What’s the key to client loyalty? Diagnose their dissatisfaction

If you work in professional services, you know it costs a lot to lose a client.

There’s not only the impact of reduced firm revenue now and in the future. There are also the operational costs involved in offboarding a lost client, the acquisition costs of finding new clients, plus reputational costs to the business caused by disgruntled former clients sharing their bad experiences with others. 

Harvard Business Review has estimated it costs up to 25 times more to acquire a new client than to retain an existing one. Partner at Beaton Paul Bonomy says the actual dollar figure can reach into the millions.

“For a mid-tier law firm, a big client might generate between a quarter of a million up to a million dollars a year,” Bonomy says. “For bigger firms, their big clients might generate 10 to 20 million dollars a year. Losing that amount of revenue is not something to sneeze at.”

With so much at stake, it is vital that firms invest time and resources to retaining clients and enhancing client loyalty.

This starts with identifying and addressing dissatisfaction before it escalates. Tools like Benchmarks and Beaton Debrief, our client feedback tool, can help firms uncover dissatisfaction, pinpoint its causes, and create data-driven client loyalty strategies.

Diagnosing dissatisfaction is essential

Recent industry CX research by Beaton reveals that 89 per cent of clients will no longer consider using a firm after a poor service experience.  While this may not be surprising, it highlights the importance of firms prioritising identifying and addressing client dissatisfaction.

Imagine you hire a service provider, and they have poor communication, there are delays, or you get stung with unexpected fees. You would likely take your business elsewhere and warn others against using the same provider.

In professional services, dissatisfied clients react the same way, quietly seeking alternatives.  Frustrations that might seem small initially can build over time, leading a client to feel frustrated and undervalued. Eventually the client will seek a new provider without the firm’s knowledge.  When they finally leave, the reasons for leaving may remain unclear. This means there is no opportunity firm to address the issues or stop them from happening again.

The challenge lies in diagnosing dissatisfaction proactively and addressing the root cause in a client-centric way. Without understanding the reasons for client unhappiness, firms risk investing in scattergun solutions that fail to address core issues. Worse, dissatisfaction left unchecked can lead to lost revenue and even damage the firm’s reputation.

How to find unhappy clients with feedback

Client feedback can help firms identify and address dissatisfaction. It allows firms to go beyond assumptions, leveraging data to uncover critical insights.

Feedback helps answer key questions, such as:

  • Do you have dissatisfied clients?
  • What percentage of your clients are unhappy?
  • Which types of clients are most likely to experience dissatisfaction?

Feedback can take many forms, from structured surveys to informal conversations. The key lies in gathering insights consistently and analysing them systematically. This can help firms identify patterns in client responses and recognise recuring issues that need addressing before it’s too late. 

Structuring feedback the right way can help your firm go deeper to understand the root causes of dissatisfaction. The aim should be to understand the “why” behind client frustrations. This enables firms to gather actionable insights that inform targeted interventions and help them design and implement improvements in the areas that matter most to their clients.

How to find unhappy clients with feedback

Net promoter score (NPS) is a common metric tracked by firms to understand how likely clients are, on average, to recommend a firm to a friend or colleague. Read our guide to measuring NPS here.

But the average score is just that – it will only find the middle number between dissatisfied and satisfied clients and cannot home in on the source of dissatisfaction.

Programs like client feedback benchmarking or industry initiatives, such as The Client Choice Awards, provide an external lens to analyse the drivers of dissatisfaction. Tools like this enable firms to compare their performance against industry standards and pinpoint areas where they lag competitors.

What this dissatisfied client report does is it allows you to focus your remediation efforts on specific client segments and specific issues they are facing.

Are your clients dissatisfied?

To go deeper, Beaton developed a specific feedback tool – the Dissatisfied Clients Diagnostic Report – to capture your frustrated clients’ views in detail.  This Report enables firms to rank the key drivers of dissatisfaction by their importance to clients.

This data-driven approach empowers firms to focus their efforts on the attributes that have the greatest impact on client loyalty, leading to more efficient and effective strategies for improvement.

Beaton partner, Paul Bonony explains how the Dissatisfied clients report works. 

“First we need to understand whether your firm has dissatisfied clients – that’s the first question. If so, what proportion of the client base and what type of clients are dissatisfied?” Bonomy says.

“Once we have discovered the proportion and profile of clients who are unhappy, we can figure out how much revenue they bring in each year, what sectors they operate in and what sort of work you do for them. So, then we can start to analyse whether you need to respond and if so, how.”

The best part, Bonomy explains, is how “the report pinpoints the source of your client loyalty (or lack of it). The data ranks key drivers of dissatisfaction by attributes such as reliability, communication, quality documentation, responsiveness, innovation and fee perception by their order of importance according to your clients”

(Spoiler alert – it is almost never fees that causes clients to leave.)

“Your firm can then build a highly focused, efficient, and data-driven strategy to improve the attributes that clients value most.”

What makes clients unhappy with the service?

The dissatisfied Client Report identifies the following key drivers of dissatisfaction, providing participating firms with their performance in these areas compared to their competitors. 

Drivers of satisfaction and dissatisfaction

What’s the key to client loyalty? Diagnose their dissatisfaction

Source: Actual firm’s client data

“What this dissatisfied client report does is it allows you to focus your remediation efforts on specific client segments and specific issues they are facing.” Bonomy says.

“So you’re not just offering a costly or time-consuming one-size-fits-all solution, which may not even work. With this tool, you can do something specific to address the problem – it allows you to allocate scarce resources to focus on a problem this is clearly articulated.”

Participants in The Client Choice Awards can rely on honest insight data as results are benchmarked against a firm’s competitors by a third party (Beaton), rather than clients responding directly to narrow surveys or questions sent out by your firm.

Diagnosing dissatisfaction in real time

Client feedback tools also play a crucial role in uncovering dissatisfaction, offering unique advantages that complement benchmarking insights by capturing detailed, real-time feedback directly from individual clients.

Surveys can help firms collect insights continuously or at critical points in the client journey, such as after project milestones or service engagements. This real-time data allows firms to spot problems early and address client dissatisfaction before it escalates or impacts retention.  By understanding specific concerns, firms can act to resolve their issues, strengthening relationships, and making clients feel heard and valued. 

Ultimately, feedback tools complement benchmarks by adding depth and context to client satisfaction data. Where benchmarks reveal broad patterns and trends, identifying what matters most to your clients, feedback tools dive into the specifics of why clients may be unhappy. Together, they provide a comprehensive understanding of client needs, enabling firms to respond effectively and retain client relationships.

A proactive approach to client loyalty

Research by Frederick Reichheld of Bain & Company has shown increasing client retention rates by just 5 per cent can increase profit by 25 per cent to 95 per cent. Proactively addressing dissatisfaction through client feedback is an effective way to achieve this.

Really, firms can’t afford not to diagnose their dissatisfied clients.

Feedback is not just about fixing problems; it’s about creating opportunities to strengthen client relationships. Listening to clients helps firms understand their concerns, and take action to turn dissatisfaction into loyalty and secure their position in a competitive market.

Rather than waiting for clients to leave, firms that prioritise feedback can build trust, loyalty, and a reputation for client-centric service. This is especially critical in today’s competitive landscape, where dissatisfied clients have more options than ever to find an alternative.

What is the best way to diagnose dissatisfied clients?

That depends on several factors.  A quick chat with one of Beaton partners can help identify the best solution for your firm.

NOTE: In keeping with Beaton’s confidentiality undertakings, individual clients and their organisations are never identified in blog posts or example studies.

See how clients view your firm and where you stand against competitors

Participate for free in the largest, most comprehensive client sentiment industry benchmarking study in professional services.

Share these insights with a colleague
LinkedIn
Email
Twitter
WhatsApp