When Client Churn is Good

November 22nd, 2011   •   1 comment   

Parting is such sweet sorrow. It is painful for me to lose a client. Not because of the revenue or prestige as much as it is my personal and emotional investment I make in my clients. Some days I think I’m too attached but that’s when you know you are vested and that’s when great work for the client can happen. When my clients hire me they get more than just a marketing consultant with over 20 years in the business. They get me and my team and the investment we make in order to understand their goals and help them reach them.

In a meeting with a client last week, I heard my client say these words: “Amy, your group has really made a difference in what people are hearing about us…and our investment is paying off.” That is a key statement and one that I seek in every client engagement. The “ROI” is there for our clients because we understand their business and we have our own skin in their game because we invest the extra time, energy and resources to go beyond the required scope.

A few months ago, I had to release a client from my circle. It was a client I’ve had for a very long time and I know them well. Unfortunately, due to some internal changes by the client, I found myself on the other side of the table, having trouble getting my agenda accomplished. Further, the client decided to seek other counsel subjecting me to the uncomfortable and unfamiliar process of jumping through some hoops to get to my goal. It wasn’t long before my objective was clear: It’s time for the client to try someone else—at a much higher rate I’d like to note. This process is so painful for me because I take my client relationships personally. However, there comes a time when someone crosses a line and you just should not go back. You know you have made the right decision when you feel good about something that you would normally think is bad. Parting ways was clearly the right thing to do, as much as I hated to have to do it. When one door shuts however, others will open and that is what has happened in this case.

If you are an established marketing professional with a good track record and a great team, you probably can afford some client churn. Here are a few characteristics from the trenches that will help you know when it’s that time:

    • Your client stops listening to you or worse, starts listening to others who don’t have the same level of experience or share your goals. This can happen when a competitor comes along and flashes your client with some new technique or process that you know won’t work.

 

    • Anytime you have management changes or, for example, a new CFO. This sometimes happens if the new management has someone with whom they have worked and trust. I have had clients who have sold companies and sometimes client churn will happen as a result of the transaction.

 

    • You’ve done such a great job that your client doesn’t need you anymore. I have had this happen only once, as most people know that it’s never a good time to STOP marketing or to STOP telling your story.

 

    • Your client thinks you are too expensive. Our fees are very reasonable so normally this is not our issue but if you have to justify yourself regularly, then the client probably cannot afford a marketing program.

 

  • Finally, you know you must part ways with any client who fails to pay you or who is dishonest or disloyal. Unfortunately, there are those types out there and having a good vetting system helps avoid what I like to call “false start” relationships—when you start down a path and find out that the client isn’t what he or she said they were. We are selective about the people we take on as clients and I think that’s important to success on many levels for both the client and my team.

In summary, we like to work for clients that get it. Those that are growing, profitable, understand their business, appreciate what a marketing team can do, are innovative and always looking for better ways to do things (including new ideas). For example, we have a client who this week launched a totally different yet complimentary business. It’s called Teton Stone. My client, Morgreen Landscape (Collierville, TN) decided that they would benefit from opening a stone company to compliment the landscape business as people are doing more with outdoor spaces (outdoor fireplaces, kitchens, pools, fountains, etc.). What great courage and vision it takes to run a business in this economy! Our clients are ringing the bell everyday and we’re right there with them to celebrate and promote successes.

When you have to churn a client or two, remember that you create capacity for new ones. New clients bring you new challenges, new ideas and new revenue. However, when you do release a client it’s important create a productive transition. Finish what you need to and don’t ever leave a client in a ditch. Even if your agreement has ended, if they need you, help them. Be as professional as you can and give your client plenty of “wrap up” time and be clear about how the transition will go. If you can, find someone else to help them. I’m still on good terms with past clients and who knows when things will change again and they’ll come back. Sometimes clients come back because they didn’t realize what a deal they really had! Bottom line here is always do the right thing for the client, even when you are churning.

One comment

  1. Frank Strong says:

    “Anytime you have management changes…” Indeed, any time there’s a new CMO, the standard playbook comes to bear:

    1. Fire an agency and hire your old one.
    2. “Reorganize” the staff, knock off a few in the process and hire your old staff.
    3. Launch a “rebranding” campaign.

    Sometimes the order of these steps can be adjusted, but there’s a good chance these three things happen every time there’s a CMO change.

Leave a Reply