Why Customers Dump Their Vendors

Posted October 13, 2011 by Chris Burgoyne / Consulting, Teachable Moments Why Customers Dump Their Vendors

"The day you sign a client is the day you start losing them." - I think I heard it on TV.  It's a platitude, of course. We know just as surely that  each day takes us closer to our eventual death. It may be true, but not really useful. But if we accept that business relationships are not permanent, we can also agree that sometimes they end prematurely and unfortunately, acrimoniously. Like our lives, we want our business relationships to be as long and pleasant as possible.

Most if not all of the sales books I've ever thumbed through take as gospel that business relationships are more about relationships than business. It's the old saw, "It's not what you know, but  who you know." But there is something that differentiates the business relationship from the purely personal. Brad Shorr argues on his Internet Marketing blog, that the difference is the up front assumption that business relationships are mutually beneficial. This leads to his golden rule: "Never further your interests at the expense of the other party’s."

You don’t have to be Mother Theresa in your business, far from it.  Your client knows that you're out to make a buck, but they must trust at the end of the day, that their success is important to you. Dan Boehm writes that communication is critical to keeping your customers from dumping you. Vendors must be crystal clear - and accurate - in what they promise. Over-promising and under-delivering is, at heart, a communication issue.

"Insufficient clarity is at the heart of most poor client-consulting relationships (Ford, 1985). Failure to communicate, to identify the real problem, promising too much too soon, failure to specify roles and recommending unfeasible actions will all jeopardize the engagement."

No kidding?

The divorce rate in the United States is close to 50% - and marriage is supposed to permanent! So a consulting gig, which no one thinks is permanent, might be more analogous to a rodeo ride.  If you can hang in there for 8 seconds, you're doing great! So, we’ve established that our business depends on relationships, and relationships depend on communication, but as I think about it, I can think of lots of times when the communication was bad, but we certainly didn’t get fired all the time.  (Maybe we should look at why we DON'T dump our vendors. Sometimes it's just too much hassle!  If you’re telling yourself not to worry about the client because they can’t afford to get rid of you, you’ve got a bigger problem. )

Bottom line: Consulting relationships, like personal ones, require attention and TLC. Build that TLC into your schedule. Schedule regular sit downs with your customer to take their pulse. Emotionally, professionally, project-wise, and everything-wise. If they're unhappy, it's better to get it out in the open sooner rather than later. At Vision Point Systems,  success has come when we structure our projects to focus on our customers' needs (even the ones they might not know about), eliminating obstacles, and solving critical problems.  In simpler terms, we've been able to repeatedly help clients in such away that they agreed more than once that our time was worth paying for, a result that is only possible when there is earned trust.

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