Navigating Client Retention (part 1): Key Strategies for Surviving and Scaling in Any Business Environment

Part 1: Getting Gritty with It

• Part One > 📌 You are here.

• Part Two

No matter the size or stage of your business, the macro environment is impacting everyone right now. What’s important to remember is that your clients aren’t worried about your business, they’re focused on their own. It’s a good time to get “back to the basics” and make sure you’re providing your clients with real value.

How one company survived 

In the Hard Things about Hard Things, Ben Horowitz talks about leading Opsware. 90% of the company’s revenue was tied to one client: EDS. The main stakeholder was frustrated with Opsware and was going to terminate the relationship. They had 60 days to turn things around, or the company would collapse. Ben asked the Client Success Team to work with the client, fix any bugs and present the value of the product, while also discovering what the stakeholder was really excited about. 

The team held daily standups, flew out to visit with the client every week, and was completely focused on making Opsware truly valuable as a product to EDS. During this time, the Opsware team discovered that the main stakeholder loved a company called Tangram that had a solution completely unrelated to Opsware. The stakeholder was about to lose access to Tangram's solution due to an internal deal that was forcing his hand. 

It was crunch time. Ben looked up Tangram and was shocked to see that they were a small public company worth $6M. He wanted to buy the company and offer their solution for free to the main stakeholder of EDS, but the Board and his team were against the purchase for a variety of reasons. Some of the reasons were logical, but it didn’t matter. The stakeholder wanted Tangram. 

Ultimately, Ben’s board agreed and Opsware bought Tangram for $10M and combined it with the Opsware product, offering it to EDS for free. This unorthodox move ended up pleasing the stakeholder who renewed their agreement, saving the company. 

Hewlett Packard eventually purchased Opsware for $1.6 Billion. Ben and his team found a way to survive in the short term while winning big in the long term. 

The ultimate lesson: Get out in front of your clients to truly understand what your stakeholders care about and solve their challenges.

Even though it’s a tumultuous time in the business world, it’s important to remember the basic lesson of doing business; If you take care of your clients, they’ll take care of you.

Roadmap for Retention

Looking for six simple steps to retaining important clients? Start here:

• Leadership involvement. Client retention should NOT be outsourced. Ben held daily stand-ups with his Client Success Team to make sure everything was on track to renew the agreement

• Get in front of your clients asap. If you don’t have a monthly check-in on the calendar, set up a call with the necessary stakeholders as quickly as possible

• Focus on the well-being of your clients and stakeholders. Ask if they’re making (or plan to make) any changes to their business. Ask what they actually care about. Listen to their responses and adjust accordingly

• Circle back to the original pain point your client was solving for. As a reminder of why they’re doing business with you, but also understand how much that pain point matters to your clients if they stopped working with you today

• Logo vs Value. In the scenario, your client is terminating its relationship with you. Understand the value of salvaging the logo for your business’s reputation. If you’re a startup, the logo could be of real value to you. If it makes sense, find a short-term solution to retain the client (discounts) until you can get the client back up to standard rates

• Get Creative - We can’t all buy a company and bundle it with our offering like Ben did in his story, but things like market insight reports and consulting services are doable. Figure out what your client would value most and deliver it 

In Part 2 we’ll be discussing how to set up your organization for client retention as you bring on your next batch of new business.