This Article originally appeared in
Talking To The Boss
June, 1992
Revised December, 1999

10 Easy Ways to Lose a Customer

by James T. Berger

While businesses will willingly invest large sums of money trying to attract new customers, they often loose valuable relationships through simple acts of carelessness and the failure to identify with the needs of the customer.

Today's business environment is brutal. Not only is difficult to get new business, your competitors are working overtime to steal your key accounts. If your company has problems in any of the following areas, you are loosing business. Ask the questions - do a "Customer Loss Prevention Audit."

10 Problem Areas - Essential Questions

I. Pricing:

• Are your fees in line with your services?
• Are you charging too much or too little?
• How price sensitive is your client?
• How often are your fees reviewed?
• How do your fees compare to your competition?

II. Perceived Value:

• What does your client seek from their relationship with you?
• Is the client receiving value-added from the relationship?
• How do you communicate value?
• Do you sense frustration from your client?
• Does the client recommend you to others?

III. Competition:

• Do you know who your competition is?
• What are their distinctive competencies?
• Have competitors made any attempt to steal your accounts?
• Are there major pricing differences between you and your competitors?
• Are you competitors getting more exposure and generating more awareness than you?

IV. Service:

• Are you empathetic to the needs of your customer?
• How good is your follow-up?
• What is the frequency of face-to-face contact and is it enough?
• Do you have a "phone mail" or automated answering service and how is it handled?
• Are you relying too heavily on FAXing or E-mail?

V. Work Quality:

• Do you have a quality control system in place?
• Are the same mistakes being made over and over again?
• How are client or customer complaints handled?

VI. Personality Conflicts:

• Do your closely monitor the relationships between your account people and the client?
• How involved is the New Business development person in the day-to-day activity with the customer?
• If it is heavy, does this present a problem?
• Do you continually bring on NEW account service people?
• And, if so, does the client have a problem with this?

VII. Adjusting to New Client Needs:

• Do you continually monitor and track the directions you customer is taking?
• Are you willing to grow with your customer?
• Are you willing to downsize your service to meet the needs of your client?
• Are you willing to put your relationship on "hold" while the customer is having problems?

VII. Billing:

• Who develops bills?
• Who approves bills?
• Who monitors payments?
• Who makes the telephone calls when bills are not paid and how are those calls handled?

VIII. Records - Keeping and Reporting:

• Do you routinely issue call or conference reports?
• Are these reports distributed in a timely manner?
• Who from BOTH your organization and the customer organization receive these reports?
• Are telephone calls, faxes and E-mail responded to immediately?

X. Communications:

This is the most crucial of the 10 reasons -- it is the "gatekeeper" for virtually all the others. Clients are never lost when you can communicate freely and openly. Your problems start when the customer stops complaining!

Repeating Mistakes

Lines of communications won't stay open forever, and one sure way to close or clog those lines of communications is making the same mistakes over and over again.

Anybody can make a mistake. In a healthy business relationship, the client freely communicates with you and points out the mistake. If you are doing your job, you thanks your client for telling you what's bothering them and you vows to fix it. What happens when the same mistakes happen again? Or, a third time?

At some point, the client doesn't know what to make of things. They've already complained. You've promised to fix it, and lo and behold it happens again. Does the client complain again? Maybe or maybe not. If they don't complain, they remember the mistake and the relationship has started to deteriorate. As this negligence continues to build and the customer continues not to complain, the relationship is headed down a deadend street. The "straw that breaks the camel's back" might be a small, insignificant event that simply represents the culmination of a long string of small, apparently insignificant events.

It's similar to an employee being fired. A boss who continues to berate an employee, complain about his work, points out things that the employee should be doing is unlikely to be fired. It's only when the boss stops that the employee should begin to worry.

Keeping Accounts - Productivity

Here are some valuable steps to be taken to strengthen existing relationships:

1. Consistently scrutinize pricing and value issues. This should be done both internally and through meetings with the client. Make sure the client is satisfied with the value he is getting from the relationship. Don't be afraid to raise or lower fees if warranted.
2. Constantly and consistently monitor the competitive environment. Be aware of new products and services offered by your competitors and be aware of your competitors` vulnerabilities.
3. Pay close attention to service and quality. Develop procedures for guaranteeing high-quality service. Create and implement a system of getting feedback from clients of service/quality levels and reward good service while pinpointing and correcting weak links.
4. Elicit suggestions from employees on how service/quality can be improved and reward good suggestions.
5. Immediately eliminate personality conflicts. If a client tells you he's having a problem with his account person, get him another one. Often, trying to force a solution only worsens them.

5 More Steps

1. Keep communications lines open.
2. Establish systems for reporting and following up on all meetings and telephone calls.
3. Regularly schedule breakfast and/or lunch meetings with clients.
4. Don't over-rely on FAX or E-mail - maintain "warmth" in communications.
5. Continually flood customers with ideas -- act don't react.

Long-Term Benefits

The long-term benefits of a client retention program go beyond simply keeping the business. A strong relationship guarantees you will grow with your customer. It also means NEW business because your clients will refer you to other potential clients. And, by cultivating these potential clients through the referral process, you have instant credibility and a major advantage over competitors who lack your level of credibility.

There is no question that a client retention program and system should become the single most important element of your business development program.

James T. Berger is a marketing consultant who specializes in new business development and client retention. He is a faculty member at Roosevelt University and University of Illinois at Chicago where he teaches a variety of marketing-related courses.