clients not just through words but through actions.” The added bonus, continues Geoff, is that this team acts as “the honest broker ensuring the clients are heard and treated fairly.” Geoff argues (correctly in my view) that if you don’t want the classic ‘leaking bucket’ syndrome where new clients come in the top but old ones leak out the bottom, you need to focus on plugging the holes first.