Break the Customer Churn Cycle and Grow Your Professional Services Company

It’s no secret that the professional services industry is booming. In fact, it’s forecasted to grow 5.4% by 2020, reaching almost $5 trillion, according to the Professional Services Market Global Report.

Technology has triggered an explosion of opportunity for companies to leverage the resources and expertise of highly specialized external teams — yet the nature of this relationship creates unique friction around project collaboration. Gaps between different processes or definitions of what success looks like cause frustration, client churn, and projects left on the cutting-room floor.

We wanted a deep understanding of the challenges professional services teams face around project work management, so we surveyed 1,000+ adults in the U.S. and U.K. who work for an agency or consulting firm or provide billable services to external clients. We then distilled their responses down into actionable insights.

The customer churn cycle

Imagine this: You’ve landed a new client and enthusiastically dive right into their project. You’re feeling great because you know exactly what they want. The contract is signed, everyone is aligned on scope, and the project is moving along seamlessly — until you get halfway through and discover you each had totally different visions and expectations. Now the client is frustrated, you have to reallocate resources, and it’s hurting your ability to serve other clients.

Our survey revealed the top reasons for customer churn are:

  1. Projects going over budget or deadline
  2. Communication difficulties or delays
  3. Lack of visibility into project status

What causes the most churn or frustration among your clients?

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It’s easy to see the correlation between these 3 client frustrations. A lack of visibility and communication challenges cause projects to quickly go off track and miss deadlines. When more time and resources are needed, it impacts budget.

In our free report, we dig deep into the exact challenges top professional services teams face every day, and outline the steps to easily overcome them. Below, we highlight 3 of the top trends that you should focus on to reduce churn and grow your professional services business.

1. Improve project planning and resource management

A project plan should be more than a task list. Teams need to visualize how their timeline aligns with their resources, so they can identify potential bottlenecks. In fact, our survey shows that 1 of the top 3 reasons professional services projects are delayed is due to inaccurate planning and resource management.

We saw a direct correlation between the inability to kick off projects effectively and overall project delays. Even the most perfectly planned and resourced projects still run into issues. Our respondents said that last-minute changes to requirements are the #1 reason for project delays.

Setting projects up with delays in mind is the key to success. 1 in 5 of our respondents said that a tool that could help them more easily reschedule and reassign work when changes occur would have the biggest impact on their workloads.

Here are 2 ways you can improve resource management:

  • Use request forms to organize incoming work and ensure all requirements are documented and agreed upon prior to project kickoff. Aligning expectations from the get-go improves planning accuracy and helps avoid those last-minute changes. It also helps you funnel in new work in an organized fashion.
  • Use Gantt charts to visualize dependencies as you schedule tasks into your timeline. As you move through the project, use time tracking and reporting to measure performance, and leverage this information to refine timelines going forward. Wrike makes it easy to drag and drop tasks when you need to reschedule or move around resources.

2. Develop aligned processes that optimize collaboration

It’s one thing to set up your project plan with roadblocks in mind and have the tools to adjust resources on the fly — it’s another to make sure that communication and collaboration keep pace. About 25% of our survey respondents say that customer churn is due to communication difficulties or delays.

The ability to retain your processes and workflows while also accommodating clients’ preferences will set you apart from your competition. But it requires unprecedented levels of flexibility and communication.

One way to stay structured but agile is to limit the number of tools you’re using within your own process. More than half of respondents (52%) say they use 2 to 3 tools to manage projects and communicate with internal/external stakeholders. 10% reported using 4 or more tools.

How many tools do you use to manage projects and communicate with internal/external stakeholders?

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Using too many tools makes collaboration difficult for both clients and internal stakeholders. Details get lost across email, instant messages, and spreadsheets, causing miscommunication, confusion, and delays. Sloppy handoffs and version control issues ensue without a defined workflow and clear feedback process. Accurate reporting and optimized outcomes become impossible with pieces of projects living across multiple platforms.

Replace these tools with a centralized repository for all project-related information and collaboration. A work management platform should act as a single source of truth, eliminating the need to manually consolidate notes across systems and keeping all communication in context and chronological order.

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3. Build visibility into project status and progress updates

Visibility does more than ensure projects run smoothly from a logistical perspective. There are a few key danger zones where bottlenecks commonly occur, and visibility helps you identify and prevent them. These pivotal project moments include:

  • Project status check-ins
  • Feedback and approval loops
  • Time tracking and billing

Project check-ins may seem small. An email here, a quick IM there — but over time these status update emails, reports, and meetings add up. The majority of professional services folks (36%) spend 2–3 hours per week on status updates. Some 11% spend 4+ hours each week.

How much time do you spend sending project status update emails, generating status reports, or having status update meetings each week?

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Prioritizing visibility into project progress both for your team and your clients saves time — and sanity. With the #3 reason for client churn being lack of visibility into project status, it’s worth investing in a dashboard that shows you all project statuses at a glance. It helps you maintain momentum and stay aligned — even if you hit roadblocks and need to reschedule tasks.

Feedback and approval loops can be collaboration heaven or hell. All professional services teams can relate to sending clients an asset for approval and either hearing crickets or getting so much feedback that version control chaos ensues. All roads lead to frustration and confusion.

Selecting a single source of truth for all project-related details and communications is the first and most important step to enhancing project visibility. Visual proofing and approval tools also help clarify edits and hold stakeholders accountable. Is the asset being approved by the client? Or, is it being revised by the professional services team? Keeping it all in one place keeps everyone aligned.

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Time tracking and billing is another area where professional services teams can preserve significant time while improving visibility with clients. One-third of survey respondents (34%) say it takes them 2–3 hours each week to track billable hours. About 1 in 10 respondents (10%) say it takes them more than 4 hours per week.

Professional services companies are bogged down with manually tracking and billing time — and they don’t always get paid for those hours. Automating these tasks saves significant time better spent building client relationships. Clients are much happier when they have visibility into how they’re being billed and can correlate time spent to value added.

Read more in our free survey report

Differentiating yourself from the competition requires the right processes and the tools to support them. Professional services teams can turn their biggest obstacles into opportunities and break the customer churn cycle.

Want to learn more? Download our free survey report!

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