Hops of Faith: Minimizing Blind Trust when Starting and Renewing Client Relationships
5-minute read covering my experiences starting and renewing client relationships
Welcome to A Founder’s Life for Me! I’m Alek, and based on my experiences building companies, I provide practical recommendations on developing your company and career.
Hops of Faith
Deciding to run your own company is a leap of faith, but today, we’ll discuss some smaller hops that impact your daily life as a founder.
As a founder, you are constantly deciding where to prioritize your time. These decisions primarily revolve around trust. How much do you trust a given system to drive your desired result? A few examples:
Is a technical system working as you expect?
Is your sales pipeline where it should be to drive your revenue goals?
Is your website driving enough conversions to meet your revenue goals?
If you have low trust in any of these areas, it becomes your priority. Today, I’ll talk about two examples of trust related to client management:
Trust when taking on a client: Is this a “good” client for me to work with?
Trust when renewing: Is this client going to renew, or are they just saying they will?
In either case, you can do everything possible to reduce the need to rely on blind trust. But, you’ll never fully de-risk the situation.
Whether you’re starting a new client relationship or renewing one, you will never fully de-risk the situation. You can do all the right things and still not get your desired result. I’ll share my experiences de-risking new client relationships and renewals so you can make more conscious tradeoffs at these crucial steps of building client relationships.
Blind Trust and New Client Relationships
When starting a new client relationship, there’s always a chance you’ll end up with a client who makes your life incredibly difficult. Maybe they’re obsessed with holding you to an unintended, specific interpretation of a contract. Or, maybe they’re resistant to any change you’ll propose while working with them. Here are my four strategies for minimizing the risks involved in new client relationships:
Work with people you know. If you have had positive interactions with someone previously, it’s easier to predict future interactions.
Get to know your potential clients. Before formalizing the relationship, have several discussions, understand their expectations, and align on goals.
Listen to your gut. If something feels off, it probably is. Trusting these instincts and testing your hypotheses by asking probing questions or seeking feedback from others who might have interacted with the client is essential.
Give yourself an out. Ensure your contract includes a termination clause, providing a safety net if the relationship is more challenging than anticipated.
You can never fully de-risk a new client relationship. There will always be an element of the unknown. You may start working with a good friend and realize that their work personality differs from their social personality. The client may not have triggered any red flags in your introductory meetings, but once the relationship starts, you realize you’re in over your head.
Employing all four strategies above has allowed me to find and work with great clients.
Blind Trust & Client Renewals
Renewing a client relationship can be as tricky as starting a new one. Two categories of client contacts come to mind that can make this especially difficult:
Clients who are overconfident in their ability to get a deal done.
Clients who don’t want to be the bearer of bad news.
Either way, you’re in for a surprise when the time to renew your contract comes around. Here are my four strategies for navigating these delicate situations:
Empower the client. The client should be able to clearly articulate how your value exceeds your cost. If someone asks them whether you’re worth it, they need to be ready to answer the question on the spot.
Understand the organizational dynamics. Identify and build relationships with key influencers within the client’s organization. These individuals can champion your services and help sway the renewal decision in your favor.
Listen to your gut. Yes, this made both lists. If you sense something is off, investigate further. Engage in open conversations or seek informal feedback to address any underlying concerns. This proactive approach can help you resolve issues before they become significant obstacles.
Have a cushion to land on. Despite your best efforts, renewing a client relationship will always involve uncertainty. Make sure you have a cushion to fall back on. Maintain a financial safety net to cover expenses or keep a pipeline of solid leads for potential new clients. A backup plan ensures you’re not left vulnerable when things don’t go as planned.
Again, you can do everything possible to de-risk a renewal and still be caught off-guard when the time comes. But, by applying these strategies, you can navigate the complexities of renewals with greater confidence.
Lessons Learned and Moving Forward
You will never fully de-risk a client relationship. There’s only so much you can do to guarantee they’ll be good partners, and you’ll never have 100% renewal odds. However, there are strategies you can employ to minimize the leap you’re taking.
De-risking New Client Relationships:
Work with people you know.
Get to know your potential clients.
Listen to your gut.
Give yourself an out.
De-risking Client Relationship Renewals:
Empower the client.
Understand the organizational dynamics.
Listen to your gut.
Have a cushion to land on.
By following these strategies, you’ll find better clients and renew those relationships more often. Nothing is guaranteed, but you’ll shorten your jumps of faith from leaps to hops.
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By sharing my experiences, I hope to provide insight and advice to entrepreneurs facing similar hurdles. Please leave a comment or email me with any questions.