Why Your Clients Are Leaving Your Business

Why Your Clients Are Leaving Your Business

Depending on the nature of your business and your number of clients, the impact of having just one leave can be devastating. Regardless of how much your business has riding on each of your clients, it's in your best interest to maximize your retention rates to hold on to them all.

I've covered some general tactics for improving customer retention in the past, but here I'll take an alternative perspective: focusing on the reasons why customers leave in the first place. From my experience and research, I can describe 10 main reasons clients leave their vendors and partners, and suggest some good ways to prevent their motivations for doing so:

1. Budget

Sometimes, a business simply runs out of money, or is forced to cut optional services, to allow a bigger budget for something more important. This is a hard scenario to address, but you do have a few options here -- the most effective being your coming up with a compromise that allows the client to pay less for a smaller range of services. In this case, you're still taking a loss, but you'll retain the client -- and that's the important thing

2. Value

If the client doesn't see an objective value, or ROI, in your products and services, he or she isn't going to stick around. It isn't this person's job to calculate and prove that ROI; it's yours. So, take the time to show your client the value you provide. Do that regularly if you want to secure your client's positive impressions of you.

3. Trust

Trust is a huge factor for retention of clients; if they feel that you aren't being honest or straightforward, they'll question your value and withdraw their patronage. There's only one way to prevent that departure, and that's to be as honest and direct as possible, consistently and from the beginning of the relationship. Be honest and direct, even when "the truth" is hard to express.

4. Politics

Occasionally, you'll run into a problem where one person in your client's business is excited and happy with your relationship, but a higher-up decision-maker questions it. Internal politics can ruin a relationship through no fault of your own. So, do your best to get involved at multiple stages of the company.

5. Apathy

When customers review the services they have (and yours are among them), an emotional response will keep them loyal to your brand. A lack of emotion, however, will make them question why they're paying for you. So, fight against apathy by including more positive feelings in your everyday exchanges. Offer small surprises and personal touches.

6. Personnel

Your client may grow attached to a particular account manager or staff member on your team. In the event of turnover or a promotion, the resulting change in personnel may prompt that client to leave. The best way to address this is to mitigate turnover and train your employees as consistently as possible to reduce volatility under such circumstances.

7. Failure

If you drop the ball on a major project or flat-out screw up, your client may take that as a sign to leave. Reduce this possibility by admitting to your mistakes openly. Work hard to make up for any damages you might have caused in the process.

8. Neglect

Clients require regular attention to feel that their business is appreciated and that it adds strength to the integrity of their partnership with you. If you aren't being proactive enough with communication, or aren't including enough personal touches, clients may feel as though you've abandoned them. Work hard to stay top of mind.

9. Needs

Sometimes, clients need change. They may no longer require your services, or may hire an in-house employee to cover what you previously supplied. And, unfortunately, there's no easy way out of this one. You can't change your clients' needs. All you can do is try to offer them new options for services in line with their new vision, goals and structure.

10. Competition

Be honest: You aren't the only supplier in town, and there are competitors who may offer a similar service for a lower price, or a better one for the same price. If a client catches wind of a competitor who outprices or outperforms you, you may lose that business. Therefore, it's in your best interest to do proactive competitive research and get ahead of these possible departures.
Identify your weaknesses, knowing how you stack up to the competition, and eliminate weaknesses even as you ensure that you're being the best at your strengths.
Clients won't leave you without a good reason, especially in higher-value partnerships. You owe it to your business to understand the psychology behind a potential client departure, and to work proactively to start mitigating the risks in any at-risk area you identify. Your client-retention strategy isn't going to be perfect, and it doesn't have to be; client churn is part of any business. But you do have the job to minimize it as much as you can, to maximize revenue and profits and keep your customers as happy as you can.

For any questions leave us a comment below