Losing a key client can be devastating for any business. This devastation is not limited to just financial loss or tarnished company brand. There is the declining employee morale associated with the loss as well. No business has a perfect record when it comes to retention. Even your best customers will eventually move on at some point, and not necessarily because of your lack of performance on your end. When you come to terms with this reality, you'll be prepared for when it happens. I've personally worked with entrepreneurs who have experienced loss at all levels. But the one thing that stings these solitary geniuses the most is losing one of their biggest clients.
Take the necessary steps to recover from a major customer loss so you're positioned to recover quickly:
- Be flexible with your staffing. Creating the right types of efficiencies will ensure that your company isn't overstaffed, even on your biggest accounts. Even if employees are dedicated to certain accounts, make sure that you have a plan for migrating your people to other areas of the company should you lose that client. Laying people off and then hiring more resources again creates a highly volatile environment.
- Establish the root-cause reason for the loss. What are the root-cause reasons for the defection? Break down each execution or relationship error to its root cause and develop strategies to deal with them in the future.
- Review Operational Performance. If you are always asking your customers what you could be doing better, they know you care about continuously improving how you conduct business. Identify what needs to improve with your people and processes, and make the changes immediately, as this may help you retain your customers.
- Perform an after-action review. If a client notifies you on one or more occas
ion that there is a problem, then notifies you that they are leaving; gather as much information as you can from the client and your team before the relationship abruptly ends. If the client's reasoning has nothing to do with performance, great. If it does, you need to understand exactly what went wrong and learn from those mistakes. Hey, maybe it was just the wrong client, or maybe you just need to improve your line of communication—a simple fix.
- Audit your accounts quarterly. While you're at it, you probably want to make sure all of your customers are happy and there isn't any risk of others leaving. Increase personal communication with them and make sure the team is doing everything it can to maintain great customer relationships.
- Make responsible cuts. The first reaction to loss is to often make drastic expense cuts and push sales. Though both strategies may be necessary, they to be done done responsibly and in tandem. Once you have reallocated current resources to other projects, look at non-personnel-related expenses. You will probably find room for cutting without resorting to layoffs.
- Sell, but intelligently. In these types of situations, sales-minded people will follow the mantra that "a sale solves everything." Have a self-sustainable team dedicated to bringing in new business. If you can replace the losses quickly, you'll be in a better financial position to take your time improving other areas of the business.
- Conduct a morale check. Losing big accounts can have a negative impact on morale. Your team may feel as if it failed and fear repercussions. As always, the best form of action is to communicate with your team. Help them understand what happened,why, and what you are going to do to move forward. As long as they know there is a plan and feel secure in their role, recovery time will be that much quicker.
Topics: Customer Service Lessons