So you’ve spent thousands of rands on advertising, countless hours crafting your marketing content, website copy and the perfect call to action button to hook your next whale of a client. Your call goes great and you send them a proposal, onboard them, plan the work with your team and execute on time and to their specs. After spending further time ensuring they’re happy, you get an email from them thanking you for all your hard work and saying that they have found another provider who will be taking over their account. Your heart drops, you’re confused, frustrated and disappointed that they didn’t mention that they were unhappy with your services.
Does this sound like something you’ve experienced before? Well, if it is, let’s dig deeper into some strategies that could help you manage things better in the future.
1. Find the right fit
One of the main challenges we have had over the last few years is finding the right clients that fit our vision, values, and culture. Value alignment does not mean that their business has the same values as yours, but that the values that each of you have laid out is respected by both parties.
Part of our vision is that we strive to support SA businesses that grow their team, as we believe unemployment can be alleviated through SMEs who have people grow in their medium-term goals. This clarity around our vision helps us make better decisions in selecting who we sign up as clients. Do you have a clear vision for your business and have you thought about how that impacts your client onboarding process?
We have a strong focus on our people and their development. Therefore, when selecting our customers, it is important that we understand their approach to their people. Are there any misalignments between your business and your clients? Have you found that this has caused any friction in the past?
2. At the right price
Getting your pricing right up front is really important as it is a tricky topic to bring up with your customers, especially if you have got it wrong at the onset. If you’re a service business, spend time scoping potential clients, ask the right questions and benchmark them against similar clients in your portfolio. Similarly, for product businesses, do your homework in comparing your products against existing products in the industry and be sure to factor in the implications of registering for VAT into your pricing now.
What we’ve realised after many years of trial and error is that it is important to know your point of difference and price accordingly. We like to provide a good quality service at a reasonable price. We have spent a lot of time building our brand, internal processes and systems to be able to be efficient, effective and be able to provide a quality service, and for that, we charge a premium.
3. Lay the Right Foundation
We strongly believe that great relationships are built through communication. Like with every relationship, the initial phase tends to include more regular communication to get to know each other. Once the grounding phase is done, communication levels should drop accordingly. Set boundaries with after-hours communication and communication turnaround time to prevent unnecessary friction. Tip: ask how and when your clients like to be contacted, some people want you to email only and some people like an added touch of a call.
Scope Creep is a common challenge with service businesses. Clearly defining your scope, setting clear expectations around deliverables and being firm with your customer when there are items out of scope will help you navigate your relationship together with confidence. Out of scope work is work you should be billing for and is an opportunity if done in a diplomatic manner.
Understanding expectations around the payment of your fees is vital to a good working relationship. Our recommendation is, if possible, to sign your clients up on a debit order basis. This allows you to collect money in a predictable way and to reduce the administration around chasing customers for non-payment. If you are thinking of granting credit to customers, start out small and assess their account over time. Your terms and conditions should include how you plan to deal with non-payment of accounts. If you are in the service industry, a common way to tackle it is to pause your services until your client has settled their account.
4. Maintain momentum
How do you ensure that the momentum built during the early stages of your relationship doesn’t slow down or fade away? According to a Harvard Business Review article, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. So keeping customers happy is cheaper than trying to get new ones!
For us, it’s about building regular rhythms and touchpoints. Here are a few simple ways to start:
Weekly phone calls
Meeting in person every two months
Celebrating their successes via your social channels
Customer satisfaction surveys
We have a customer referral program that rewards our clients for recommending other businesses to us. Similarly, we recommend clients to each other where we see an aligned opportunity. If you’re in the retail, hospitality or eCommerce industries, a customer loyalty program is a great way to incentivise your customers to keep coming back for more.
It is important to celebrate customer milestones. For us, this includes business and personal milestones of the key people in the business. Find ways to celebrate together and you’ll forge stronger and longer relationships.
A simple and effective way to know whether you’re doing is a good job is to ask. Crafting a simple customer satisfaction survey will help you gather information on how you are performing and whether there are any warning signs that need to be addressed. It is also a great way to get feedback to share with your team on how well they are performing on various accounts.
5. Know when to part ways
Retaining the right clients is critical, but sometimes it is also important to realise when it’s not working out with a client and end the relationship. In this 2016 article by Entrepreneur, they discuss when it’s time to fire a client. Having a client that demands a lot of time but does not value your expertise is a drain on your resources.
A significant drop or lack of communication is a warning sign that the relationship is deteriorating. We find that when we have customers who are not replying to us, it causes delays in execution, which compounds over time.
A client can also grow beyond what you can accommodate. A number of our clients have businesses that scaled beyond our services and they hired a team in-house to do their finances, which is a great success.
Review your client base on a regular basis to see if there are clients that you may need to part ways with and start the conversation. It can be a challenging discussion to have, but it is an important one to have in order to grow your business and keep aligned with your own vision, values and culture.