Client retention is overlooked because it’s not sexy.
It’s not as exciting as bringing in new clients. And maybe it can even sound boring.
But developing a powerful client retention strategy that you can actually implement on a consistent basis is far from easy. And there is a missing link that can undermine your retention efforts.
Benefits of retaining clients include:
- Previous clients are easier and cheaper to sell to, compared to new clients.
- Referrals will only be made if the client likes you and what you did for them, and remembers you.
- Future revenue includes the Life Time Value (LTV) of the client, including referrals and re-purchases.
- Creates momentum for your business with an expanding client base, compared to finding one new client after another.
68% of clients stop buying because they think you don’t care anymore
Research studies¹ have shown that clients leave a business primarily because they believe “the company doesn’t care about me any more”.
Video: Stuart Ayling explains more about client retention:
From the research it is evident that people would like the companies they buy from to keep in touch with them. And other studies have shown that email is the preferred contact method for customers to hear from companies they have previous purchased from.
As a provider, the challenge is to keep the communication relevant, timely and valuable for clients.
To be relevant and valuable means you (and/or your team) have to understand what your clients will benefit from. You need to be close enough to your clients that you know what they would like to achieve, and what their greatest challenges are.
And you need the commercial nous – business sense – to recognise which pieces of information or specific resources would be of value for particular clients.
You need to ensure each touch-point in your client retention program has value for the client and bolsters your connection with them.
It is also a commercial reality that your clients (even after you have completed your work for them) are being subject to competitive approaches. You can’t expect your clients to operate in a bubble where they never get offers from your competitors.
Ideally you would like your clients to be so closely associated with your (and your business) that they don’t even pay attention to approaches or offers from competitors. In many cases you want clients to consider you as their Trusted Adviser (a term coined by David Maister) and rely on your guidance within your domain of expertise.
This is why having a client retention strategy can make a lot of sense, especially for businesses which don’t have frequent re-purchases. You need a valid reason, and a reliable system, for staying in touch and remaining top-of-mind with your clients.
Too often client retention is left to the last minute.
I compare it to doing regular exercise or eating a balanced diet.
Everyone knows that regular exercise is a good thing to do. But few people actually pay attention to the planning and discipline required to make it happen.
And the same thing happens with client retention activities. If you leave it to the last minute, when your work with the client is finished, it can seem like a hard job to then activate another process.
And sometimes the client may not be expecting any follow up. And that can make it even more awkward to stay in touch.
That’s why I recommend client retention starts at “Hello”.
Traditionally client retention is seen to be the thing/s you do after the ‘sale’ is completed.
A few examples:
- For a Mortgage Broker that moment of completion would be after settlement of the property.
- For a lawyer it would be once the final contract is written.
- For a technical services team it would be after the system has been commissioned.
- For an education provider it would be after the student has graduated.
But I suggest you look at it a different way. I think it’s more effective to create a seamless process of working with the client – before the conclusion of your business – that leads into post-conclusion follow up.
As part of your work with your client you can set the expectation of follow up and explain what you require of them and what you will be doing. Seamless.
If you leave client retention communication activities as standalone tasks (or worse, as an afterthought) you run the risk of creating ineffective communication that lacks authenticity, such as this Christmas letter I received from a mortgage broker a few years ago.
The missing link in client retention is the planning that connects the client relationship with the follow up activities.
Take time to develop a client retention process that begins with “Hello” and carries through your client work to seamlessly connect with post-conclusion expectations of ongoing contact.
Plant the seeds for follow up during your work with your client.
Reap the rewards in the future.
Image credit: liquidnight