How to keep B2B clients: churn, why they leave and what to fix

In June 2016, a Zappos customer service agent named Steven Weinstein took a call about an order. It lasted 10 hours and 43 minutes. He took a break partway through, and a colleague brought him food and water. Zappos does not measure call length, so nobody told him to hang up.

You should not take ten-hour calls. But notice that I am telling you about it ten years later. Nobody tells stories about a company's sales process.

Most B2B companies do the opposite. All the energy, the tools and the bonuses go to winning the client. Then the deal is signed, everybody celebrates and the client gets passed along to someone who is too busy.

And it costs a lot. How long a client stays is a direct multiplier on what they are worth. A client bringing in 3,600 a year in gross margin is worth 10,800 over three years and 18,000 over five. That is two thirds more, and you did not have to spend anything extra to win them.

Step 1: Know your churn

Churn is how many clients you lost in a period.

Churn rate = clients lost in the period ÷ clients at the start of the period × 100

Start the year with 30 clients and lose 5 of them, and your annual churn is 16.7%. Leave out new clients you won during the year, or the number will flatter you.

Then look at it in two more ways. First, in money, because losing one large client hurts more than losing three small ones. Say those 30 clients pay 180,000 a year in total. Five small ones paying 3,000 each are 16.7% of your clients and 8.3% of your revenue. One large client paying 40,000 is 3.3% of your clients and 22% of your revenue. Second, per segment, using the ones from your customer profiles. You will often find that one kind of client keeps leaving. That may be a problem with your service. It may also mean you should stop selling to them.

Some churn is natural. Companies go bankrupt, get bought and change direction. What matters is the part you could have prevented.

Step 2: Find out why they really left

The reason in your CRM is usually wrong. "Too expensive" often means "we did not see enough value", and "changed priorities" can mean almost anything.

• Call them. Do it yourself if you are the founder. Say you are not trying to win them back, and that you want to learn. Most people are surprisingly open, and some will thank you for asking.
• Send a short exit survey if there are too many to call, with one open question.
• Read your complaints and support tickets from the months before they left. The warning signs are usually there.

Write down the real reason for each client. After ten or so you will see patterns.

Step 3: Spot it before it happens

By the time a client tells you they are leaving, the decision was made months ago. Your best chance is to see it coming.

Every month, we go through every paying customer at MuchSkills and put each one in one of five groups: healthy, at-risk, dark, renewal-imminent or churning. It is based on what they pay, what they do in the product and when we last spoke. It takes little time, and it tells us who needs a call this month.

The most useful of these is "dark". A client who has gone quiet is not a happy client who does not need you. Silence is the most common warning sign in B2B, and it is easy to miss because nothing is on fire. Your champion may have left, or the project may have lost its owner. Call them.

You can do this in a spreadsheet. Define your own signs: how often they use what you sell, whether your main contact is still there, whether they answer, when the renewal is, whether anyone has complained.

Step 4: Fix the causes

Now choose what to do, based on the reasons you found. Some typical ones in B2B:

• They never got going. Onboarding is where most clients are really lost. Agree with them what success looks like, and get them to the first useful result as soon as you can.
• Your champion left. Know more than one person at every client. When a new person starts, treat it as a new sale.
• They forgot what you do for them. Show it. A short review once or twice a year, with what has been achieved, is worth a lot at renewal time.
• Nobody owned the relationship. Give every client a named person. In a small company, write down who it is.
• They could not see where the money went. Be clear about costs, process and outcomes.
• You sold to the wrong client. Then the fix is in sales, not in service. Go back to who you say no to.
• You kept doing the same thing. What a client needs changes. Eric Bengtson at Sourcing Allies has worked with us for seven years, and in his words the work has shifted "from generating leads to attracting the right ones".

Make sure there are regular check-ins with open questions, and act on what you hear. Consider Net Promoter Score after a milestone, or a small advisory board with your best clients. The tool matters less than whether anyone responds to what comes in.

Then get help from the people who stay. Happy clients are where your best referrals come from, and there is more on that in how to turn customers into fans.

Step 5: Give them something to tell

Fixing what is broken will stop people leaving, for a while. A client who is merely satisfied still leaves when someone cheaper comes along, and nobody talks about a supplier who was fine. Two stories show what changes that.

In 2010, Will Guidara was running Eleven Madison Park in New York, then one of the best restaurants in the city. One lunchtime he overheard a table of tourists saying they had been to all the great restaurants but had never had a New York street hot dog. He ran out, bought one from the nearest cart and had the kitchen plate it up properly. They told him it was the highlight of their whole trip. He went on to create a job in the restaurant for coming up with ideas like that, and he tells the story in Unreasonable Hospitality. The way he puts it: "I was in the business of serving them memories."

At the Ritz-Carlton on Amelia Island, Chris Hurn's son left his stuffed giraffe behind. To get his son to sleep, Hurn told him that Joshie was having a little extra holiday. Then the hotel called: the giraffe had turned up in the laundry. Hurn asked if someone could possibly take a photo of it by the pool, to back up his story. A few days later a package arrived with Joshie, some gifts and a binder of photographs: Joshie sunbathing by the pool, having a massage in the spa and helping out on the security cameras. Hurn is still telling the story years later, and now you have heard it too.

The hot dog cost about two dollars. The giraffe cost a few hours of someone's time. What made them possible was that someone was listening, and was allowed to act.

In B2B, your hot dog will look different. You notice that your client is presenting to their board next week, and you send them a one-page summary of what has been achieved. Your champion moves to a new company, and you send something useful for their first week. Someone mentions a problem that has nothing to do with what you sell, and you introduce them to a person who can help. Make it somebody's job to notice these things, and tell your team they do not need permission.

Step 6: Write a plan you can follow

Keep it to one page:

• Your churn today, overall and per segment, and what you want it to be
• The three main reasons clients leave
• What you will do about each, who owns it and by when
• How you will measure it: churn, revenue kept, satisfaction
• When you will look at it again

Share it with the team, and go through it every quarter. Everyone should know who owns what.

This is step six in how to win new B2B clients. If you only do one thing this week, list the clients who have gone quiet and call three of them. You will learn more from those calls than from any dashboard.

If clients are leaving and you are not sure why, talk to us at Up Strategy Lab.