5 Reasons You’re Losing Clients to the Competition

man and woman near table

Admit it. It’s happened to you.  It’s happened to all of us. You’ve invested time and effort wooing a potential new client, pulling out all the stops to impress them during your phone consultation.  You hang up giddy with excitement, positive that they’ll be returning that signed contract ASAP.  Except all you hear is crickets chirping rather than the sound of that email with the signed contract attached.  You’re baffled. It had seemed like such a slam dunk the day you spoke with them.  A few weeks later you’re even more confused when through the grapevine you discover they signed with a competitor that you know charges more.   What the heck happened? What’s causing you to lose clients?

Your first thoughts are probably to wonder what black magic your competitor is using to get them to sign.  Did they sell their soul to the devil for ability to charm even the toughest potential clients?  Before you convince yourself that some evil is afoot in your competitor’s camp let me share something with you.  There’s no black magic involved, they didn’t sell their souls either.  It’s more likely they simply aren’t making the following five mistakes.


Think that telling a potential client how much money they are going to save by using your services is smart marketing?  Think again.  Focusing on cost savings, whether during your consultation, on your website or on social media could be sabotaging you.  If you’re constantly talking about getting services on the cheap you could possibly activate skinflint mode in potential clients.  And when this mode is activated all they can think about is cost.  They’ll walk away from your consultation or click away from your website with one thing on their minds.  Could they find the same services cheaper somewhere else?  And no matter how low your rates are, there are plenty of offshore services available at dirt cheap rates.  You and I know that it could spell trouble for the client, but all of your talk about cost-savings has made the client blind to anything but getting the cheapest deal.


You decided when making your business policies that you would require a deposit, didn’t work weekends and must have 48 hours advance notice of projects.  During your phone consultation the potential client balks at the mention of a deposit.  You quickly tell them you are flexible and that the two of you could work something out.  You may be on the phone, but believe me, they can now smell the desperation.   And wondering why you’re so desperate that you’d concede what is actually a very smart business policy.  This holds true for offering to work different hours, be on call, agreeing to no advance notice or, God forbid, offering to lower your stated rates.  You may think that standing firm will lose you the client. In some cases it may, but in most cases they’ll recognize you as the savvy business person you are. Being wishy washy with your policies makes potential clients wonder why you’re so desperate and makes them think twice about working with you because of it.


This usually goes hand in hand with number 5 above.  If you’re focusing on cost savings it’s a pretty good bet you aren’t conveying value to the potential client at all.  Value has nothing to do with cost.  Value is the problem you solve for them. It’s the pain you alleviate.  It’s time you save them and the experience you bring to the table.  Money doesn’t figure into this at all. If you stress the value you’re bringing to them they’ll be willing to pay just about anything and be happy about it because it solves their problems. Not focusing on value could be why you’re losing clients.


I’ve had a lot of business professionals get a little irate with me when I’ve talked about how a free, cheap or DIY website was giving people the wrong impression.  How dare I!  I dare because I’m a consumer too, and I know how I react when I go searching for something online. I know that the way a business website looks conveys an impression of that business.  Look, I’m not saying the websites I’m talking about are horror story quality (although some still look like Geocities pages…gasp!) but many of them are outdated, amateurish or simply not confidence inspiring.

Too many of us design our websites to please ourselves rather than thinking about whether it is going to instill confidence in potential clients.  You might think crisp, clean with a minimum of kitschy graphics is boring, but in fact it may be exactly what your potential clients need to make them feel like they are dealing with a true professional.  Too many colors, backgrounds, buttons and graphics can translate to them seeing you as an amateur. That in turn leaves them feeling like your services aren’t as good or worth the rates you’re charging.

Grab their attention with your web copy, not with blinking graphics or cute images.  I’m not talking about pages and pages of boring explanations about who you are or what you do.  I’m talking about getting their attention with short, but relevant paragraphs that make them want to find out more.

If you don’t believe what I’m trying to say here, think about your own experience on the web.  I’m sure you’ve not purchased items on a website because of the way it looked before.  We don’t hesitate to purchase on sites like Zappos and Amazon, in part because their websites instill a confidence that they are who they say there are and they are going to deliver what they promise to deliver.

And drumroll please…. The number one reason is:


Maybe you’ve got a killer website, you are careful about making concessions and you focus on value rather than cost savings, yet you’re still not getting those signed contracts back.  It’s possible you’ve set your rates too low.

If you’ve done a great job at conveying just how valuable you would be and then quote a rate they consider low for that value, they are going to question why.  Of course they won’t ask you why, but they will walk away from the consultation thinking about all the reasons that you may be practically giving away all of that value.  They’ll wonder if you really aren’t as experienced as you claim. They’ll question how capable you are of running a successful business or if they’ll be left high and dry when you go under because you didn’t know how to set your rates properly.  They’ll be convinced the quality has to be lacking at a price that low. And as quick as that, they’ve written you off as a possibility.

It always amazes me the number of hours people spend researching the right business forms, or choosing the right project management site but set their rates based on what they think a client will be willing to pay.  They want to know what others would charge to compare, worrying if their rates are much higher than others in the field.  I’ve said it before, you should never set your rates based on what you think a client can pay. Losing clients is the symptom of having your rates/prices set too low. They should be based on your costs and value.  There it is again. That V word.  That’s because that’s what is important to great clients.  Clients that are overly concerned with cost are always going to be looking for a better deal and no one really wants a client like that.

Sure, it would be easier if we could blame losing that client to a competitor on hocus pocus.  Or even that they are somehow better than we are at closing the deal.  In reality, it is more likely that they have just stopped making the five mistakes above.

Have you?  To make sure, follow these five steps.

  • Don’t just shake your head, go look at your website. Pretend you’re a potential client and really see it without the prejudice because it’s yours.  If your DIY looks DIY consider investing in some help to take it to the next level. This is one of the items in your business where the investment pays off.
  • Do you talk about saving them money both on your site, in your marketing and in your phone consultations? Stop.  Take out that wording and move the focus away from money to value.
  • Not sure how to focus on value?  Start by thinking about the needs of your potential clients, then write down ways you meet them and how that benefits them.  Ahhh, Value.
  • Do you have a policies handout that you can send to potential clients before a consultation?  If not, work one up.  Now when a potential client balks at paying a deposit or giving a 48 hour notice you can simply state it’s your business policy and refer them to the policy sheet you sent.
  • Think about your rates?  How did you determine them?  Was it all about affordability?  Research what the current salaries are for employees doing the same things you are. (Prepare to be stunned) It will give you a better idea of the value of your skills, expertise and experience.

That’s right, before you know it, your competitors will be losing clients and swearing you’re a wizard in disguise, using your magic wand to turn chirping crickets into signed contracts.

Setting Your Rates Based on Value

Setting our rates/prices is one of the most difficult things small and home-based businesses face. Sadly, many new entrepreneurs charge too little which can be a stumbling block to success. Take the first step towards getting paid what you are really worth.

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Tina Marie Hilton provides online technology services to forward thinking businesses. She writes on her Tips from T.Marie business blog to share insight and information with other small businesses and entrepreneurs. It also makes her feel like that certificate in creative writing isn't going to waste completely.