If you have been in business for very long you have probably already had "the call." You know the one I mean; the customer calling to give you the bad news. "Kevin, I'm really sorry but I can't continue your service. I just don't have the money." Everyone dreads the call and when it comes, everyone feels bad. It's a lose - lose call every time.
I hate to lose a client for any reason. I get a sick feeling in the pit of my stomach when I think about it. My core belief is that I am creating customers for life and when one drops I treat it as a failure in my system that has to be fixed. But what can you do when the customer runs out of money? You can't just give your product or service away for free. What's the solution?
First, think about how you approach your customer relationships. If you are all about the money, then you may not have many options since the money is where the problem lies. On the other hand, if you are like me and most of my clients, the relationship goes much deeper than the money. I try to make every customer relationship about the people and their needs. I know it sounds common, and most people will say they are all about the relationship, but this is the time to do a reality check for yourself to see if you really value that relationship more than the money it brings. If the answer is yes, then read on.
If you are building great customer relationships, the phone call is an opportunity help them succeed. Your response to call is, "tell me what's going with you and how can I help." Then just listen. As you listen to the situation and learn its causes you have the opportunity to offer creative ideas for help and support. More than that, but focusing on the relationship first, you earn the right to suggest ways to continue the relationship despite the financial struggles.
Of course the most obvious way to help is to adjust you price or billing rules until they can recover financially. If your product or service is something the customer needs and values and you have a way to make those adjustments, you are likely to get a positive response from the customer. I have used this strategy with great success. In some cases I have allowed the client to continue my service for a short while, typically 90 days, with no billing at all. In return I ask the client to agree to continue payments for an additional 90 days at the end of our agreement. Another way I have used this strategy is to simply reduce the client's billing by as much as 50% for three to six months. After the reduction period the client returns to normal billing. Either way, the client stays with me and the relationship is stronger because of it.
Another great to way to keep a customer who is out of cash is to identify opportunities for barter or trade with that customer. If they offer a product or service you can use in your business, it just makes sense to find ways to trade for that product or service directly. This creates a true win - win for you and your client. I have used this strategy with caterers, marketing companies, printers, etc. As an alternative, you can consider joining a formal barter organization and inviting your client to join as well. I am member of the ITEX trading network. As a member I have the opportunity to use trade with other member businesses and I find I can buy a wide array of products and services that I need and I have opportunity to sell to clients who would otherwise not be able to pay.
A third alternative is to create an affiliate or referral system that compensates them directly for introducing you to new business. I have a policy that rewards a client with a free month of service any time they refer someone who becomes a client. I have also use affiliate systems that pay a commission to anyone who refers a prospect who then signs a coaching agreement with me. To make this work the rules for referrals must be very clear so you don't spend lots of time chasing unqualified referrals. With a good system in place, you can see lots of growth in your business and help your struggling client succeed as well.
All these options begin with one CEO Rule: "The Transaction is the Result of the Relationship." If the relationship is first in your mind, your options are endless. Find a way to keep the customer today and you are well on your way to keeping that customer for life.