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IT Business: Managing Expectations And Maintaining Perspective September 13, 2008

Posted by Jim Locke in IT Business.
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Anybody who has been in the IT business for any length of time has seen clients come and go. Assuming that you are good at what you do, they generally fall into a couple of categories:

  • Clients you neglected
  • Clients who can’t afford your services
  • Clients who don’t value your advice
  • Clients with unmanaged expectations

The clients that are toughest to lose, however, are the long term ones who simply leave because the grass looked greener on the other side of the fence. They paid their bills. They weren’t neglected. They valued your advice but you simply failed to manage their expectations properly.

This is what happened to me this week. We managed the network for a small company here in California for the past two years. It was a disaster when we acquired the account. Multiple servers connected to directly to the Internet without a firewall, wide open (unsecured) wireless, unlicensed software, and non-business grade computers and printers. Most of these issues were easily cleaned up in a short period of time, resulting in improved uptime and few failures related to the network. The client paid their bills and was certainly not neglected, as they had 24 hour operations for which we were on call.

So how did we lose them? Easy. We failed to put our foot down and properly manage their expectations. In this case, we could simply not convince the client to purchase the business grade hardware that their 24-hour operation required. For example, it initially took us almost a year to convince them to purchase a good quality network printer that did not cause their front office to be down on a regular basis and we never could convince them to purchase licensing for Microsoft Office, which resulted in multiple versions of the product being scattered across the network. Yet we allowed ourselves to be lulled into the illusion that we were “working with this client” and their budgetary constraints. Hence, needless to say, we were suprised when the client informed me that they were not going to renew our contract but move to a new firm that was closer geographically, guaranteed 24×7 support (with a 20 minute response time), and would do the job for less than what we were charging.

While I was obviously displeased to lose a good client, it took me a while to really put the loss in proper perspective, which is the point of this whole rant. The reality is that had I properly managed the clients expectations, one of two things would have happened over a year ago:

  1. The client would have upgraded their hardware and software to a stable, supportable platform; or,
  2. We should have terminated the contract with the client

You see the reality is we didn’t do them any favors by “working with them”. They wanted guaranteed business quality uptime but invested in poor quality equipment at the outset. Our meager attempt to replace this equipment over time to meet their budgetary constraints only caused us to incur higher costs to support them and resulted in lower profits to us. It also created the perception that we were not properly taking care of the client.

However, they will likely be back. No, that is not my ego talking, it is just experience. The fact of the matter is that about 80% of the clients that leave our firm for some reason, generally come back to us in 6-24 months (I suspect this is true in most well run operations). Some may go through a single consultant before it happens, others may go through half a dozen. The only way this client will stay with the new firm they selected is if they better manage their expectations and force the client to upgrade their hardware and software infrastucture. However, their offer of  24×7, 20-minute guaranteed response time (client expectation: 20 minutes on-site response) and a reduced rate without performing even a basic analysis of the network tells me that this will probably not be the case. Regardless, I hope the client will be better off.

Take Away: Take time to put really put the loss of a client in perspective. Determine how you could avoid this in the future and what you will tell this client if they come back to you. You should be prepared to answer these questions:

  • Do you want the client back?
  • What will you do differently to manage this client’s expectations?
  • What expectations do you have for the client?

Now that I have put things into perspective, I certainly would not take my lost client back on without clearly setting the expectations for what they can expect from their current environment and a short-term committment to upgrade their hardware and software infrastructure.

Action item: Evaluate your client base and determine is you are meeting their expectations. If not, make the adjustments necessary to not only meet but exceed those expectations. Failure to do so will only lead to client disappointment and lower profitability fo your firm, so take action today!

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