It’s inevitable that a business will lose a client at some point. It could be your business’s fault or it could be external circumstances that are out of your control. No matter the reason, a client loss can sting and you may need to reevaluate how you operate to prevent further losses. We asked our Fast Company Impact Council members how they handled their first major contract loss or contract cancellation. For some, it involved turning inward and rethinking operations. Others took an attitude of “it happens—move on.” Here’s the hard-won experience from 14 of our Impact Council members about their first big client loss.

1. PERIODIC CUSTOMER CLEANSING

It was a government contract at my last company—not our largest, but in the millions. The reasons for cancellation weren’t clear, despite procurement rules meant to ensure transparency. There had been issues with the customer, so rather than protest, we moved the team to other contracts and let it go. I’ve found the 80/20 rule holds across B2G, B2B, and B2C: 20% of customers drive low margins but consume the most resources. It’s worth doing periodic “customer cleansing” and letting high-maintenance, low-margin contracts expire to protect margins and morale. — Eric Basu, Haiku, Inc

2. FOCUS ON EMPATHY AND COMMUNICATION

Our biggest operational challenges have come from weather and natural disasters tied to outdoor hospitality. Just two weeks before opening our Asheville property, Hurricane Helene devastated the region, forcing us to cancel months of group business overnight. Rather than handling it transactionally, we focused on empathy and communication. We sent affected guests personalized “thank you for your patience” packages with AutoCamp merchandise, a CEO note, and a Wildsam Asheville guidebook. Many clients ultimately rebooked, and the experience strengthened long-term relationships and trust. — Bryan Terzi, AutoCamp

3. DON’T WASTE THE LOSS

I gave myself a few minutes to be frustrated, then tried to look at it clinically. What worked, where did we lose momentum, and what should I have clarified earlier? The key is not to waste the loss. Write down the lessons, adjust your approach, and make the next pursuit sharper. — Todd James, Aurora Insights

4. WATCH FOR SUBTLE SHIFTS IN CLIENT ENVIRONMENTS

It was a significant blow that caught us by surprise. Looking back, we had stopped paying enough attention to the client’s evolving needs and the external factors impacting their business. While it was a painful lesson that resulted in layoffs, it served as a wake-up call. We have since transformed our culture to be far more proactive and attentive to the subtle shifts in our clients’ environments. — Logan Mulvey, GoDigital Music

5. LISTEN HARDER THAN YOU SELL

Losing a client stings. It feels a little like hitting the wall at mile 20 of a marathon. You can panic or you can slow down long enough to understand what your body is trying to tell you. We pride ourselves on being true partners, not transactional vendors. So when we lose a contract, my first instinct is to ask what we missed. Clients rarely leave over one moment. Usually there are indicators along the way, and exceptional listening helps you catch them early. AI helps us identify patterns faster, but the core principle remains human: The best advisors listen harder than they sell. — Meredith Rosenberg, NU Advisory Partners

6. PAY ATTENTION TO CORE VALUES

We’re fortunate. We tend to keep our clients for a long time. Our biggest loss was actually a decision we made. We’d been working with a holding group whose values and ways of doing business didn’t align with ours. I made the decision to walk away. Client work is essential for any small agency, but when your core values are in conflict, it’s bigger than payroll. That decision cost us revenue but gave us clarity, and the clients that came after were the right ones. — Virtyt Pula, TOML Collective

7. DON’T TAKE IT PERSONALLY

Like anyone, I took it hard. But now I don’t mind. Clients get to decide whether to stay or leave, and when they leave, that’s okay. It isn’t personal. They are doing what feels right for them. — Lindsey Witmer Collins, WLCM Studio

8. REFERRAL-ONLY BUSINESS

I’ve found that trust and relationships help a business move through major losses. That is why we have a referral-only business. When a client who already trusts us recommends us to someone, that potential client already want to trust us. Our job is to give them no reasons not to. — Justin Tobin, Gather

9. RELATIONSHIPS HAVE TO BE EARNED CONTINUOUSLY

Early on, losing a major contract felt like a reflection on the company. Instead of treating it as a defeat, I used it as an opportunity to adjust and improve. My team met with the client and asked for candid feedback. We used this feedback to rebuild processes, implement checkpoints, and develop executive communication around what we learned. The loss sharpened our focus. It taught me that relationships have to be earned continuously, not just at the initial contract signing. Since then, we have been dedicated to building long-term partnerships, which has allowed us to maintain ongoing contracts with agencies for more than 10 years. — Paul Toomey, Geographic Solutions

10. TREAT IT AS A CURRICULUM

The first real cancellation taught me something I consider foundational: Adoption isn’t retention, and relationships at the operator level don’t protect you from decisions made three floors up. We did everything right by the people we served. We just never built a relationship with the budget owner. I asked for a direct conversation with them, not to save the contract, but to understand. That conversation became more valuable than anything we learned from happy customers. We rebuilt our account health model on what we heard. The loss became a design document. Founders treating churn as a verdict fall behind those who treat it as a curriculum. — Rachael Nemeth, Opus Training

11. REVIEW EVERYTHING

Early on, every customer felt existential because we were still proving the market. When we lost a client, we got extremely close to the problem. We reviewed every conversation, investigated exactly where things broke down, and improved the product accordingly. We still operate the same way. We get close to the details, obsess over reliability, and hold ourselves accountable for driving real outcomes for our customers. — Minna Song, EliseAI

12. STAFF TEAM ON OTHER PROJECTS

Our first big project loss was the result of our client’s division closing. We had the benefit of a transition period, so it afforded us time to staff our team on other projects. It was more difficult for our clients, many of whom lost their jobs with the change. I felt badly for them. I missed working with them and the satisfaction that came from the innovative work we were doing together. — Brad Weber, InspiringApps

13. MAINTAIN TRUST

Throughout my career, I have treated every situation—positive or challenging—as a learning opportunity. Early on, I was advised to focus on continuous development and not rush growth, as experience shapes sound judgment. Guided by my mentors and upbringing, I take a cautious and responsible approach, especially when managing others’ resources, and have maintained a strong track record without causing client losses. For me, trust is the most valuable asset; results can be rebuilt, but once trust is lost, it is rarely recovered, so I always prioritize protecting my clients’ interests. — Manuel Freire Garabal, Gioya Higher Education Institution

14. DIVERSIFY CLIENT BASE

We revisited our values, our performance, what the client wanted and what we delivered, what to do differently and better next time, and most of all, we diversified our client base so that one loss would not affect the viability of our ongoing business. — Larraine Segil, Exceptional Women Alliance Foundation