4 Lessons on How I Lost a $200,000 Client

Frustrated after losing a client

I will breakdown in detail how I lost a $200,000 client in hopes of saving you some time and some pain. However, before I do that I think it’s best to give you a little context to better understand the lesson. Many of you know that I recently decided to operate what I call our family business. It’s a Janitorial Services business that is inspired by what my grandmother started in the 90’s. I’ve ran this exact business before but this time I am doing with it more knowledge, more experience and different goals.

One of my initial goal is to systematically grow the business to have a top line revenue $100,00 within the first 6-9 months. That might seem a bit ambitious (and it is) but having already climbed this mountain before I knew the goal was attainable. I immediately begin working on different marketing strategies and digging up old hacks. Within days of me deciding to pursue this business a great thing happened.

A former client of mine reached out to me to see if I was interested in submitting an RFP (Request For Proposal) for ongoing janitorial services. I was ecstatic! It was as if the sky opened up and dropped this opportunity into my lap in just the right timing. This was like a divine validation of my decision. I agreed to participate in the RFP and that is where the lessons begin.

Not having an ideal client

The first mistake I made was not deciding who my ideal client was. Maybe my ideal client is one who buys off brand and not off price. If so, I just said yes to a potential client I should have been saying no to. In the interest of full disclosure I plan to build a brand that people will desire even at a premium price. However, my strategy to doing that is to first play the price game and use the client work as leverage to build the brand. That means that I still would have said yes to RFP based on where my brand is currently. It’s still important to know when to say no.

Following the unwritten rules

I attended a mandatory pre-bid meeting with about 8 other companies. We all followed the typical rules of pre-bid meetings:
* Only ask the clichè questions
* Nod and say yes even if you don’t fully understand
* Don’t ask for extra time
* Etc
These are not written rules required by the client. These are unwritten rules, kind of like bid etiquette. Whatever you want to call it, it’s stupid. I should have asked for uninterrupted one on one time. I should have asked the tough questions that would have given me the best information. Instead, I did the worst thing you can do as a new business owner. I did what everyone else was doing.

Not having a process

Let’s play one of my daughter’s favorite games called “let’s pretend”. Let’s pretend that my business experienced explosive growth. So much growth that I no longer had time to do proposals and I needed to hire someone to do it for me. What would their first day look like? I would have to sit there and teach them for days maybe even weeks how to bid a job. Let’s face it, if I had time to do that I wouldn’t need to hire someone! Instead of having a written process, I did the “just go with your gut” strategy. If you can’t tell by the title of this post that’s a losing strategy.

Not utilizing my team

One thing that I didn’t mention earlier is that when I decided to pursuit the family business I didn’t do it alone. I included, well…my family. My wife and my father will be helping me along this journey. In fact, my father (or Pops as I call him) went with me to the pre-bid meeting and the walk-through. He has tons of cleaning experience and is extremely anal and proficient when it comes to cleaning. Sounds great right? It is great, but only when that skill and experience is being utilized. I never once asked my wife or my Pops what they thought about the RFP. I never bounced numbers or ideas off them or ask my Pops what type of read he got on the client during the meeting. Basically, I was flying solo. Well, it was three of us if you count my ego and my arrogance.

The client story

The morale of this story is this: we all make mistakes but that’s not the good part, the good part is when you can learn from those mistakes. And the best part is when you can help tens or even hundreds of other people learn the same lessons. I would love to say that I will never lose a $200,000 client again but that’s not guaranteed. What I can guarantee is that I won’t lose a client the same way again. Will you guarantee the same thing for you and your business? Write me a comment below and share you client stories. I’d love to hear from you!