by Wayne Schultz
Last year, my technology consulting practice generated about 20 percent of its revenue from clients who bought first from a competitor. The surprising reason is that some consultants talk about pleasing and paying attention to their existing clients, but they don’t practice what they preach.
The secret to winning back lost clients is to communicate.
We view a loss to a competitor as the beginning of a new sales cycle. This one involves keeping our name constantly in front of the client and our phone number nearby. Past experience shows that somewhere in the area of two in 10 lost engagements ultimately become profitable clients.
Clients coming from other consultants can be, when properly screened, among the most loyal and high-paying anywhere. The key is to screen the clients prior to deciding whether to accept them.
We screen based on three things -- the ability to pay, a small number of previous consultants and no unwarranted bad mouthing of the software or prior consultant.
The best way that you can keep yourself in front of lost opportunities is via newsletters.
• E-mail newsletters. Early in the sales cycle, while the prospect is still eager to meet with you, get the e-mail address of every person involved in the decision-making process and add them to your monthly e-mail newsletter.
If you do not have a monthly newsletter, start one.
We publish ours two times per month, using an online service called Constant Contact (www.constantcontact.com). You can also create your own newsletters from software, or simply send out regular e-mails. The key is to be consistent and informative with your content.
Tip: E-mail newsletters must be chock full of helpful and insightful tips on the product or service that you offer. Nobody wants to read about your new office, awards you’ve won, revenue records you’ve broken or other information that’s not vital to his or her business.
Focus on giving free, substantive product information. Leave the bragging and boasting for press releases and advertisements.
• Paper newsletters. Monthly mailed newsletters may not be read every month. As a matter of fact they may never be read. However, there’s always a chance that they will be at least looked at, so put your name and phone number prominently on every newsletter. This will ensure that when clients or prospects have questions, they can find your phone number easily.
While communication can help retain valued clients, consultants should strive to avoid undesirable clients in the first place. You can do this by qualifying them.
When you get the phone call from a client who wants to start using your firm, don’t make the mistake of accepting them immediately. First, make sure that they can pay and consider why they are changing resellers.
We will not touch an existing user who wants to move from another reseller unless they pay a retainer against future billing, agree to a phone support plan, and can satisfactorily answers our questions about how their existing system is working.
We charge an up-front retainer to cover future services. We do this because there are always two sides to every story -- and we rarely get the full story as to why a client is leaving their former consultant.
In all instances, you want to protect yourself from a client who bought an incorrect solution or had it installed horribly wrong.
We are up-front in telling people that if we cannot fix the problem we still want to be paid for our efforts. After all, we weren’t the consultants who set up or sold the system and we don’t want to bear the risk if the system was ultimately a bad fit.
All new clients go onto a phone support program. This is to cover for those never-ending strings of five-minute phone calls that clients don’t want to pay for. The majority of these quick phone calls can fall through the cracks and never be billed.
We find that enrolling all of our clients on a phone support plan is the answer to these problems. Clients who don’t want to pay a support fee are referred elsewhere.
• Questions. We ask clients who are looking to make a change: "Why are you leaving?" and, "Who was your past consultant?" When there’s been more than one consultant within the last five years we tend to look extra closely at the client before deciding to proceed.
Any time a client talks about suing a former consultant or has excessive bad words, we refer the client (usually to our toughest competitor).
Perhaps the stickiest issue for us has been how to deal with the consultant that lost the client. Do you call the consultant immediately or do you wait and call after you meet with their client?
Our policy is to communicate freely and often with other consultants who give us the same courtesy. It seems that in every area there are consultants who are friendly and helpful -- and then there are the consultants who leave a trail of disaster in their wake.
We typically will offer what we call "veto rights" to any of the consultants who we feel would do the same for us. Under this policy, we discuss the client with the former consultant early in the process and if they ask us to lay low, we back off and let them try to mend the relationship with the client first.
The veto rights almost never come into play, because good consulting firms appreciate the information on their client situations. They often know when a relationship is tarnished and then give the OK to pursue the client.
I must reiterate here that the best way to avoid the thorny issue of losing clients is to stay in touch with your client base via newsletters.
The fanciness of the newsletter is completely immaterial. Our newsletter is produced in Microsoft Word with no fancy typesetting and it’s copied via an online printing service. The consistent mailing of your newsletter is what will increase the effectiveness immensely.
Focus everything in your newsletter on client benefit. Tips, tricks and little known facts about your product or services are a must. Again, skip the self-promotion, congratulatory articles that announce new people or office locations. Sure those tidbits can be in the newsletter, but who wants to read a whole newsletter that is nothing but an advertisement for how great you are?
Amazingly, some of the newsletters I’ve seen are 80 percent (or more) self-congratulatory, with details about some accomplishment or another of the firm’s that prospective clients couldn’t care less about.
Skip the fancy newsletter. Paying for expensive graphic designers and proofreaders and printing is great if you want to only publish once per year. Adding in all these fancy production steps usually introduces headaches, procrastination and delays. Go with a simple layout, produced in-house and distributed consistently -- and then watch your results grow.
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