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Unlocking the value of client retention
For all the emphasis businesses place on winning new clients, many can fall into the trap of forgetting to look after their existing customers as well as they should. Retaining clients does, in fact, require more investment than you may think, as just setting and forgetting the goods or services you provide to them is no longer enough to keep everyone onside. Let’s take a look at why it’s important to invest in client retention, and how you can go about executing a plan.
Why focus on retention?
First of all, business need strategies in place for both client retention and lead generation – the ratio may differ but the point remains that everyone who serves customers should know the importance of balancing both. On the subject of retention, perhaps one of the most crucial factors is that looking after existing customers can actually help you bring in new customers through strong word-of-mouth marketing. In fact, studies show that 80% of people feel that a referral from a friend is the most reliable form of advertising, which is why approximately 65% of new customers to a business come through this channel. It’s also worth considering that it can cost a business up to 5 times more to win a new client than to retain an existing one. So when you look at the effect retention has on your bottom line, the impact is pretty significant.
Strategies for retaining your clients
It’s all well and good to understand why it’s important to take care of your customers, but where do you go from here? The following strategies are simple ways to work towards retaining your existing client base.
Aim to add value beyond your product or service:
Think about the times you’ve been a given something for nothing – doesn’t it feel good? Even a small gesture, prize, or friendly email can help foster a friendly rapport that goes beyond just a transactional business relationship. It doesn’t have to be for any reason in particular, in fact those moments that aren’t motivated by making a sale or pushing a product are those that nurture an emotional connection between the customer and your business.
Keep the conversation going:
While toeing the line between no communications at all and spamming your customers isn’t always easy to follow, a steady stream of content can assist in keeping your brand top-of-mind for your clients. Being able to produce content is sometimes time-consuming, so even sharing relevant articles from other sources with your clients (attributing the ownership accordingly, of course) can provide that extra bit of value to the service you already provide. Going a step further, you could segment your database based on things like what your clients engage you for, what they like, or what they do for a living; and then provide content geared towards those groups.
Ask for feedback, and take it on board:
We all love a pat on the back, and receiving a glowing review from a satisfied customer feels awesome. But what about the times when someone isn’t happy? Rather than taking the easy option and burying your head in the sand, use negative feedback as a platform for improving your business and the products or services you provide. Beyond internalising it, let the customer know you appreciate the feedback, you’re working on a solution, and if you manage to implement a process or solution to fix the issue, let them know about it! An unsatisfied customer doesn’t always have to become an ex-customer – quickly resolving complaints can actually lead to that person engaging you again, and even recommending you to others. What a way to turn potential loss into growth!
Overall – don’t discount the value of listening to your customers. They’ve stuck with you because you provide something for them that keeps them coming back. While this information is important in generating new leads, it’s crucial to remember those clients who helped you establish your current position, and work to maintain those relationships.
Our business accountants in Perth as part of our Business Improvement team at McKinley Plowman love transforming and growing businesses. Call us today on 08 9301 2200 or visit www.mckinleyplowman.com.au for more information.
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