22 Apr “The Top 10”
“The Top 10”
We have to give David Letterman the credit for inventing, or at least popularizing, the “Top 10” idea. In many endeavors, it really is a sound discipline to thoughtfully list out and prioritize the reasons that you may want to do something – particularly if what you are considering portends great impact or requires a high investment.
Some years ago, we undertook an extensive Clients for Life® implementation with a very large client in the healthcare field. Their CEO and his team had completed extensive due diligence on Tenacity. He had carefully brought his Board along with the significant client retention investment that would need to be undertaken in order to meet their number one strategic goal, i.e. reducing client attrition and churn.
As we piloted “Attitude and Action®” (Tenacity’s training module) for senior management, we covered the “Why Bother” segment, i.e. “Why is it really important to invest in getting better at retaining clients?” We were prepared to address all the traditional reasons, e.g. improved profits, enhanced reputation, employee morale, etc.
This particular CEO, however, wanted to make the “Why Bother” module a lot more personal, not only to his company, but also to himself. So, he had come to the session prepared with his own “Top 10” reasons for improving client retention. Here’s one of the 10 we’d like to focus on today:
The CEO’s reason #7 for improving retention was: “Because the thing I dread the most with my Board, is explaining why the list of lost contracts is as long as it is – or why there should even be a list in the first place.”
You can understand why a Board would want to drill deeper in to this. They’ll have legitimate questions, concerns and doubts, like:
“What is wrong with our service model?”
“Did our people take their eye of the ball?”
“Is our pricing structure wrong – is competition just willing to do it for less?
“Have we overextended?”
“Didn’t we invest a lot in selling them in the first place? What went wrong?”
Think about answering these questions for 7 – 10% of your clients every year (the typical loss rate for outsourced services providers) and you can easily see how dreadful a task this would be. Board meetings would be a lot more fun if he could proudly point to increases in average client tenure and expanding revenue and margin metrics.
When you stop to think about it – shouldn’t business be a lot more fun? It usually is when you and your people are succeeding.
“Client retention demands a formal process. If you leave client retention to chance, the chances are you’ll lose clients.”
John and Steve