For entrepreneurs and freelancers of all kinds, losing clients is a normal (though unpleasant) part of conducting business. In fact, average client retention rates in the freelance industry hover just below 20%.

Often, lost clients are a natural result of work well-done. You’ve fulfilled the client’s need, addressed any questions, and they no longer need your services.

Other times, however, disappearing clients are a sign that something isn’t quite clicking. And when clients start dropping like flies, there’s a good chance it’s just the beginning.

Here’s how to avoid losing clients before it’s too late.

Losing Clients Leads to More Than Just a Hurt Ego

First, let’s get the obvious out of the way:

Losing clients sucks. No matter how professional you try to remain, having a client leave your business hurts.

But that’s just the tip of the iceberg.

When clients leave, you deal with a whole lot more than a bruised ego. You also deal with lost income.

According to one consumer survey, bringing on a new client can cost up to 10 times more than working to improve your relationship with an existing client. On top of that, loyal clients spend more on average than new clients.

If those numbers aren’t enough to convince you, then we have more. According to Invesp, improving your client retention rate by just 5% could lead to a profit gain of at least 25 percent.

So, are you ready to learn why you’re losing clients? And, more importantly, how you can work to reverse this trend?

Why Clients Leave: Is It You or Them?

Not all clients are meant to stick around for good. But the more who do, the more freedom you have to focus less on hunting down new projects and more on providing the best services possible.

At the same time, if you really want to tackle your client retention rate, you need to be honest with yourself.

Truth is, you might be the reason why clients are leaving. And no one wants to accept that scenario.

1. You’re no longer in the budget

Your services cost money. If they didn’t, you wouldn’t be capable of making a living doing what you do.

But while you’re bringing in cash, your clients are paying it out. Sometimes, that cashflow comes to an abrupt halt.

If your client encounters financial struggles, chances are that outside services are going to be the first to go. That means you.

Of course, the more crucial your services are to your client, the less eager they’ll be to end your contract. When these things come to a head, though, you have little control over such decisions.

However, maybe your client is doing just fine financially. Still, budgetary changes can throw a wrench into an otherwise great working relationship.

For example, if you contract directly with other businesses, a shift in management could affect how much, if any, of the budget your client is willing to spend on your services.

What you can do:

In cases such as this, you only have so much control over how your client chooses to proceed. With that said, you do have some options.

First, you could offer a discounted rate to your client if they continue working with you. But tread carefully.

While extending such an offer could serve as a much-needed relief for a loyal client going through hard times, it can easily snowball into them taking advantage of you.

On the other hand, proposing a discounted rate isn’t doing yourself any favors if a client decides you’re no longer a budgetary priority.

Instead, approach this scenario by emphasizing the value you bring to your client. If your services are something they can’t live without, it’s ultimately up to your client whether they want to squeeze you in or suffer the consequences of cutting ties.

2. Your services are unneeded

You might hear that your services are unneeded and panic. You might even feel offended.

Before you start justifying your business offerings, though, let us clarify:

Think about some of your very first clients. There’s a good chance they were in a specific, similar position to each other.

For example, if you provide web development services, maybe your first clients were looking for someone to build their new website from scratch. Jump to the future, though, and those clients now have their sleek new websites.

If you did a solid job, then they’re more than pleased with the final product. But they don’t have much of a need for you anymore.

What you can do:

Achieving lasting success in the freelance world means finding novel ways to extend the shelf life of your services. Naturally, this is easier for some entrepreneurs than for others.

Even if large, one-time projects remain your bread and butter, brainstorm ways in which you can turn your expertise into a “subscription”-style service.

Let’s continue the web development example from above:

Your client’s website is designed, built, and ready to go live. For the time being, they no longer need someone to construct their website.

So, what do they need? Someone to maintain their website. And who’s better for the job than the person who built it in the first place?

By selling existing clients on ongoing services, you can drastically improve client retention rates with very little product development on your end.

3. Competitors are closing in

Unfortunately, just because your clients rely on you for ongoing services doesn’t mean they’re locked in forever. You still need to watch out for poachers.

In most industries, especially if you’re limited to a specific geographical area, there are a finite number of clients available. When there are multiple freelancers or businesses offering the same basic services, competition can turn ugly.

Client poaching is so commonplace in some areas of contract work that entire articles are devoted to perfecting the practice.

No matter where you stand on the ethics of this, however, you need to take steps to protect yourself and your client list.

What you can do:

First and foremost, stay aware of your competition at all times.

When you first started out in the world of entrepreneurship, you probably devoted an impressive amount of time and energy to researching the market.

Now that you’re more or less established, though, how does your knowledge compare? Because if you want to keep your competition from running off with your clients, knowledge is power.

While it’s no secret that clients care about cost, with a 2018 report showing 31% of clients leave for a better price, it’s not the only factor that causes them to venture off.

Actually, 32% of clients leave just because of experiencing poor customer service.

So, monitor your competition, keep your prices fair, and never give your clients anything less than the best service.

4. You screwed up

It’s time to face the music. Whether it was the result of forgetfulness, life circumstances, or the changing moon, the fact is you screwed up.

There’s nothing more to it.

What you can do:

There’s one very obvious solution to losing clients this way:

Don’t screw up.

In this case, prevention really is the best form of medicine. If you think there’s a chance you can salvage the professional relationship, though, we can help steer you in the right direction.

When (not if) this happens to you, there’s no room for excuses. If you can’t own up to your mistake and address it head-on, there’s no point trying to stop your client from walking.

In the case you’re lucky enough to catch the mistake before them, don’t hide from the inevitable. Before anything else happens, you need to communicate with your client honestly and openly.

Tell them the issue, why it happened, and what you are doing to fix it.

But let’s make something clear when we say you should explain why you screwed up to your client:

Don’t make excuses. Don’t try to skirt or redirect the blame. Let them ask questions about the problem and your proposed solution, and be prepared to give straight answers.

If your client continues doing business with you, they won’t be able to trust you if they know you won’t admit to your shortcomings.

Then, get to work fixing your mistake. The rest is in your client’s hands.

5. You overcomplicate things

Do you know what else clients hate, aside from exorbitant prices and poor customer service? Companies that are a chore to do business with on a day-to-day basis.

Your clients likely already have a ton on their plates. If your client list is made up of other businesses, this is especially true.

Just think about it:

Would you want to continue working with someone who made getting in touch with them a multi-day excursion? Or someone whose invoicing and accounting practices left you unsure how much and when you needed to pay?

Probably not.

What you can do:

Part of your job is to make working with you as simple and stress-free as possible.

Many entrepreneurs focus on the front-end — business cards, contracts, and initial client communication. But then they let things run rampant after the project has started.

No matter how qualified you are in your field, nothing says “unprofessional” like disorganized invoicing and payment procedures. After all, money is a touchy subject (even in the business world), and any uncertainty a client feels about paying you will immediately reflect onto your business as a whole.

If you’re still relying on paper invoices, start there. Switching over to a digital invoicing and bookkeeping platform, like invoicely, is the quickest and easiest way to improve your business practices.

Ready to learn more about streamlining your business practices and making life easier on your clients?

Discover how invoicely’s services can make clients more eager to work with you over the competition.