Lose Your Biggest Customer? Here Are 9 Steps to Recovery
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 a lack of performance on your end. When you come to terms with this reality, you'll be better prepared for when it happens.
As a former Navy SEAL, I can assure you that you won't win every battle. The goal is to win the war. The same applies to building a business. As an entrepreneur, I have experienced losses at all levels. But the one that stings the most is losing a customer. And losing your biggest client can feel devastating, whether your company is big or small.
But it doesn't have to be. Here are the nine things you need to do for your company so you're positioned to recover quickly when you lose your largest customer.
- 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 when you need them can create a highly volatile environment.
- Audit current processes. If you are always asking your customers what you could be doing better, they know you care about continuously improving how you do business. Identify what needs to improve with your people and processes and make the changes immediately, and this may help you retain more customers.
- Perform an after-action review. If a client notifies you that it's leaving, gather as much information as you can from the client and your team before the relationship ends. If the client's reasoning has nothing to do with your performance, great. If it does, you need to understand exactly what went wrong and learn from those mistakes. Maybe it was the wrong client. Maybe you overpromised and underdelivered. Maybe you need to improve certain systems.
- Fix it. Once you've done the proper discovery, fix the issues so you don't lose more customers for the same reason.
- Audit your other accounts. While you’re at it, you probably want to make sure your other customers are happy and there isn't 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 a loss can often be to make drastic expense cuts and push sales. Though both strategies are necessary, they need to be done responsibly and in tandem. Knee-jerk reactions won't get you anywhere. Once you have reallocated current resources to other projects, look at nonpersonnel-related expenses. You will probably find plenty of room for cutting without resorting to layoffs.
- Sell, but thoughtfully. In these types of situations, sales-minded people will follow the mantra that "sales solves everything." Have a self-sustainable team dedicated to bringing in new business. If you can replace the losses quickly with new business, you'll be in a better financial position to take your time improving other areas of the business.
- Do 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 thing to do is communicate with the team members. Help them understand what happened, why, and what you are going to do to move forward. As long as they know the plan and feel secure in their role, recovery time will be that much quicker.
- Don't lose heart. Freaking out won't help anything. You do what you can to save the account or make adjustments, but if it isn't in the cards, you need to keep your chin up and move forward.
Nobody likes losing customers, but it happens. Have a plan, stay positive, and keep moving forward. If you do this, it will sting less each time.