Top 10 Reasons Why Professional Services Firms Lose Big Clients

In a time where the competitive environment for professional services firms is like a busy parking lot at Costco on Sunday, it’s important clients choose a firm that utilizes the best practices. Oftentimes, companies and personnel have their own style and measure for success, but sometimes partnerships between client and consultant can run sour, leaving the client wondering “Did I make the right move?”

Though every company is different, there are best practices that apply to everyone. For example, who would not want to get the most value for what they are paying? Or who would ever prefer to work with a firm that has poor communication and organization skills? Does anyone ever really want to be inefficient in their day-to-day processes?

No… and that’s the point. Clients all want the same thing. Coincidentally they are also the things they inherently need, which includes peace of mind that they made the right decision. Those “things” are listed below in the Top 10 Reasons Professional Services Firms Lose Their Big Clients.


Client: “I believe the firm was charging more than the value I was receiving.”

Regardless of cost, there must be an underlying value that is directly proportional to, or better than, the price you are paying. Often, hybrid onshore/offshore approaches have worked for many companies, but if a company can be competitive with only onshore resources and still remain very competitive in the marketplace, then you have the (very rare) golden ticket.

Offshore is where the cost-to-value ratio really booms! It indicates flexibility and a foundation for a solid value proposition and competitive rates. If you can get similar – sometimes better – quality for 20% of the price, there’s no shame in admitting that your ears have been perked. This is usually how firms are able to offer continuous value to their clients, whereas purely onshore is more of a variable obstacle than an asset, which prevents the client’s profit from sky-rocketing.


Client: “The firm had difficulty recruiting or retaining talented employees.”

Human capital is the backbone of a strong consulting firm — or at least it should be. If it isn’t within your firm, then you’re probably reading this blog very carefully. Once talented employees, SME’s and industry experts are marginalized, they tend to go elsewhere – usually to a competitor. It’s a huge competitive advantage when a firm can retain talent better than their competition.

It is common for talent to be shuffled from one organization to another, swapped back and forth to the point of exhaustion and over-saturation. But if a developer, say, wanted to stick with your firm and bear a tenure of 6+ years – keep in mind the industry average for developers is about 2.5 years and contractors can be as short as 6 months – then you have something special there.

Talent retention, coupled with an attractive work environment, solid reviews and word-of-mouth referrals, can really give a client some transparency into the core values and delivery excellence of that consulting firm.


Client: “The firm did not regularly check with us regarding our changing needs.”

Sharp communication is perhaps the hardest thing to achieve in any company. While most probably admit they could do a better job of this (the rest are in denial), noticing you have a problem is the first step. Ignoring it often leads to problems that could otherwise be solved through subtle improvements to your communication cycle.

For example, the primary responsibility of Account Managers is to act as the conduit for clients and consultants. But they are only going to communicate to the level that senior management exemplifies. So if your President or CEO does not communicate effectively to his employees, then that trend is likely going to filter down internally.

If your clients consistently ask you to stay engaged – even when they can’t afford you – it implies that you excel in meaningful thought transmission. If you can break that barrier of communication and embrace all opportunities to over-communicate wherever possible, then most of the battle is over. Now you have the peace of mind that miscommunication won’t be the cause of your turmoil.


Client: “The firm no longer specialized in the types of services I needed.”

To specialize or not to specialize. Can we ever really predict how that question will be answered from year-to-year, or client-to-client? Even with noble intentions and commitment to one’s origins, low-hanging profits and the lure of diversification can be powerful factors that determine a firm’s longevity. It’s important not to forget where you came from and allow your organization to grow organically.

Say a big client wants A and you start also offering B. They may question your level of knowledge and expertise. But if you tie your specializations into different divisions or increase your level of concentration as a counter-measure, then it helps absorb the impact of any opposing perception. By upping your game in your area of specialty, you demonstrate a high level of forethought, awareness and sensitivity to that perception.

For example, a predominant Microsoft shop may expand its service offerings into non-Microsoft skill sets, but they understandably tread lightly. They first must be transparent with their clients that they are not abandoning the technology stack they were originally hired on for. Branching off is okay as long as the tree is big enough to sprout that branch. Is your firm strong enough to expand organically without negative perception of change?

5 >>> TRUST

Client: “I lost trust in the firm’s ability to deliver the quality of service that I needed.”

Trust is a funny thing. You can trust someone from a first encounter and trust them forever. But if for whatever reason that trust is broken, it is really, really, really hard to regain it. It takes a great deal of effort for employees, teams and consultants to keep the teams engaged at a client’s place of business. To build and maintain a strong foundation of trust, it goes back to talent retention.

You must hire strong people with good work ethics and great soft skills in their respective roles to establish and cultivate a trusting relationship. People are the catalyst for building trust and it takes time – often more time than we’re willing to wait. If a firm can retain a client for a long period of time and actually enjoy working with them, it is a testament to the trust they have earned.


Client: “The firm was not leveraging innovation to deliver the best services possible.”

Some companies could care less if you’re on the cutting edge of technology and innovation – it’s sad by true – but showing that you are capable and competent in this capacity could really save your skin. Keeping up with modern technologies, techniques and tools not only benefits your clients but your firm as well.

Some companies may even hire a professional services firm to help them maintain and enhance old technology that they’ve gotten used to and unwilling (or unable) to give up. As long as you at least try to pull your clients towards innovation, it will ultimately show that your firm is “progressive”, which is just another way of saying “they are here to stay.”


Client: “The firm’s staff could not efficiently find the data they needed.”

Whether it’s data mining, reporting, performing business analysis or gathering information as part of a project, it all really comes down to one thing: Resourcefulness. Can you work independently and locate the correct data or assets in order to do what you were paid to do? Or do you need your hand held? Don’t be the latter.

If a client has their data locked in a safe and you don’t have the key, then it’s very hard to achieve this. Hard, not impossible. Those same clients may be of this mindset: “Well find the key!” or “Don’t you have access to a laser beam?” If the information you need is on a network, however, and you just need to siphon through it all, then that’s part of your scope of work. Do your job.

Ultimately, a client doesn’t want to hear excuses. They want to hear solutions, regardless of how feasible or practical they are. A smart person would use this as an opportunity to surprise your client, wow the stakeholders, and showcase how well you (and in the company as a whole) can adapt, critically think and leverage your resources to accomplish a goal.


Client: “It became obvious that the firm was not acting as efficiently as it should.”

If “ridiculously efficient” is a term your clients use to describe you, skip to the next section. If not, stick around.

We operate in a society where competitive edge is a near-tangible aspect to business and the ability to solve problems faster than your competitors is a huge plus. If you don’t solve it faster, that’s when other firms are brought in. Whether this stems from poor communication, management or execution, employing an onshore engagement manager to communicate clearly and concisely with the offshore team is a must-have.

As for offshore teams, their biggest value resonates with clients because they can make the most use of the full 24-hour cycle, whereas most firms lose 12 hours a day to the time difference of their onshore team. Would you believe that having an offshore team can save you 4 to 6 times as much time and money? That’s a whole other conversation for our Axis Team!


Client: “The firm was unaware of regulation that directly affected our industry.”

Since government regulations rarely don’t affect an organization in some capacity, it’s advantageous for a firm to have transparency into a client’s business. And don’t fret about trade secrets or intellectual property, which most firms tend to focus on. When a firm is involved in client meetings that delve into industry news, standards and regulatory requirements, rest assured the client is in good company… and hands.

You don’t have to be a compliance company or even experts for that matter to understand your client’s potential regulatory woes. You do have to stay informed and be able to talk about it intelligently. A few examples include HIPAA and PII in healthcare; SOX for publicly traded companies; GAAP at financial services companies; DRE in the real estate market; PCI within the credit card transactions and payment processing industry; and so on.

Sometimes clients can be adamant about keeping firms out of the loop, but it never hurts to research the industry and communicate to the client. This will show that you have their best interest in mind. You don’t have to own the regulatory compliance portion but you can at least help analyze risk and recommend remediation where needed.


Client: “I became concerned about the firm’s financial stability.”

Before a company enters into a long-term contract with a consulting firm, rest assured the client researched the firm’s size, reputation and project list to determine its financial stability. This is not to say that large or small firms are better, or that a long project list is more important that big name clients. They are more concerned with a firm’s overall strength and security.

Stability comes in many forms: reputation, longevity in the business, growth rates, how profitable they are, historical industry diversification, business savviness and even the ability to bounce back from a big lawsuit, perhaps. Never underestimate the power of long-term relationships between clients and current employees. It’s less about the bottom line and more about how firms reach that bottom line.

Leadership, knowledge and good people can all breed financial success. As the saying goes, “Give a man a fish and you can feed him for a day. Teach a man to fish and you can feed him for a lifetime.” Once a firm has the knowledge and personnel to run a financially stable company, they will more than likely find ways to improve their competitive stance or bounce back from obstacles that occur in business.

Honorable Mention:


Client: “I didn’t feel the firm was providing a high level of customer service.”

Unless you live somewhere where customer service doesn’t really exist, you must keep your manners, treatment of others and attention to detail in check. We all want to feel important. We all like it when people show that they care and want to help. We all appreciate others going above and beyond to ensure we are happy. But does it matter? Yes. It’s all about the little things.

Just as efficiency, communication, trust and employment management can derail a client relationship, so can poor customer service. Sure you can challenge a client with your expert opinions and advise them on best practices, but it should be done with tact, consideration and with a “as a matter of fact” attitude. Customer satisfaction tends to lead to strong relationships because you want to make their lives easier. By doing so you are providing them with something more than they expected.