Client Relationships:  11 Signs of Danger

BY: Daniel M. Savage


Strong relationships are essential to retaining your profitable clients.  As such, it’s important to have a means of determining whether a given relationship is truly solid…or…in decline. 

Clients are often reluctant to share their dissatisfaction in a discussion;  rather, they are more likely to signal it by gradually inviting more of your competitors to submit proposals.  They may even begin awarding business to them. 

So, how can you identify potential relationship problems?  Here are eleven warning signs that are often associated with relationships in decline.

  • Your revenue from a given client is decreasing. Although there may be unrelated reasons such as a client’s financial, industry, or marketing issues, be mindful that relationships rarely remain static.  They either progress or retreat.  That said, you may want to look more closely if revenue is decreasing over time.
  • You’re the last to learn about new strategies or projects. Strong relationships are associated with excellent communication.  In a business setting that means sharing plans and even seeking someone’s counsel.  If you’re among the last to learn about new developments, you may not be as relevant or trusted as hoped.
  • Unreturned telephone calls or emails. Clients can be extremely busy and therefore unable to respond in a timely manner, but there could be more to it, particularly if this behavior is increasingly common.  Remember that clients who trust us and value our services will generally be prompt, even eager, to communicate with us.
  • Your competitors are becoming more visible. If your client is utilizing known competitors for new projects or new competitors are suddenly appearing, it may indicate that your influence and perceived value are declining.
  • Your relationship manager routinely claims that all is well and never asks for help. While this may seem reassuring, please remember three things.  First, even the best of relationships hits an occasional, minor speed bump.  Second, relationship managers almost always need help of some type, particularly if they care about continuous improvement.  Finally, this returns us to a point made above in #2:  Strong relationships are characterized by excellent communication. 
  • Your relationship is dependent upon one senior manager or executive. It’s wonderful to have the trust and respect of a key senior manager, but what happens if that individual leaves the firm or changes roles and is no longer in a position of influence on your behalf?  Broadening your relationships to include other key influencers and decision makers is one effective way to avoid ending up out in the cold.
  • You are being micro-managed by your client. Is your client second-guessing every suggestion, frequently checking your work, or permitting little if any autonomy?  If so, your client may not trust you or your ability to deliver as promised.  Given that trust is the cornerstone of every relationship, you will not be able to deepen your existing one, let alone gain the trust of additional senior managers essential to growing that relationship.
  • You are frustrated with the relationship. Why should that matter if your customer is pleased?  If you are unhappy, you will be hard-pressed to maintain enthusiasm over time, and that will eventually lead to less than stellar service delivery and customer loss. Determine why you are frustrated and what needs to be addressed to effect a significant positive change.

  • A given relationship consumes more resources and time than you anticipated. If the relationship is substantially unbalanced in favor of the client (i.e. insufficiently profitable or unfairly detracts from your ability to properly serve other clients), something is wrong and needs to be changed. 

  • Price gradually becomes the primary or sole determinant of winning new business. Unless your primary business strategy is to be the low-cost provider, this is a particularly bad sign.  It clearly indicates that you are not adding any other type of value to the relationship.

  • You have no trusted advisor relationships with your client. This unfortunate situation is exacerbated if no one at a client firm wants to have a meaningful relationship with you.  This means that you are merely a vendor who can be shown the door at any time and who will be relegated to competing for new business on a cutthroat RFP basis. 

Sometimes even strong relationships are temporarily marked by one of the above signs.  Nevertheless, if two, three, or more are present, it’s time to examine your relationship…and relationship philosophy…much more closely. 

"Trust is the glue of life.  It’s the most essential ingredient in communication.  It’s the foundational principle that holds all relationships."

~Stephen Covey
 

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