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Living its first blissful decade of existence with no competition in its business of providing outsourced payroll services, Paychex Inc. paid scant attention to preserving existing clients–that is, until 2002, when a client attrition study documented that more than 20% of the client base had evaporated. Not only did each loss represent the elimination of prospective revenue, but Paychex actually absorbed a loss with each departure, thanks to front-loaded costs from commissions and setup. “It was clear that a redeployment of our priorities was necessary,” says Frank Fiorille, director of enterprise risk management at Rochester, N.Y.-based Paychex, with $1.9 billion in 2006 service revenues.

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