Have you ever lost a client to a competitor? If so, you’re not alone.
Many professionals assume that client turnover is an inevitable part of doing business in B2B industries like law, accounting, management consulting or engineering consulting. But this is incorrect. Beaton’s 20-plus years of research into client preferences finds that, in most cases, client attrition and client churn are completely preventable.
Stop losing clients by focusing on improving your client experience (CX), utilising feedback programs and closing the feedback loop. In this article, we explore the keys to improving CX and boosting client loyalty, while avoiding common pitfalls for professional services firms.
Why firms lose clients
Firms lose clients for several key reasons, many of which are preventable with the right strategies. Understanding why firms lose clients requires an understanding that the B2B professional services industry is highly competitive and has grown increasingly crowded in the past decade.
Research by Beaton into client preferences over the past two decades shows firms are competing for business by offering more value to clients than ever before, but prices have not risen at the same rate. Clients want (and are receiving) more for less – and they are willing to shop around to get it. For firms, this translates to client churn if they do not build the kind of client service offering that makes clients want to stay.
In this context, client retention is crucial for business. If firms don’t offer the best value and outstanding CX, it’s highly likely a competitor will come along and poach their client.
Our research finds some of the most common causes of client attrition due to poor CX include:
- Failure to meet client expectations
- Poor communication or engagement with clients
- Failure to close the feedback loop
- Unresponsive management of client complaints
- Inconsistent service quality
- Perceived value issues
- Overlooking the importance of personal relationships.
It’s important to note that price is not the major reason you’re losing clients.
Beaton Benchmarks data consistently highlights that price is not the primary driving factor for clients choosing to leave a firm. The more relevant factor is value. That is, if clients feel they are receiving value, they are willing to pay higher prices, return for more work with you, and still report an excellent experience.
Why client attrition is so costly
Client attrition – the loss of clients over time – poses significant financial challenges for professional services firms. Every client represents a revenue stream to a firm, and losing a client directly reduces income by taking away that revenue stream.
In the case of B2B firms, many of whom work regularly with a small number of major clients who bring in a lot of business, the loss can be particularly detrimental. Beaton partner Paul Bonomy estimates the dollar value can stretch into the millions. For a mid-tier law firm, for example, a key client might generate between a quarter of a million and a million dollars a year. Needless to say, it represents a major dent in the income statement if that client leaves.
Harvard Business Review estimates it can be up to 25 times more expensive to acquire a new client than retain an existing one. There’s the immediate impact on reduced firm revenue as well as additional future costs involved in marketing, business development and onboarding new clients. Not to mention the potentially catastrophic reputational costs to a business of dissatisfied former clients telling others about their negative experience.
But the costs of poor CX begin to impact a firm before the client takes the final step of leaving. Beaton partner Paul Hugh-Jones explains that “a lot of margin and dollars are lost at firms from write offs” – where dissatisfied clients refuse to pay for work done and the firm must write it off as an expense.
“There’s a very high correlation between client dissatisfaction and write offs,” Hugh-Jones says. “They might say, ‘that was rubbish’ or ‘we didn’t talk about that’, or simply, ‘I don’t think the advice was very good, I’m not paying for it’.
“By improving CX you can save a client from walking away, but you can also minimise write-offs. The additional benefit is that once you have happier clients you often have happier staff, because they’re not having to deal with all that negativity.”
Pouring in effort, but profits slip away – collecting feedback to improve CX stops you losing clients before revenue starts to drain.
The key to reducing client churn: improve your CX
Improving the client experience means improving the overall perception clients have of your firm, based on every interaction they have from initial engagement to ongoing service and support. This is an evidence-based way to reduce client churn, boost loyalty and grow your business through referrals and additional work – without huge costs of acquiring new clients.
Beaton’s research into client experience in professional services shows how firms creating superior CX have happier clients and perform better across key business metrics. In this study, the firms with the best CX reported higher volumes of repeat business and were able to charge higher average fees than firms just developing their CX.
Through our annual benchmarking research study, Beaton Benchmarks, we have also tracked client satisfaction scores across hundreds of firms in Australia and New Zealand since 2011. By analysing 129,000 client ratings and comparing them to the level of CX maturity in the firm, we discovered firms excelling in CX achieved 34 per cent faster growth in client satisfaction scores than those with underdeveloped CX programs.
Firms that create superior CX for their clients have happier, more satisfied clients who are more likely to return for ongoing work with a firm. This trend prevails even when a firm is paying a “premium” – that is, higher than the average market rate.
How to improve professional services CX
Collect and act on client feedback
If your firm is experiencing client attrition, it’s time to look at your client complaints management. Implementing real-time feedback programs such as surveys, NPS and client interviews can help you identify when a client is in the early stages of dissatisfaction and equip you to intervene before it’s too late.
“The power of client feedback is being able to action the micro – to have your finger on the pulse and identify anything small that can develop into a bigger problem if not addressed,” says Paul Hugh-Jones.
“Being able to action that feedback and lift client service is incredibly powerful for CX. By fixing pain points you can lift client service within a matter of months.”
Research published in “The State of CX in Professional Services” report found firms with the best CX had formal feedback collection processes in place, and almost half (46 per cent) surveyed their entire client base for feedback. This compares to one quarter (25 per cent) of firms with less developed CX.
Among succeeding CX firms, 84 per cent of respondents agreed that client feedback was used to make strategic choices, compared to 71 per cent of developing firms.
Closing the feedback loop
Closing the feedback loop means acting on client feedback, responding to the client and letting them know their concerns have been addressed. Firms with robust client feedback programs in place close the loop to continuously improve their service delivery.
In our State of CX research, closing the loop was a focus for 80 per cent of firms with excellent CX, compared to 58 per cent of firms developing their CX.
Paul Hugh-Jones says closing the feedback loop in a way that makes the client feel respected and seen is crucial.
“If you find you have a negative feedback response from a client, you should pick up the phone and apologise rather than write an email back,” he says.
“Phone calls are dying, so you can actually stand out just by picking up the phone to somebody nowadays. If it’s a significant issue, you might suggest meeting the client in person and bringing the managing partner to show them this is a priority.
“It’s easy to get angry or be misinterpreted via email, but human beings, once they get face to face, are going to work to compromise.”
Use data and technology to continually monitor CX
Asking for feedback in person is resource-intensive and time-consuming and often reveals less about your firm, as clients are unlikely to share their honest and full reflections face-to-face. This is where data systems and feedback technology can be critical for improving professional services CX.
Leveraging technology such as client feedback software that sends regular surveys to your client base can help you keep your finger on the pulse with less effort. Detailed reporting metrics make collecting and actioning client feedback much easier, and immediate alerts enable you to action minor issues whenever a client raises them. Maintaining an up-to-date customer relationship management (CRM) system or key account management (KAM) program to keep track of long-term relationships can also be game-changing.
“When we look at key drivers of dissatisfaction among clients of B2B professional services, it’s not usually to do with advice or expertise,” says Paul Hugh-Jones. “It is more often that you have not provided tailored service or shown care for their specific needs.
“In that case, you will see warning signs well before they decide to leave. If your feedback systems are set up properly, you will be alerted early, with ample opportunity to show you care, provide a tailored solution and rectify the situation.”
How Beaton Debrief supports firms to enhance CX
Many firms understand the value of improving CX using the methods above, but struggle with execution. The most common barriers we see are:
- Limited time to develop and implement structured feedback systems
- An uncertainty about what questions to ask and how to gather client insights
- Lack of internal resources dedicated to feedback and complaints management.
This is where Beaton Debrief can help.
Unlike other tools on the market, Debrief is the only software designed specifically with B2B professional services firms in mind. It combines the power of self-service survey analysis via a powerful analytics dashboard, with research expertise and support from Beaton’s highly experienced team. Firms that are uncertain about the questions they should be asking are supported fully through survey design, as our team builds and advises you on the best times to collect feedback, based on our knowledge and experience over two decades of researching clients.
Once set up and tailored to your needs, Debrief helps by sending out regular surveys to clients and presenting their feedback back to you via an intuitive, easy-to-navigate dashboard. If a client expresses dissatisfaction, the system will trigger an immediate alert, prompting your timely intervention to prevent potential client loss.
Benefits of Beaton Debrief compared to other feedback tools:
- Systematic, simplified solution for feedback collection: Surveys can be sent at key milestones during, before or at the end of a project, ensuring client concerns are addressed before they escalate.
- Real-time data analysis: Responses appear instantly in an intuitive dashboard, helping users spot trends and risks early.
- Customised reporting: Insights can be delivered to users across all levels of your organisation, ensuring CX remains a priority.
- Case management for closing the loop: A built-in case management system flags dissatisfied clients, prompting you to act and notifying you until feedback is actioned.
- Hands-on design and implementation support: Beaton Debrief combines the best features of traditional platforms with hands-on support to manage your feedback program.
Conclusion: Take action to stop losing clients
In the highly competitive landscape of professional services, reducing client churn is no longer just a goal – it’s a necessity. Firms that fail to prioritise client experience (CX) risk losing valuable relationships, revenue, and reputation. However, as Beaton’s research consistently shows, client attrition is largely preventable. By actively listening to clients, closing the feedback loop, and leveraging data-driven insights, firms can create a service experience that fosters loyalty and long-term engagement.
The research is clear: firms that invest in CX will outperform their competitors, command higher fees, and cultivate lasting client relationships. With the right tools and a strategic approach to client feedback, firms can stop losing clients and start building a stronger, more sustainable future.
Regular client feedback at your fingertips
Use our platform, Beaton Debrief, to collect client feedback and act on it in real-time with our interactive dashboard. Sign up for a free trial today.
