Contents
What we studied
We wanted to understand why client relationships end or fade for firms that provide professional services to other businesses. So we gathered accounts from both sides: 12 interviews with experienced buyers at large companies who buy services from several partners at once, and 50 interviews with leaders of firms that provide professional services to businesses. From here on, we call them professional services leaders.
The interviews did not cover the same projects. Even so, the accounts fit together and pointed to the same pattern.
Projects that were completed and where the client seemed satisfied came up again and again in the accounts of professional services leaders. The firms received no real negative feedback at the end. Yet they weren't brought back for the next projects, and the reason remained unclear to the firm.
The same pattern from two sides
The accounts concern different partnerships. We placed corresponding observations side by side.
“Too often people assume things are fine when they hear nothing.”
“I hear nothing and think everything’s going well, and then suddenly it all escalates.”
The accounts from client-side decision makers showed what can happen on the client's side in similar situations.
The churn spiral: how a collaboration fades
In our research interviews with client-side decision makers, the same pattern kept coming up. We call it the churn spiral. Clients first tried to fix the situation. But when the same things kept happening despite reminders, they began discussing internally whether the partner could meet their needs and whether it was time to look at alternatives.
According to the interviewees, it typically took three to nine months from the first doubt until the collaboration was scaled back or ended. During that time, client work and invoicing could carry on as usual, and changes in purchasing only showed up later.
“Within a few months of that feeling setting in, the decision gets made.”
“We already had a network of agencies, and we’d more or less decided in advance who we’d move this work to.”
Churn spiral
The pattern: how repeated issues can weaken a client relationship
- 01
An issue is raised
The client points out a mistake or a way of working that differs from what was agreed.
- 02
Friction begins
The same issue happens again, even after the client has raised it.
- 03
Confidence declines
As issues recur, the client becomes less confident that the collaboration will improve.
- 04
Concerns are discussed internally
People on the client side begin discussing difficulties in working with the partner.
- 05
Work may move elsewhere
The client may consider other partners or gradually reduce the collaboration.
The relationship may already be weakening while the work continues.
Pattern identified in research interviews with client-side decision makers.
We also asked interviewees what the first sign was that the collaboration might not continue. The answers were everyday observations the partner could have picked up on:
“If a meeting feels like a waste of time and you don’t get anything more out of it, it’s not moving things forward.”
“We got to the point where our team was already frustrated in advance whenever we had to brief [the agency] on something.”
The three findings below describe what decided whether the collaboration continued, and what account owners can do about it.
Finding 1/3
The value of the collaboration had to be clearly positive and tangible to the client
Clients judged the collaboration as a whole: what it delivered relative to its price, and relative to what it demanded of them. A good end result wasn't enough on its own. In the interviews, value eroded in three ways.
When value turned negative
Client-side decision makers told us that at some stages of a collaboration they had been unsure whether the partner could deliver the project as agreed. They found themselves chasing status updates, watching deadlines, repeating instructions and coordinating work they expected the partner to handle. Getting a project or another large piece of work over the line with the partner could come as a relief to the client, even if the collaboration hadn't met expectations.
Interviewees said they valued a partner who takes care of its own area of responsibility and lightens their workload. When the collaboration added coordination and extra hours instead, the value of the partnership dropped, even if the final result was excellent.
“You have to brief well yourself, but if you have to start telling the agency how to do things, that’s not good.”
“It’s a bad sign if you’re left with even a slight feeling that you’d have done it better yourself.”
“Putting extra project management on our plate isn’t good partnership.”
When value was unclear
When clients couldn't see what the partner was doing, they started to wonder whether the work matched what they were paying for.
An example from the interviews
One company we interviewed told us about a partner it had bought digital development services from on an ongoing basis. They had agreed on monthly meetings, and under the contract the company paid for an agreed number of hours of development work each month.
The client had access to the same system the partner worked in. To them, it looked as if no development work happened during the month, and everything was done the day before the monthly meeting. The client had understood that development would be carried out actively throughout the month.
The client began to wonder whether they were paying for work that wasn't really being done. They didn't feel they got a clear answer when they asked what development work had been done that month. In the end, the company switched partners. They never found out what had actually happened. All that remained was the feeling that the collaboration wasn't worth continuing.
When the partner's expertise didn't show
Clients were buying expertise they didn't have in-house. So they expected the partner to bring its own ideas and suggestions, not just execute the brief.
“The decisions come from the client, but the proposed solutions have to come from the partner.”
“If the improvement ideas stop coming, you know things are starting to fade.”
Finding 2/3
Clients were committed and tried to fix the situation
Once a partner had been chosen, clients didn't want to give it up lightly. They said individual failures are part of any collaboration, and they were willing to put in effort to get things fixed.
Every client we interviewed had first raised issues as part of day-to-day work: they asked for fixes, made suggestions or asked about things they didn't understand. Escalating to the partner's account or business leadership was a last resort. In the interviewees' experience, things could still be fixed at this stage.
“First we try to develop the current relationship: we give feedback and say what isn’t working. If nothing changes despite our efforts, the relationship ends.”
Clients said they raised issues with the people at the partner they worked with day to day. They trusted that the issue would be noted and handled properly, whoever they had told.
Professional services leaders described the same thing from the other side. They acknowledged that information about a client's dissatisfaction sometimes stayed with the people the client had told, and didn't always reach those who could have acted on it.
“I only hear one side of how things are going.”
“The risk is that client satisfaction is based on interpretation.”
“Neither the client nor the expert readily tells me, not until things spill over.”
Interviewees stressed that the situation can often be turned around if the partner reacts in time.
“These can almost always be won back. It depends entirely on how the agency itself reacts.”
“Ideally, something like this should never come as a surprise to the agency.”
Finding 3/3
The deciding factor was whether the client's comments and concerns were taken into account
A typical sequence came up in the accounts of the clients we interviewed. It began with an ordinary request or reminder. For example, the client reminded the partner that the report should arrive before each monthly meeting, or that meeting notes should record decisions, owners and deadlines. Interviewees saw a first reminder like this as a normal part of working together, not yet a problem.
Friction started when the same thing happened again. The report was late again, the next set of notes was again missing owners and deadlines, or the team moved a plan forward without the client's approval. Clients said they had to keep reminding the partner of what had been agreed and explain again what they needed for the collaboration to work.
“Sure, these things happen now and then, but if they happen all the time, the agency gets replaced.”
“When the same poor practice keeps happening, even though I’ve made it clear I’m not happy with it, that’s when I start thinking about other options.”
At that point, they said, it was no longer about a single report or set of notes. They began to doubt whether they could trust the partner to handle things as agreed.
Recurring issues also eroded the value of the collaboration. The client spent time explaining the same things over and over, and in some cases the uncertainty about what the partner was actually doing grew month by month.
Sometimes the partner tried to solve the problem in a way that didn't address its root cause. One example interviewees gave was staff changes that turned out to be cosmetic fixes: the underlying problem didn't go away. At that point, clients might ask other firms for proposals or gradually move work to partners already in their network.
“We did give feedback, but the fixes never landed.”
A change in strategy or priorities could also be a moment to reassess partners. One experienced decision maker on the buying side told us about ongoing difficulties in a collaboration. When the company adopted a new strategy, that became the moment they decided to switch partners. The new strategy provided the occasion, but the decision was driven by the problems that had surfaced earlier in the collaboration.
People and chemistry mattered too. Interviewees talked about staff changes, and about promises made during the sales phase not always carrying through to day-to-day work. Professional services leaders recognized the same thing from their side.
“What happened was that the best brains and people were there charming us in the pitch, and then in reality the juniors start running the day-to-day work.”
“That’s when I have to step in: when I notice friction between the client and an expert, when the client starts questioning the expert.”
Professional services leaders recognized why the need for change is easy to miss. Small things get lost along the way, the collaboration is only reviewed once the project is over, and the contact who gives open feedback isn't always the one who decides whether to continue.
“If a client is 90% satisfied, there’s some small thing bugging them.”
“Once a project has ended, the client may have little motivation to give feedback, and they may not remember, or say directly, if there were problems.”
“The contact person may be satisfied, but the one paying isn’t.”
“A decision maker can terminate the contract even when the day-to-day collaboration is working well.”
“The IT decision maker can be really open, but do they make the purchasing decisions, or is someone else holding the purse strings?”
When client retention was well under control
Not all professional services leaders saw client retention as a problem. In one in five interviews, leaders said client retention was well under control.
Especially in smaller firms, client relationships could be long and personal. They felt trust between client and partner was high, and an easy, ongoing dialogue made it natural to raise even difficult issues.
Leaders felt their account owners were professional and kept asking the questions that can feel uncomfortable but matter for the continuity of the collaboration.
Challenges were described more often when a firm had many accounts, when the client side had several contacts, and when knowledge of the client's experience was spread across many people.
About the research: We conducted 12 interviews with experienced buyers at large companies who use the services of several professional services firms at the same time. We wanted to understand in which situations they had decided to end or scale back a collaboration with a service partner, such as an IT, digital, communications or marketing services firm. We asked them to describe, without naming the partner and in as much detail as possible, the chain of events that, from their point of view, led to the collaboration being scaled back or ended, and how long it took from the first doubt until that happened. We also conducted 50 interviews with leaders of firms that provide professional services to businesses, about how client retention challenges show up in their work. The churn spiral describes a pattern we identified in the interviews with client-side decision makers. The material is qualitative.