Do You Really Understand Why You Are Losing Clients? Usually Just A Handful Of Reasons
KENNESAW, Ga. (Jul 28, 2016) — As a senior manager – how confident are you that you that you really understand the specific reasons why you have lost clients? It’s really important that you do because – we submit that - your responsibility is to develop an effective strategy for improving retention by leveraging your own experience and scope of knowledge to direct the organization’s approach.
Developing and communicating the “Lessons Learned” is an effective way to do so. In the facilitations we lead, we gather together a select group of senior managers – the most experienced people in the company with years of hands on experience managing clients. They know what works – and what doesn’t – what has and what hasn’t.
During these facilitations, we engage these executives to list specific reasons that they have actually experienced lost contracts. Not hearsay – not theory – real documentable terminations and the reasons underlying the losses. One at a time, in turn, the reasons are parsed and captured. In many cases, after several hours of work, we’ve seen 50, or even more reasons on the pages of the flip charts affixed to the walls. Lots of stuff can go wrong in managing complex clients – and often does.
The interesting part is what happens when we use simple algorithms to assign a frequency of occurrence to each reason for loss. Every time we’ve done this (dozens of companies – dozens of years) a handful of reasons – perhaps 6 or 7 at the very most – explain the wide majority of the losses – usually over 80%. It seldom amazes us anymore, but it almost always amazes our clients. “Wow! Just a handful of reasons explain all the losses this company has ever experienced?”
Here’s the thing – this presents an opportunity for exercising corporate knowledge management in its’ purest and most digestible form. Owning these reasons - expressing them in clear and actionable language - and committing to an intensive process of teaching them to everyone in the organization – especially the newer people as they onboard – shares this important experience efficiently throughout the company. (“Here are the things that historically get us into trouble – avoid these things.”)
We go further to elicit from the executives the “Warning Signs” that specific reasons for loss may be occurring at the account and most importantly, if a Warning Sign is present, what exactly do we want our people to do? What is the “Action” they should take?
Losing clients is a very expensive seminar to attend – we shouldn’t have to go to it time and again to learn the lessons we need to learn to help prevent it. Managing the knowledge that we already have is important (and profitable) work.
“Experience is a hard teacher – she gives the test first – then teaches the lesson.” (Anais Ninn)
Steve, John & Gary