If there’s one message you dread more than anything else in your business, it’s a message from your client requesting to cancel their service.
This is amplified greatly when it’s a high-paying client. If you’ve not been careful, the client requesting to cancel could represent 20% or more of your recurring income. Losing that much revenue can have a big impact on your business.
So, why do great clients leave? Let’s talk about it.
The impossible dream
In an ideal world, no one would ever leave or cancel your services.
You might be sitting there thinking you’ll achieve the impossible dream because your business is different. Perhaps you’re lucky, and you haven’t experienced a client leaving or cancelling their services.
If that’s you, I commend your willpower and spirit. It’s good to have the confidence that your business is different. But you need to make yourself aware of the realities of working with clients.
The natural life cycle of client work means that every project or service will come to an end at some point. If you care about recurring revenue, your goal is to maximise the length of time a client stays with you.
Reasons why clients choose to leave
There are four key reasons why a client chooses to leave or cancel. These are performance, price, needs and communication.
I’m going to break each of these elements down further so we can look at each in turn and what you can do to improve client retention.
Performance is easy
If a client requests to leave because you’ve not delivered on a promise, this is easily understandable for most business owners. Sometimes, you’ll make a mistake, or you were a little over-eager in promising something that you couldn’t quite deliver.
I made this type of mistake a fair bit in my early agency years. I was excited to work with new clients, and I promised we could help their businesses achieve great things.
In reality, I wasn’t charging enough for my time and it was a case of juggling the extra time I was spending with the money received. Most businesses were still happy with our results, but a few clients were unhappy that promises weren’t kept, and they chose to leave.
Having a learning experience like this helped me to fine-tune my processes and tone down my eagerness. By listening more and knowing the value of my work, I increased my rates and made promises that I knew could be kept.
Performance is the easiest thing to get right. If you delight your clients, help them reach their goals and deliver great work, you will be in a good place.
Price doesn’t matter
Competing on price is a bad idea for pretty much every agency. As soon as you choose to compete on price, you’re taking a slippery ride down the log flume of profitability.
Your clients’ budgets will go up and down depending on the health and success of their business, as well as external factors in the world. Sometimes, a client’s position will deteriorate to the point where they can no longer afford your services.
If a client wants to leave because they can genuinely no longer afford your services, there isn’t much you can do. Perhaps you can tweak your offer and remove some services to meet their budget, but it’s not always feasible.
The clients to look out for are those who say they can get your service cheaper elsewhere. Here, you have an opportunity to educate them and remind them of the value you offer. Ideally, you’ll have been doing that from the first moment they signed a contract with you.
Make sure you take time to celebrate wins with your clients. When you help them to achieve a goal or reach a milestone, share your delight. It shows your client how valuable you are and that they’d be insane to cancel something that helps their business.
Needs will change
Every business will change direction at some point in its lifecycle. For some businesses, this could be a small change or a new product. For others, they may choose to target a completely new niche.
This happens with agency owners all the time. Most agencies start out targeting “everyone” as a potential customer. Over time, they may find an industry that they love working with and choose to focus on customers in this industry.
If you have a client who wants to leave because their needs have changed, this is a fair reason. However, there may be an opportunity to offer another service to them. Perhaps there’s something else you offer that perfectly matches the new direction their business is heading in.
Mel and I are no strangers to customers who have a change of direction. We don’t get many cancellations from Nurture Copy, but when we do, it’s usually either because an agency is changing direction or they’re handling copywriting in-house.
(Funnily enough, most of them come back to our services within a year or two. So we’re obviously doing something right)
Communication is key
Communication isn’t always referenced as a reason for a client cancelling, but it’s something that contributes heavily.
When you’re working with clients, they’re trusting you to deliver great work for their business. This work is often for a four or five-figure sum. It’s not pocket change!
It’s very easy to focus on the work and take your eye off the ball with your client communication.
The problem with this is that your clients appreciate updates. They want to know how their new website is progressing. They’d like to understand the results of your SEO work. They want to hear how their email marketing encourages customers to purchase again.
For ongoing client projects, your best option is to send a weekly email. There’s a great podcast episode from The Admin Bar that talks about sending a weekly email. I highly recommend giving it a listen.
After your client projects are finished, it’s important to continue communicating with your clients. We’ll look at how you can do that effectively in the next section.
How to communicate better with your clients
Communication is one of the most powerful tools you have to build better client relationships.
People choose to work with you because they trust that you can help deliver their goals. Whether it’s a new website, more sales or social media growth, they trust you to guide them.
As we’ve just looked at, regular communication during a project is an excellent step on the path to success. It helps your client understand how things are progressing, and it keeps your relationship with them healthy.
But what about after your project ends?
A lot of agency owners finish a project and move on to the next one. This is great for your bottom line, but you’re missing out on something crucial – building stronger relationships.
For a client to work with you, they’ve reached a stage where they trust you. Assuming you did a great job (and I’m sure you did), this trust will only grow.
So, when we think about sales, we must consider that people buy from those they trust. When clients already trust you, they’re perfectly positioned to purchase from you again.
For example, if you’ve delivered a new website to a client, your next step could be to sell SEO services. It’s an easy upsell as you’re generating traffic for their business, which will lead to more enquiries or sales.
The easiest way to communicate with your clients on an ongoing basis is through email marketing.
I wrote a blog post on why email marketing is important for agency owners over on The Admin Bar’s website last week. If you haven’t seen it yet, make yourself a coffee and give it a read.
Email marketing can be scary for some agency owners as they don’t know what to write or they don’t feel like they have enough time.
It’s a lot easier than you think to get started. Each email you send can be as short as a few hundred words.
Your emails will share valuable tips and advice with your subscribers. You’ll point them towards interesting industry news and articles that affect their business. You can ask questions and gather feedback, helping to improve your products or services.
And, if you’re really stuck? I can help.
Mel and I run Nurture Copy, where we’ve helped over 500 agency owners like you with their email marketing.
After three years of running our service, we recently streamlined everything into a new subscription – Nurture Club. It’s our best offer at the lowest ever price. Check it out if you want to make email marketing an important part of your business in 2024.
Don’t be the ‘difficult one’
There’s one last thing that I want to share, and it’s important because it defines how people will talk about you in the future.
Some client relationships will end. It’s a simple fact, and we’ve talked through some of the key reasons as to why.
There are many occasions when agency owners take over a website or marketing project. Their new client has chosen to switch from their previous provider.
Many of the horror stories you’ll hear are where the client’s former provider is being difficult. You’ve probably experienced some of these yourself.
For example, the former provider may be holding a domain hostage. They may want to charge a high fee for access to something. They could be unresponsive and refuse to communicate with the client.
Anyone who behaves in this way is showing a complete lack of professionalism. It’s typically led by anger or frustration. A reaction that occurs without someone taking a step back and a deep breath.
You may not like that the relationship is ending. You may disagree with it. However you feel, you have a chance to end things with kindness.
If a client chooses to leave, be professional and polite. It makes a world of difference, and it’s the right thing to do, no matter how upset you truly feel inside. You can charge a fair price for your time if it’s needed; just don’t hold anything hostage.
The client will have a positive experience, and they’ll remember how you acted. It’s not uncommon for them to come back a few months or years later because they realised the grass wasn’t greener elsewhere.
There’s zero chance of anyone returning if you made the transition a horrific experience.
You’re also making work easier for the person taking over your former client’s services. This might not seem important to you, but the world is better when we have good relationships. There’s no reason to create a bad one unnecessarily.
Never a truer word – well said Matt.