077: Lost People ≠ Bad: Retention Is a Leadership Problem (and Opportunity)

In this episode of No Silver Spoons, Sarah Beth discusses the critical issue of retention struggles in businesses. She emphasizes the importance of not blaming clients or team members, but instead addressing the underlying issues within leadership, systems, and communication. Citing studies from Harvard Business Review and the Journal of Leadership and Organizational Studies, Sarah Beth highlights the significance of emotional connection and transformational leadership. She outlines four key areas where retention often breaks down: disjointed onboarding, lack of personal connection, weak feedback systems, and poor narrative control. Sarah Beth advocates for an 'ethics team' or 'learning lab' approach to turn losses into learning opportunities, thus creating a culture of accountability and growth. She concludes by urging leaders to take actionable steps to understand and improve their business practices.

Chapters

• 3:04 The Retention Conversation: A New Lens
• 5:07 Breaking the Shame Spiral
• 5:51 The Highlight Reel Problem
• 7:19 A Client Story: What Dana Taught Me
• 9:12 Retention Is Not a Marketing Funnel Problem
• 16:16 What Is a Learning Lab or Ethics Team?

Transcript

  📍 Hey there, it's Sarah Beth. Welcome back to No Silver Spoons. If you're here, you're probably someone who cares deeply about your business, your people, and the human beings. Yes, the actual people, not just clients or customers or patients, but the real souls who trust you, pay you, and rely on the very business that you've created.

And today I wanna talk about something that I've been seeing firsthand in my own company and hearing echoed by entrepreneurs everywhere. And that is retention struggles. But the twist that I wanna have on this is that we're not going to blame our team or sweep things under the rug when we lose a client, a customer, a patient, whatever you call them in your organization.

' cause that's what I see the most often. We find a way to blame the client, the customer, the patient, and they're the problem and they left. We also tend to find reasons to blame our team. Our team screwed it up. Our team made a mistake. Our team isn't doing it right. We find this blame game to be the center of our conversations, and if you don't see that in your business, you might see that we just sweep it under the rug and we move on to the very next.

This episode is for leaders, you who are willing to take ownership of what's broken and build something better. We're gonna dig deep into leadership systems, communication and learning to rebuild after a loss. And if you're new here, I want you to hit subscribe and I want you to follow me on Instagram after this episode.

My Instagram handle is at No Silver Spoons podcast. And if you want to get some mentorship tips, come follow me at Mentor Sbh. Let me say something hard upfront. If someone we serve walks away, it's not just about what they said when they left. Let me say that again. If someone we serve walks away, it's not just about what they said when they left.

Now, you might be wondering what I mean by that. Now, when I say someone we serve, I don't just mean employees that leave. I mean the people that pay our businesses to work with our businesses. What I want to focus on is what we allowed before they left. What we didn't see or listen to and how we show up every day as leaders to prevent those things from happening in the future.

According to the Harvard Business Review, 20% of customer churn happens due to a lack of follow up or perceived care, not product quality. So if you haven't ever heard the word churn before, that means someone who leaves your business. Someone who exits your business for whatever reason. So think about that for a moment.

It's not what we gave, but how they felt afterward that made them leave.  Now, multiply that by every person that we do serve. People who are putting their trust in our hands, whether it's patients, clients, coaching customers, whatever you want to call them, each one has their own story. We can't keep reacting to loss.

We have to learn to understand it. I wanna be really honest with you in this episode because I don't want you to think that I just have everything all together and miraculously, I have never lost customers, and I'm just on this upward trajectory, always excelling in every single thing I've ever touched, done, or will do.

I've lost clients. I actually still lose clients. Yes. Even now, after 25 plus years of building organizations, working for other companies, mentoring teams, speaking in front of hundreds of thousands of people, structuring SOPs like clockwork, I still experience loss, and I need to say this for anyone who is stuck in the shame spiral.

Losing a client, customer, or patient does not mean that your business is failing. It does not. I don't care what anybody says to you. The reality of that loss does not mean your business is failing. Your business is struggling, your business is going under. You are terrible. We need to get rid of that stigma, and I know as an entrepreneur or a leader in an organization, that is literally how it feels.

It feels like I am failing. My business is failing. We are now going under and everything is horrible. I'm gonna say it loud and clear again. It does not mean you are failing. We've built this social media version of entrepreneurship where everything looks like a success. Highlight reel. The moment someone mentions losing a person they served, people start clutching to their pearls like it's a scandal.

Can we just normalize talking about why it happens and what we learn from it? Here's the thing, everyone online is selling you their magic potion to get new customers, new patients, new clients. Sign up with me and I'll guarantee you 100 new blah, blah, blah in a month. Listen. I'm not against growth. I actually love growth and I thrive on growth.

It gives me that instant dopamine hit like, oh yes, I got it, but I don't want one time $5,000 tickets, especially if that person walks away confused or disappointed, like it didn't work out, but they just spent $5,000. Your $5,000 client could be a hundred dollars client or a $10,000 client. I don't just want the one time, I want a lifetime relationship.

My business models are all built on having a lifetime relationship. I can't build businesses on hype, come once and get everything you've ever needed. My businesses are built on repeat relationships, referrals, generational loyalty, trust. I am not chasing some MLM style rat race where I have to sign a hundred people a month just to keep the lights on.

That isn't sustainability, that's stress with lipstick on. There's one client I had, we're gonna call her Dana. She left after seven months and on paper everything seemed fine, but after asking some deeper questions, I found that she hadn't felt heard since month three. I. She had stopped giving feedback.

She had emotionally checked out long before she canceled services. This wrecked me in the best way because I realized that this was a leadership moment, not a blame moment. Now, I'm not here to be perfect. I'm here to learn that my role is to pay attention, pay attention to all of the things, the good, the bad, the seemingly stable.

The growth. Everything in my vision, I need to learn to pay attention. Let's talk about the real responsibility of leadership. When your team sees that you care about the people you serve, they care too. And while that seems really rudimentary, I feel like we forget that it's the same as when your team sees you ignore issues or lead from anxiety.

They learn to mirror that too. And if you are someone in a virtual space where you literally only instant message, you have to learn to communicate in a way that your team doesn't feel your anxiety every time they see the bubbles appear. Leadership isn't just a title it, it isn't even just in the title, it's in the systems.

It's in the walkthrough of every SOP. It's in the way that we talk about people behind the scenes. There was a study that I was reading up on that was published in the Journal of Leadership and Organizational Studies, and it found that transformational leadership or leaders who coach, mentor, and elevate others had a direct positive impact on the customer satisfaction and the loyalty scores of those businesses.

So no retention isn't just a sales or support problem. It's a leadership one and leadership is a mindset before it's a skillset. Retention is not a marketing funnel problem. It's a follow through problem. Now, think about that for a second. If for retention is not a marketing funnel problem, why are the businesses that I know putting all of their money into marketing funnels,

because again, were you listening to someone online who told you if you sign up with their marketing agency, they're gonna get you all the new customers that you ever wanted ever?

I just want a one hit wonder if retention isn't a marketing funnel problem and it's a follow through problem, how can things change in the organization that you're leading? These are genuine questions I have for you. Here's where I see retention breakdown in companies and, and maybe this is even your organization.

I've got four key points here, four areas where I just, I see it breakdown. The first is disjointed onboarding. Now, if you're a dental office, if you're a medical practice, if you are a pest control company, you sold them on some sort of transformation. Then you handed them off like a file folder. That person who was excited and hopeful, now they feel unseen.

The onboarding of them was rushed, whether that was at the check in counter, whether that was on the phone, whether that was in their first appointment. Your welcome packet was generic. Your first touch felt bland. Maybe it told them they were just a number. And let me be clear, no SOP or beautiful PDF can make up for lack of genuine welcome.

People need to feel held. And while that seems very irritating to some organizations, and I've met them all, so I know it feels irritating. We live in a world where people want to feel valued, heard, and held as they choose your company. So our onboarding has to be better. Two, lack of personal connection, so emails with people's name on them.

Those are not personal. Connection means knowing what your client, customer, or patient's goals are, what their fears are and what success looks like for them. There was a study in the Journal of Consumer Research that showed that emotional connection is more predictive of loyalty than actual satisfaction.

That means that people don't just want their needs met, they actually want to feel known. So ask yourself, is your business relationship driven or process driven? Let me give you a sidebar example before we get to the next two. I recently hired a pest control company.

When I first got on the phone with them, I had asked them how their process works. Now, when I was vetting out pest control companies, everyone at the very beginning, the first thing they do is they shout out price. Our cost is between x dollar amount and x dollar amount. But for me. Yes, I am price savvy and I want to know how much things cost, but that's not what I'm after.

I'm looking for a solution. I don't like to see spiders and bugs in the house that I have and the house that I just recently purchased. It's brand new. So when you have a new build, it's open to the elements much more than a home that has been lived in. And so I very clearly stated what I was looking for in a service.

And since I enrolled in the one service with the one company that I started with, I've actually had to have them come back three and four times. And every time that I speak with them, they always talk to me about their process. You're going to expect to see activity. We are going to be able to come back here.

We are going to do this, this, and this. Now, while all that's great, and I'm sure they've dealt with many customers over the course of their business journey, I don't really want to hear your processes. I want to know that you've heard my concern is seeing X, Y, Z, and that you're gonna make sure I don't see X, Y, Z, and you know that those are fears of mine.

You understand what success looks like to me when I hire your company. Now, I really wish that I could have the pest control company from my hometown at the new property that I just purchased because man, they're the best company ever. They really do have relationships at their forefront. This company, every time they come to my house, in my home state, they literally bring up my trash cans.

They talk to me, they introduce themselves to my dogs every time. I mean, it is like the best experience ever. But in this new state where I purchased another property, things are different. They are a process driven company, and I haven't given you all the details of what it's like to work with that company.

I want you to think about your organization. Is it process driven? And oftentimes we go process driven because we know the problems we've had in the past. So we feel like if we just say it all right now on how it works, then we can say we've said it. And if they're mad later, we know we said it, but we're missing it there.

We're missing it by being so process driven that we forget the relationship driver that needs to exist. Let's talk about number three, weak feedback systems. Weak feedback systems. You wait until a patient, client, or customer is angry instead of proactively asking, how is this working for you? And when they do give feedback, no one owns the response.

Even worse, some feedback just gets ignored completely because it wasn't urgent. But I'll tell you what is urgent. The most urgent thing from anyone giving you feedback is perception. Silence writes stories. And if you're not speaking into the relationships of those that pay you someone else's assumptions are number four, narrative control.

You let silence write the story that client thinks you don't care. That patient assumes they're just another name on a spreadsheet or check-in list. But what if your brand had a voice that always said, we see you. We hear you. We're here. What if you have to learn to control your narrative or someone else will?

There's some incredible ways that we've learned to do this. At my organizations, we have three months of quality assurance checklists that go in to really evaluating the experience someone is having with our company. We have weekly and daily checklists that we make sure we follow through on. We have check-ins from our leadership team.

How are you changing the narrative that is being written about the engagement with your business? Let's talk about the aftermath of loss, because yes, losing a person that we serve, whatever their Title B client, customer, patient, whatever they are, it hurts. It stings to everybody on the team. Your team feels it, even if nobody says it out loud.

But this is where real leadership can show up. Now, some leaders, they lash out. They say, who messed this up? Who screwed up? They're pointing fingers. They're assuming the worst. That's not leadership. That's reaction. And in my company, we think about things from a totally different perspective, and I'm gonna challenge you to have something in along the lines of a learning lab.

Now, it's not a literal lab with beakers and goggles. It's a mental space, it is a cultural posture. When something goes wrong, whether it's a service delivery issue, a missed follow up, nobody took the patient back on time. Someone choosing to part ways for whatever reason.

You enter this into your learning lab. Now, in my company, we call this an ethics team. I'm gonna go into what your learning lab or ethics team could look like. This is a place where you're gonna ask, what did we miss? Was this preventable or inevitable? Is this a people issue, a process issue or a perspective issue?

But here's where it can really get special. I. don't just review every ticket that comes in, we learn to celebrate it. And I know that sounds really strange, but hear me out. Our ethics team, when something good or bad happens, we have a ticketing system. It's not for blame, it's for learning it. Every ticket is reviewed, not with punishment in mind, but with growth in mind.

Our ethics team, they read it, they discuss it, and if needed, we bring it up in leadership meetings. Sometimes the solution is a new training. Sometimes it's a new team member. Sometimes it's a system tweak. Sometimes it's just a conversation via instant messaging, but we always listen and why? Because if someone cared enough to raise their hand, win or fail, that's leadership.

And I want my team to know that showing up matters more than pretending nothing happened. Our ethics team has reshaped our culture. It gives people ownership, not just responsibility. And if you're thinking of starting your own, I want you to make it clear that it's for learning, not for discipline. We don't have our ethics team 'cause we want to slap the hands of those that made a mistake.

Make sure that you keep submissions easy. Don't make red tape around everything. Give visibility to the reviews that we hear from our customers. Close the loop. Share the learning with everyone. Your people want to be a part of something that is honest, healthy, and human, and that's what the ethics process has done for us here at my company.

Let's wrap up this episode with your, that's good moment. Here's what we cover today. Losing a client doesn't mean your business is failing. It means you are growing if you let it teach you. Retention is emotional. It's not transactional. It is about how people feel after the invoice is paid. Leadership shows up in the systems, in the tone, in the way you respond when things don't go right.

Blame doesn't build, but curiosity does. Your ethics process or your learning lab can shape your entire company culture and create a safe place for accountability. These aren't just for losses. They are your futures foundation. So, this week I want you to take some action steps in your business.

I want you to start a learning lab conversation. Pick one client, customer, or patient that you lost, and ask your team what everyone learned. This isn't a blame session. This is truly what did we learn? Set up an ethics style feedback form can be simple, but make it known. It's safe to share here.

Personally, reach out to one person that you serve. Customer, client, patient. Thank them. Ask them one question that matters, and lastly, review your narrative. What does your company sound like behind the scenes? Is it aligned with what you want out front? You were not called to run a perfect business. You were called to lead with purpose.

I'm Sarah Beth Herman, and this is No Silver Spoons. If this episode helped you share it with someone else, building with integrity, and as always, tag me in your stories at No Silver Spoons Podcast. If you're looking for digital downloads that will help your business grow, you can check out the link in the show notes for the store that I have that has a ton of digital downloads to help you grow, build, and sustain your organization.

Let's stop hiding in the lessons. Let's learn to grow through them. I'll 📍 catch you on the next episode.