Winning Back Lost Clients

Winning Back Lost Clients

Losing a client is always painful and costly. Your first priority when losing a client is to start a campaign to win them back. How do you do that? Here are five suggestions.

1. Probe to Understand the Reasons

There are a myriad of reasons managers are terminated, including:

  • Underperformance – failure to achieve client’s objectives, lagging benchmarks and/or peers
  • Organizational changes or professional turnover
  • Fees – relatively high and/or unwilling to negotiate
  • Poor client service – infrequent or ineffective communication, insensitivity to client needs/interests (e.g., diversity, ESG)
  • Asset reallocation – from active to passive; from traditional to alternatives; from external to internal management
  • Consolidation – streamlining the number of managers serving the investor

Whatever the reason, it is important to initiate dialogues with your clients to understand their position. Avoid becoming defensive, and welcome any feedback and criticism. It may help you save other client relationships. To quote Bill Gates, “Your most unhappy customers [clients] are your greatest source of learning.”

It is optimal for individuals who have the strongest relationships with the client to have the conversations. It also can be beneficial to have an outside independent party talk with the client (and/or their consultant) as well. Elicit as much information as possible with probing questions such as the following:

Sample Probing Questions

If performance-related:

  • What was the primary concern about performance?
  • What time period was most relevant in your decision (e.g., quarterly, annually, trailing or rolling 3 year periods, trailing or rolling 5 year periods)?
  • What, if any, benchmark or peer group comparison was the basis of your decision?
  • What metrics do you monitor most closely in deciding whether to retain a manager: Alpha? Tracking error? Factor exposures? Information ratio? Turnover rate? Sharpe ratio? Risk-adjusted returns? Other?
  • Did our firm adhere to the investment mandate that we initially proposed and which was the basis for your decision to hire us?
  • Was the decision to terminate our firm strongly influenced by a consultant recommendation? If so, what were the reasons?

If organizational concerns:

  • Was the termination related to any specific event or issue (e.g., personnel turnover, succession plan for senior management transition)?
  • Was the decision to terminate our firm strongly influenced by a consultant recommendation? If so, what were the reasons?

If asset allocation policy:

  • When was your most recent asset allocation study conducted and what were the changes? What changes have occurred in your overall investment plan (e.g., actuarial goals, funding level)?
  • What changes have been made in your active/passive allocations? Style allocations?
  • Where will you be reallocating the assets our firm has been managing?

General perceptions:

  • How would you rate our level of client service?
  • How long has our firm been on your “watch list”?
  • Has our firm communicated with you effectively in relation to your stated concerns during this period? Have we asked the right questions to understand the nature and seriousness of your concerns during this period?
  • How could communications or service have been handled better?
  • Was there a “triggering event,” or was the decision based on an accumulation of concerns? Please describe the event or concerns.
  • What is your overall view of our firm as an organization today?
  • Would you consider reestablishing a relationship with us in the future? If so, what would we have to do to succeed with you?
  • Is there anything we could have done, other than performance, to have changed or delayed your decision?

2. Determine If There Is Anything that Could Change the Outcome

You have everything to gain. Explore whether there is a possibility of securing more time to address the issue(s). If performance-related, can you offer a reduced fee for a specified period of time? Does your firm offer other strategies/solutions that will address your client’s needs? Studies show that if you can resolve a problem with a client, you can potentially build a stronger relationship. Keeping even a portion of the assets in another strategy offered by your firm allows you to preserve the relationship.

3. If the Termination Is Irrevocable, Be Gracious

No one likes sour grapes. Empathize with your client. Convey understanding and appreciation of the decision. Offer to help in every way possible to ensure a smooth transition of the assets. Ask if you can provide referrals/suggestions. Let the client know how much you value the relationship. Genuinely thank the client for the opportunity to invest on behalf of their entity and participants. Let them know you would welcome the chance to work together again in the future.

4. Keep the Relationship Alive

Stay in touch with periodic visits, calls and written communications. The grass isn’t always greener on the other side. Management committee members and objectives change. Send meaningful, relevant information – anything that will help your contact(s) do their jobs better. Reinforce the value of maintaining a relationship with you and your firm. Be professional, persistent and patient. Avoid “selling.” Be a valued resource. Even if you fail to keep or win back lost clients, you increase your chances of keeping them as allies, and potentially as referral sources.

5. Attract Clients Who Are a Good Fit

The real secret to maximizing client retention is to attract clients who are a good long-term fit. That means:

  • Providing solutions that fulfill specific and changing client needs
  • Making sure clients clearly understand what you are providing and have realistic expectations
  • Confirming that the client’s investment time horizon is compatible with your own
  • Avoiding negative surprises
  • Putting clients’ interests first
  • Exceeding expectations in every way possible

“Know what your customers [clients] want most and what your company does best. Focus on where those two meet.”

~ Kevin Stirtz

Do you have any tips or suggestions for Winning Back Lost Clients? Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Christine Røstvold, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Christine was a founding board member of PAICR (Professional Association for Investment Communications Resources), and served on the Advisory Board for more than a decade.

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