How to Lose Your Biggest Client and Survive | Coding Ninjas
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August 2019
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How to Lose Your Biggest Client and Survive

Andrey ZagorodniyAndrey Zagorodniy

Breakups happen

They just do, there’s no way around it. You didn’t think that once you find a client they stay with you forever, did you? Even the most loyal customers may part ways with your digital agency, for a number of reasons. And when the biggest ones leave, it can sometimes look like the end of the world. And your business.

It is not necessarily your fault when it happens. Clients come and go. BBDO lost one of its biggest clients, Visa (and won it back in 2010, but that’s a different story). The Martin Agency lost Walmart to Publicis Groupe. These agencies have a well-earned reputation and high credibility – and still, some of their clients decide to part ways with them. So, if it happens to you, it does not mean that you did something wrong. Your customers may have had their own reasons. 

Or, it could be your fault as well. Digital agencies do make mistakes that cost clients. Below, we’ll analyze the most likely causes from client-side and agency-side perspectives, and figure out the consequences of losing your best customers. 

Table of contents

Are there any tell-tale signs?

Why do clients leave?

What happens next?

Your plan of action

How to win the client back

Are there any tell-tale signs?

Clients rarely fall off your agency unexpectedly. Often, there are red flags indicating that something went wrong in your relationship. Reilly Newman, the founder, and the Lead Strategist at Newman Creative Studios whom we interviewed believes that the brightest indicator of the status of any type of relationships is the quality of communication

“When a client starts to communicate less often or more briefly, typically something will be “off” and it is best to jump on it right away and see if there has been any confusion or miscommunication. From there, do an audit of the relationship, makeup, and honor the relationship (if it has been healthy) and exceed their expectations,” says Newman. 

Expert Reilly Newman, Lead Strategist at Newman Creative Studios
Reilly Newman, the founder, and the Lead Strategist at Newman Creative Studios

Experts agree upon the following signs indicating your client is about to leave:

Why do clients leave?

Sometimes, despite all the effort your team puts in for your customers, they just go. Before indulging into constructive self-analysis (or completely excruciating self-loathing), we recommend that you consider the following: 

Client’s perspective

Their budget has decreased

The situation you probably have little to none ways to influence. Be it because of inefficient management or unpredicted emergencies, the client has to cut their investments into outer services (yours included) to focus their budget on the internal needs.

They’ve found better services elsewhere

You can see it as your fault (like in, “We failed to become the best possible solution for our client”). However, competition is harsh. There is always a chance another agency offers the same services as you do, but for a better price. Or with a more appealing attitude. Or promotes itself better. Or is in no way better than you, but the client just feels they want a change.  

Changes in management

Your client’s former project manager saw a lot of value in your relationships, but the new one doesn’t. They want to prove themselves useful, so they start changing everything their hands can reach. Or, a decision-maker on your client’s side decides to prioritize other directions.

Internalizing

You client might have hired an in-house employee able to cover the tasks that you previously got paid for. Simple as that. 

Could it be your mistake?

The real question you need to ask yourself when you lose a client is, “What did I do to cause their leave?” Some circumstances are out of your control. But, if you dig deeper, you will probably find one or several flaws and mistakes in your approach. 

Unclarified expectations

You’re running a small agency of 10 to 15 enthusiasts ready to work day and night. One day, a famous brand contacts you and makes an order. They pay well, but they expect you to do everything in 24 hours. You know you lack manpower. You know you don’t have the resources. But, afraid to lose a client like that, you agree to their terms without discussion. And, most likely, you fail to deliver a satisfying result. 

“A digital agency that neglects to establish expectations before the relationship even starts is likely to fall short. This then will create areas of miscommunication which will eventually erode the overall results and relationship,” says Newman.

Another way around it? Clarify your customer’s expectations:

If a customer leaves after the discussion stage, they may still return later with a smaller request matching your agency’s capacities. If you fail a customer after agreeing to their terms, you will lose them forever. 

Flawed communication

The lack of communication

This is a mistake many agencies tend to make. You clarify your customer’s needs. You discuss the terms. You start working – and go off of the radar for the entire project duration.

In this case, your client is left dangling in uncertainty. Should they guide your creative process? Will there be additional briefing sessions on each project stage? What’s your progress? Are you even working on their order? 

No clear point of contact

If your client has to discuss project details with a multitude of different people, it can lead to conflicting communication and all kinds of misunderstandings. For you, it means two things: revisions and the loss of a client.  

Overcomplication

Sometimes, agencies convey so much professional slang when discussing technical details with the clients that it starts looking completely cryptic to them. Regardless of whether it is done unintentionally or to disclaim responsibility and cover-up mistakes, complicated tech talk will intimidate your clients to the extent when they decide to find another agency. 

You failed

Not every failure causes clients to leave. After all, if there was no place for tolerance and second chances in business, young companies and startups would disappear immediately after entering the market. 

However, a failure that you conceal and refuse to openly admit is what signals your customer to abandon the ship. 

A wrong approach to customer relations

If you want your clients to stick around, you should constantly seek to add value to your relationship. Instead, some agencies attempt to hold their clients by force. If you: 

and pressure them by using “or else” rhetoric, your customers will eventually turn away from you.

Laugh all you want, sometimes agencies do that.

What happens next?

Loss of revenue

Obviously, as your major client vanishes on the horizon, so does the solid share of your revenue. Which means halted growth plans, fewer benefits/bonuses for your employees, and increased expenses on customer acquisition.  

Confusion among employees

This is not bound to happen. But if you are a small company and your team knew who was your biggest sacred cow, bad news can cause people to start worrying about losing their jobs. 

Getting emotional

Of course, you knew that every business loses big clients at least once. But, the truth is that loss hits us harder than gain. Even if you win a much bigger client the next day, you will still feel bad. Because of this, you can miss an opportunity to make up for the loss. It is important to carefully manage your emotions and stay open for new possibilities. 

Reputation losses

If you lose a customer because you failed them or because of miscommunication, they are likely to spread the word. Word of mouth is especially powerful in the epoch of social media. Sad but true: 95% of unsatisfied customers share their negative opinion with other people. 45% do it on social media, where 63% of consumers read their reviews and draw conclusions. You don’t want that. 

stats on customer reviews

What would the worst-case scenario look like?

If you developed your agency with an eye on the needs of your biggest client only, you are screwed. Here is how Reilly Newman puts it:

“Worst case scenario would look like layoffs and financial loss due to agencies hiring based on that one client’s specific needs. Once that is gone and if an agency does not recover by filling the now open canyon, jobs will be lost along with revenue, profit, and overall growth. You may even slide backward compared to the previous years. Ouch.”

Newman’s scenario pretty much sums up all the bad things that can happen to your agency at once. Indeed, ouch. 

To avoid this, Newman advises to never have clients be more than 20% of your revenue (according to David Baker, if a client makes 25% or above of your annual revenue, they are LARGE, and their loss can be detrimental to your business).

Your plan of action

Rounding up the relationship with the client properly

It is important to finish the relationship with the client properly. Firstly, because their leave might be temporary and they could be planning to return in the future. Secondly, because the world is a small place, and the word spreads quickly. You don’t want to be (or even seem) rude. 

According to Reilly Newman, here is one way to manage things when your best customer abandons ship: 

“Whenever in business I believe one should always be polite and take the high road (even if the other party is being distasteful). If someone simply doesn’t want your services, thank them for their time and wish them well. Never act desperate for work. Then in your calendar mark a day that is 30-90 days (depending on the prospect) out and check in with them. Not to be annoying and attempt to sell them again, but simply to see how they are doing. Then see what happens.”

The “good-bye” phone call is extremely important. This client was your reliable source of income for a time being – at least, be thankful for that and express your gratitude. Besides, this is a good chance to ask for feedback and to possibly figure out who they are now doing business with, and why.  

Your survival strategies

After calling the customer and confirming that they are actually leaving, you need to take action. 

Drink and mourn

Just kidding. But hey, you do need some time to realize the fact that your biggest client’s gone. Nothing good will come out from acting in panic.

Tell your team

They will start to suspect, eventually. Better you tell them the bitter truth, than they learn it themselves. Besides, secrecy is not a good corporate policy. Then, observe their reactions. Some of the possible ones can look like this:

Discuss the problem with everyone involved

It is crucial that you understand your mistakes. The point here is not to find a whipping boy but to recreate the work process with the client and understand what went wrong, and when. If you did make that final phone call to the customer, analyze their feedback together and match it with your conclusions. 

Count your losses and cut expenses

You want to know how much time you can stay afloat. Map your sales cycle to see (realistically) how many sales you can close in the nearest future, who is going to commission you for your services, and when. Review all of your business expenses, and eliminate those that aren’t crucial for your survival, and for your ability to do your job.     

Get in touch with your other customers 

If you’re making the same mistakes with them, you want to know about it ASAP. Ask them for feedback, offer your help with the challenges they are currently facing. If your other clients are already aware of your situation, admit and clarify it. You don’t want to look like you’re hiding an elephant in a closet.  

Focus on your existing clientele

Newman suggests aiming for recovering the full amount (or portion) of the lost incomes by a certain date through new work or approaching existing clientele to sell them on additional services. You should not be pushy, though: you don’t want to look desperate in their eyes, especially is they already know about your situation.

Offer value

Loyal customers may forgive your mistakes and flaws. By the end of the day, all the difference in the world can be made by:

Work with freelancers

Partially, at least. Often, when a big customer abandons your agency, you lose a bunch of tasks and requests specific for them. If you hired in-house specialists to work on these tasks, you might have had to hire some (or even all) of them. Sounds awful, right?

Well, you don’t have to put all your eggs in one basket. If things go south with the next big customer of yours, having freelancers in your team will alleviate the pain greatly. You won’t have to fire employees. Your financial losses will be smaller. You will be able to hire the same people for the next project. 

Hire freelancers from Coding Ninjas – we have some of the best contractors on the market of web and software development.

How to win the client back

Miracles do happen, and even if your best client is gone, it does not mean you cannot win them back. UPS (United Parcel Service) faced a disastrous strike and lost thousands of workers back in 1997, along with its clients. The company was on the brink of extinction.

Guess what? In 1998, UPS increased its profits by 87%. All due to its persistent comeback strategy that they started implementing immediately after the strike was settled. They called their clients, offered them discounts, and met them in person. They apologized and reassured everyone that things were great again. They provided perfect customer service and demonstrated a cheerful and confident attitude. 

It worked. 

Should you rush to win back the customer?

No rush. Your customer had reasons to leave, and by trying to handcuff them you will only make things worse. Be patient. A customer might want to return later, especially if your cooperation was fruitful to them.  

“Depending on your positioning and the nature of the relationship, there may be an opportunity to assist in other ways such as transitioning or reducing the scope of work to something that makes sense for them. All in all, be respectful to them and their internal decision. Never be pushy or rude,” says Reilly Newman.

Explore other possibilities to stay within the client’s field of view than trying to return your collaboration back in full.    

Steps to win your best client back

Learn why they stopped buying from you

Perhaps, they already told you during that good-bye phone call, remember?

Stay in touch

Don’t write-off someone simply because they are not your customer anymore. Make a short call every now and then, drop a polite email asking how things are going with them. Once you sever the connection, you disappear to them forever. “Out of sight, out of mind,” as the saying goes.

Research their current business situation 

Your breakup might be the result of a changed business model. To make them an offer they can’t refuse, you must know what they need right now. To some extent, approach a lost customer as a completely new one. 

Make them an adjusted offer

Wait it out. Take your time to create a special offer that would meet the current needs of your former client. During the period of your cooperation, they got to know what to expect from you. This new offer might surprise them, and make them consider giving you a second chance.

Don’t strive to make it a “bigger, better version of the same as before.” Focus on offering a unique service or package that precisely meets the challenges they are facing. 

Learn to move on

Sometimes, things don’t work out. In this case, just move on and make sure you don’t repeat the same mistakes with the new customers.

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