How To Avoid Losing Your Biggest Client To A Bigger Competitor

Posted by Robin Robins On July 19th, 2011

Just recently a client shared with me an interesting story about how they lost their biggest client to a competitor who was charging SIGNIFICANTLY MORE for their services. This MSP told me they had given this client their personal cell phone numbers to ensure immediate response times, and had done a number of projects and fixes for free. Not too surprisingly, this MSP also charged a reduced rate in an effort to keep this cash cow client—so losing them was a real kick in the teeth.

The point I made to them (and that I want to make to all of you here) is this: You do NOT want “cheap prices” to be the main reason you get or keep clients. A client won on price will be lost on price. Plus, “cheapest price” is NOT what most clients want. They want value for money; and if you aren’t able to provide sufficient value and consistent service because you aren’t making enough profit to cover the resources in staff required, you are doing yourself AND your clients a disservice.

Second, don’t expect your “freebies” to be appreciated, especially if the client can’t perceive, see or know about the free thing you are doing. When I get a free dessert at a restaurant, I know it. If my software developer does extra work for free—and even tells me he’s done that—I have no way of knowing if that’s true or not because it’s not tangible to me. So if you want to do something nice for a client, send them a gift but don’t do free work.

And the final BIG lesson: This person lost the account to a partner they brought in to install and support the phone systems. Obviously they believed this company to be ethical and a partner, but their behavior proved to be different. So here’s the third important point—make SURE you have a strong non-compete in place with ANYONE you work with to deliver services to your clients that clearly states they are NOT permitted to sell to that client without your express written permission. I would also have that detail they cannot solicit your employees to leave your organization to work for them or another company. If possible, force them to bill through your organization so you retain control of the billing (at a minimum).