We all know that client retention is more important than acquiring new business, yet many service providers struggle to achieve consistent, ideal retention.
Our two experts, Tony Benedia and John Kandemir, working in contract management services have 60 collective years of experience between them across industries like higher education, K-12, and healthcare.
Here, they’ve identified the top reasons service providers struggle with retention and how to bulletproof their accounts. While perfect retention isn’t guaranteed due to uncontrollable factors, taking these steps will improve client retention.
1. Poor Service Quality, Operational Results
If a provider fails to consistently deliver on its promises of consistent service quality, client & customer satisfaction suffer. While this seems obvious, many providers overlook it until it's too late - often only surfacing when an RFP is issued and a customer evaluator raises the issue.
WHAT TO DO? Closely monitor service quality through tools like Voice of the Customer (VOC) programs, focus groups, surveys, secret shoppers, and social media listening. Even a few vocal dissatisfied customers can cause significant reputational damage. Conducting Fresh Eyes audits, conducted with both internal and external experts, can identify shortfalls and areas for improvement that may not be apparent to the local operating team. Re-proforma the business as if you were a competitor to uncover financial opportunities and maximize results.2. Misalignment with Client Goals and Expectations
In addition to making sure the provider is compliant with the terms of the contract (which sometimes or after a few years they may not be), also making sure deliverables are closely aligned to client goals and expectations.
WHAT TO DO? Ensure the Front-Line Manager is fully aware of the contract details and monitors the client's evolving goals and strategies. Regular touchpoints, such as face-to-face meetings, business reviews, and documented updates, are essential for presenting status and future plans. This includes Annual Expectation Meetings, Quarterly Reviews, and Monthly Reports with photos and data. Understand the client’s strategic plan and establish yourself as a trusted advisor, both for the services you provide and beyond.3. Relationship Management & Effective On-Site Team
This is one of the most critical factors in retention. An ineffective on-site operations team that isn’t aligned with client goals or is not advocating for the service provider, poses a significant retention risk. Often, you may not realize there are issues with the on-site team until it’s too late.
WHAT TO DO? Regularly assess your on-site team by establishing and monitoring KPIs (Key Performance Indicators). Gather feedback from the client and other key stakeholders on the team’s performance and leadership. Having another leader meet with the client not only provides insight into the team’s performance but also shows the client that the service provider offers more than just the local team. Service providers often retain on-site leaders based on their client relationships, but keeping an underperforming leader for this reason is a mistake.4. Meaningful Innovation
Assume your competitors are constantly monitoring your performance, highlighting "innovation" to your client, and claiming that you’re stagnant while they’re always finding new ways to improve. It’s not just any innovation, but meaningful innovation - relevant ideas that make a real impact by improving efficiency, reducing costs, increasing revenue, or addressing the client’s specific needs. This can range from small improvements, like speeding up lines with self-checkout systems, to truly revolutionary innovations, such as robotic food preparation and service.
WHAT TO DO? Innovation can come from many areas, ranging from the company’s 'stage-gate process' - a formalized methodology used to guide the development of new products - to more practical applications, such as 'best-in-class practices' within similar accounts in the company.
Other sources of innovation can include vendors, industry organizations, employees, and customer feedback. However, rather than simply tossing ‘innovation’ ideas and hoping something sticks, it’s important to address the client’s unmet needs to ensure the solution is relevant. Remember, innovation doesn’t always mean technology or something entirely new—it just needs to solve a unique challenge or problem. If new programs at other accounts could benefit the current client, retention is the perfect opportunity to reconsider them. Take clients on tours of innovative programs at other accounts or retail locations to showcase these options.5. Failure to Adapt to Changing Needs
Clients’ needs can change, whether in terms of food offerings, facility management services, or technological advancements. A provider that is too rigid or unable to anticipate and adapt to these changes will lose out on contract renewals.
WHAT TO DO? Keep a pulse on the client’s environment to ensure you are aware of any changes, including shifts in management hierarchy, customer demographics, regulations, industry trends, and more. Regular communication and feedback loops, including surveys, are critical. Additionally, having adaptable solutions and a quick response time can be instrumental in establishing yourself as a trusted advisor who can co-create solutions. Explore new services and bundling opportunities to deliver financial value.6. Client's Internal Changes
A shift in key decision-makers or organizational priorities can lead to a reevaluation of all contracts, with new leadership potentially preferring a different provider. Similarly, shifts in organizational strategy, including mergers, acquisitions, or regulatory changes, can result in a re-evaluation of contracts with service providers.
WHAT TO DO? As soon as a change occurs - or even before it does - it is critical to set up meetings with the newly appointed decision-makers to understand their priorities while ensuring you demonstrate historical accomplishments aligned with the success of the client organization. Understanding any historical biases the new administration may have against the service provider can help you develop proactive strategies to safeguard the account.7. Staffing Issues
High employee turnover is one of the most critical challenges in food and facility management. Frequent staff changes or inconsistent staffing can disrupt service quality, cause dissatisfaction, and even lead to contract violations. Additionally, training and skill gaps can result in inefficiency, errors, and a poor experience for both the client and their end-users.
WHAT TO DO? Implement a comprehensive hiring, training, and development program to attract and retain top talent. Ensure staffing levels comply with contract requirements, and avoid cutting corners to improve margins by leaving positions unfilled. Regular employee surveys, along with recognition and reward programs, can boost morale and engagement. Empowering and supporting employees is key to improving retention and elevating your brand, as they are the first point of contact with your customers.8. Competitive Offers from Other Providers
Your clients will receive calls and visits from competitors, no matter how busy they are. Competitors will always find ways to reach them, regardless of the quality of your program or how much your clients love it. Competitors may pitch cost savings, innovation, or other factors that appeal to your client. Savvy competitors will identify opportunities to capitalize on, exposing vulnerabilities if there are gaps in your program.
WHAT TO DO? If you're implementing most of the strategies outlined above, you should be well-positioned to fend off the competition. However, this doesn’t mean your account is secure. Since your client is being targeted by highly trained and motivated sales professionals, it's wise to have Business Development Leaders who can counter competitors. Relying solely on operators, who are trained to run the operations but may lack sales expertise, can leave you vulnerable.
Delivering consistent and exceptional service, building strong, broad, and deep relationships within your client organization, and positioning your organization as an integral part of the client’s team - rather than just a service provider—are also crucial. Educate the client before the RFP process on the competition's approach, which may include lower staffing, reduced hours, wages, benefits, unrealistic sales projections, and conditions that void guarantees if participation targets are not met.When operations are running smoothly, complacency can set in. This is when disruption is needed to showcase our value as problem solvers. 'If it isn’t broke, break it and make it better.'
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*IMPORTANT NOTE: The Partnership360 Healthcheck can be completed entirely anonymously. You'll receive an overall Partnership Health Score at the end. If you'd like the full report, we'll only ask for your email address at that point.This article was co-authored by John Kandemir and Tony Benedia
John Kandemir
CMO in Residence
John Kandemir has over 30 years of experience in Marketing practices in both service and manufacturing organizations. John is 4xi's Chief Marketing Officer in Residence.
Tony Benedia
Senior Consultant, Strategy and Operations
Tony Benedia is a Senior Consultant in Strategy and Operations with over 40 years of experience in Contract Management Services.
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Interested in client retention? Some great tips here from John Kandemir and Tony Benedia from 4xi.