I am sure most entrepreneurs who have been in the business for a while have had to go through this ordeal at some time or other. The first time is always the hardest to get over. It just hurts in so many ways. As a startup we are dependent on a limited number of revenue generators initially. When we lose one of these primary contributors early on in our development cycle, the loss paralyzes the team. Morale drops, gloomy clouds begin to hover over everything and serious thoughts about whether we are going to make it begin to surface. I remember the first time we lost a major client in my initial business venture. A lot younger, and without the experience I have today, I did not take it very well. To the extent that I remember ending the relationship with the client on a bad note. Not the smartest of ideas. However, one tends to say a lot of things in the heat of the moment that we do not actually mean. In the world of business those words are never forgotten and chances of ever re-opening that account are slim at best.

Today however I have a very different approach when we do lose a customer. Now, when we lose a client I organize a debriefing session which covers:

1. Asking for Feedback: When a client discontinues their business with us we always send them a standard feedback form asking them the reasons for discontinuing the relationship. It is a comprehensive form that covers pertinent questions and asks them to benchmark us on several scales.

2. Objective Re-Evaluation: Revise the primary objectives that were outlined as performance indicators or benchmarks. These are what the client was measuring you with. Break down each objective and analyze whether they were specific, measurable, attainable and realistic. Then  go into each objective and measure what the client feedback was and where you over promised or under delivered.

3. Execution Challenges: Next, analyze in great detail where you experienced the greatest challenges in executing your strategies. Break down each execution error to its root cause and develop strategies to deal with them in future. Be very specific in this and identify exactly where the problem originated. Was it miscommunication or a lack of discipline from the sales team?

4. Lessons Learned: What did the business as a whole learn from managing this account. Were there areas in the feedback form where the client praised certain aspects of your business processes? What were they? Can these be transferred to other accounts to improve their experiences? What were the root causes of the break down? What can be learnt from these break downs? Spend time understanding this loss from a holistic point of view and make sure it is covered from all angles.

5. Motivation: Losing a client or a big account can be devastating for a startup or small business. It is a rude wake up call for any business. In such a scenario it is essential for the senior management to provide their employees and partners with moral support to help them through these trying times. This is one of those times when the leader needs to step up and infuse his/her passion and belief into the rest of the business. If one does not do this, the business could find itself on a slippery slope which only leads downwards.

Losing a key client can sometimes be the wake up call that a business needs when it becomes complacent and takes the client for granted. In today’s world with an ever increasing level of competition, a small business or startup needs to do whatever it can to support its key clients. Having open channels for feedback, providing excellent customer service and most importantly, understanding your customer and their needs is essential. The minute we take them for granted we open the door for our competitors to step in.

What did you do when you lost a key client? What were the strategies that you employed to make sure it did not happen again? How did you motivate your staff and partners?

I would greatly appreciate it if you share your stories and experiences.