Discussion on:

What to do when you lose a big client

Chip, thanks for bringing this topic up. Consulting (or contracting) by its very nature is project-centric, which by definition has a definite end. Depending on your focus (and aptitude), every engagement may be a single event, with little or no reason for the client to retain your services once the job is complete -- especially if you do an exemplary job. With rare exceptions over a 30 year history, this is how my practice runs. You are fortunate your offering meets a need some customers have repeated and continuous use for.

Regardless, your points about having cash reserves available to ride out the inevitable slow periods and that effort to secure new business while delivering on existing contracts must be expended are on the mark and whose importance can't be overemphasized.

Two major events at a client can and do tend to put you and your consulting business on the outside looking in. One is an acquisition, where the acquiring company has its own stable of consultants to call upon. The other is a change in management, when pretty much the same thing happens but on a smaller scale. In the former you are not likely the only vendor to be affected by the acquisition or merger. In the latter, a new manager, probably from outside the business, is being brought in to make things happen and that typically means this new manager will bring in their trusted consultants and not rely on you. Either way, it is always dangerous to have more than 50% of your revenue tied to one client. Best not to get stuck in that situation if you can avoid it.

Very good article and I experienced this very thing in 2012. Lost two major clients of over six years, as desperate consultants had been hitting them hard and promising the Moon if they'd go with them.
Panic set in and I went through a lot of what was outlined in the article.
On Christmas Day one of the clients called me and they were losing $40k a month in revenue after firing me in June and going with someone else. They are now back.
The second one has called me and setup an appointment this week to discuss my taking the account back over. I guess the Moon wasn't that good.
It did wake me up that I have to concentrate on getting the front door open wide again, because the back door can get larger in a slow economy. If you are a good consultant, you also have to keep the faith and stay positive. Learn from these bumps because it would be very easy to go into a tailspin from this.

Great article. I learned through experience to do exactly what you suggested - don't panic, think about what you can do to improve your business, and most importantly MOVE ON. Every time I've lost a big client, the following year has seen IMPROVED business! It helps keep us hungry, and make changes to provide better service. I've usually found, looking back, that clients that move on were the difficult ones - wanted discounts on their bills, didn't appreciate my efforts, and took up a disproportionate amount of my time. Once they were gone, I had more time to commit to my other clients and to grow the business. It makes for a few reduced cash flow months, but it can actually be good for your business long term.

Some of the scariest times in my career came right before changes for the better. Darkest before dawn and all that.

Chip my friend you are again right on the money, especially about not blaming yourself and keeping a cool head after this happens. It did for me a year ago and this client represented almost 30% of my income! You have to do a sincere and candid "post-mortem" after stuff like this happens but one never gets anything from doubting ourselves.
Keep going and find better and more creative ways to keep the pipeline full and don't try to oversell on your current clients.

Chip, I agree with you on most points.
However I sorely miss one most important step we all should remember: Rely On Your Network! And I am not talking about social media but real life contacts, peolple you have done business with, colleagues and partners. Let them know you're in a fix and they usually will try to help you.
I can testify to this, having lost a major, major contract last year. No personal reasons, just a very sudden and unexpected budget slash that sent me tumbling out into the snow. After getting to my feet again I sat stunned for a while and then started calling my network contacts. A couple of weeks later the first small things came in and now I'm up and running again.
Make sure you have some real friends out there!

Those of us around long enough in life hopefully come to understand that success is not about what comes your way, but HOW YOU HANDLE what comes your way. That means you celebrate the good stuff but be aware of and trained on how to handle the bad stuff . What do I mean by trained? Well, most people don't handle bad situations instinctively well, it's something you have to teach yourself to do. It starts by finding the good in all situations, look at the positive. No, it's not a positive situation when a client is lost, but then you find a bigger client or what not and suddenly what was once a terrible thing paved the way for a thing that's even better than the original.

Those that have been through this cycle a couple of times tend to remember it, so then, they can be positive even beofre the next good thing comes along, so they stay posistive throughout. This skill, if everybody could practice it always, would keep us all very sane in this fast paced world where, unfortunately, your feelings are amongst the last things considreed.

(PS: Do I use too many comma's?)

I just want to add that I realize waiting for the next good thing to come along as being the catalyst for you having a happy day isn't always ideal - what it it takes a long time, do you wallow in depression? But it really helps to know hat if you keep your head up, a bad situation will always fade away to a good one, just be persistent and patient with yourself.

I wish I had this problem! Just started out in contracting, and seeking my first client. But not worried yet.

I really appreciate these articles...they provide sound advice for my (hopefully soon!) consulting career. Keep up the good work!
Tom

In my experience, the loss of our biggest customer was caused by two things. The first was the failure of the salesforce to have counter and counter-counter bids for the contract they had negotiated for six years with no competition. Two, a disgruntled former employee went to work for a competitor and clued their salesforce to the process. Kiss a big contract goodbye and four employees filed for unemployment.

I wish I would have read this article while I was between consulting jobs for over 9 months a few years ago. I found that you need three things to keep you going during slow times:

1. passion for what you do
2. strong belief in your technical ability
3. stamina to hang in there until things turn

You may need to start another venture to expose yourself to a new market. I tried photography during this slow period. smile