Whilst many advisory firms benefit from very low levels of client attrition, others would acknowledge that hanging on to high value, profitable clients has, in these volatile market conditions, been more challenging than it should be, so I thought it might be useful to look at the key reasons clients leave. Research consistently suggests that the two principle causes of client dissatisfaction (and hence defection) are poor service and poor communication. Whilst losing certain clients (overly demanding, unprofitable, unappreciative, “difficult”) might be seen as a bit of a result, on the whole, client retention is a key driver of profitability.
So, what are the 4 most effective ways to lose clients;
Whether that’s in person, by email or over the phone, if you don’t constantly and consistently acknowledge that they exist, they’ll walk… eventually. I read the other day that some retailers impose a “10 Foot Rule” that requires customers to be acknowledged by staff if they are within 10 feet. Find ways to keep in touch and make sure your phones are answered quickly and enthusiastically.
Make it difficult to do business with you.
Being difficult to get hold of, being unresponsive or taking too much time to get back to clients are guaranteed to undermine their trust in you. Such behaviour suggests (even if it’s not true) that you just don’t care. Particularly in todays culture of “immediate expectation”. Don’t make clients have to work hard when they interact with you. I recently tried to move a reasonable amount of cash to a new bank. Having completed the application, I had a couple of questions. Finding someone who could answer them was incredibly difficult and when I did they asked me to keep a note of the date I posted the application “in case it went astray!” The completed application went in the bin, not the post!
Break your promises.
Be reliable. Being reliable is the quickest way to build trust, so if you say you’ll do something, do it. And do it in the agreed timescale. All the time, every time, no excuses.
Don’t listen to them.
It’s commercial suicide not to listen to what your customers are telling you. Whether that’s listening to what they say they want/need, listening to what they have to say about your service or your business. Don’t wait for them to come to you. Be proactive. Find ways to engage with clients formally and informally and ask them for their feedback and ideas. They’ll be delighted you asked. Make sure however that you respond to what they say. Use the feedback to make changes to your proposition or the way you deliver your service.
What are your tips for avoiding client defections?