Keeping clients happy and retaining them is a crucial part of running a business. It costs approximately five times more to find new customers than to retain a current customer. Keeping great relations with all of your clients can lead to many opportunities for your business, whether that be referrals, more company exposure, or new leads. It takes a long time to build credibility within your industry, but a few bad reviews can leave your company with no business. Client retention should be top of your list as a business owner.
Why is Client Retention Important?
The simple fact of the matter is that client retention is important from a financial standpoint. The cost of acquiring new customers is much higher than retaining existing customers – almost 5 times higher! Not only that but for businesses that rely on repeat business, the success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%! There is a direct link between high client retention and increased profits. Increasing customer retention by 5% can increase profits from 25-95%!
So, how can you actually improve client retention at your organization?
How to Improve Client Retention
Regularly Communicate with Clients
Any channel of communication that your company can regularly use with their clients will go a long way for a positive relationship. Communication can occur every week, biweekly, or even every month. Just talking to your clients on a regular basis will indicate that you keep the client’s company in your mind often. Over-communication is better than no communication. If the client is kept up to date on the current project, they will be more inclined to trust you. Your client should know why they are paying money to your company for your services! Also, find a communication channel that suits you and your client’s needs. Whether that be by phone, email, or messaging service, try to find something that is convenient and mutually beneficial.
Responding to emails quickly can be something that is overlooked often. Sometimes, people read an email and forget or don’t even respond to it. These mistakes must be avoided to keep at least a cordial relationship with your client. Typically, the maximum limit you should respond to an email is 24 hours. A survey by MailTime.com revealed that 52% of people who send a work email expect a response within 12-24 hours. A quick response can show that your company cares about its clients and that if something urgent were to come up, your company would be there to respond rapidly. The same goes for any outreach from the customer – particularly if they are facing an issue. Your reaction to issues is often more telling than getting something right in the first place.
Wanting to know about your clients can seem a little intrusive, but not if you do it right. Building genuine relationships helps instill a sense of trust and familiarity between your company and your client. You can build relationships through several simple things such as knowing about your client’s current projects, their family, and their interests. Always putting on a business front every time you meet clients is not necessarily a positive aspect. You should be able show a bit of personality as well! Clients usually like working with a person who shares the same values or similar lifestyles. In addition to knowing these simple things, you can also celebrate anniversaries, such as your client’s one-year company anniversary. Sending handwritten Christmas cards and thank-you notes can also help your company be top of mind for your clients.
Be Careful of Overpromising
Being eager and overpromising can potentially damage the credibility of your company to your clients. It is better to calmly analyze and be realistic with the deadlines you give to your clients. Clients do not like companies who say one thing and then do another. Actions speak louder than words. Set realistic timelines with your client and make sure both sides are happy with it. You always want to make your clients feel like you provide value to their company. Also consider giving them value-added that goes beyond what any of your competition offers, and your client will be more receptive and positive toward your ideas. With innovative and fresh ideas, your client may even potentially refer you to their peers and partners!
Tailor Your Work to the Client
Giving a great experience to the client will help retain them. If you copy and paste your work from client to client, they will not be happy. Work hard to dig into their core values and find a personalized solution for their problems. Most clients will not be happy to see cookie-cutter service. Another area where your company needs to tailor to the client is in how you treat each client. Each client will have a different corporate culture, and your company needs to match the communication style of each client. If you tailor your work to the client, the client will feel valued and know that your company is working to help them succeed.
Feedback, Feedback, Feedback
Asking for feedback can be a powerful tool. Instead of conducting market research and wasting time and money, you can just ask your clients for feedback! According to Chief Outsiders, 70% of unhappy clients turn into brand advocates if a mistake is fixed beyond their expectations. There are many ways you can ask for feedback, whether that be an email, a survey or a questionnaire. Not only will this help your company improve your service or product, but it also indicates to your clients that you care about their opinion and that you plan to use their suggestions. When you make changes to your service or product based on your client’s feedback, it shows your company is dedicated to put out the best possible product.
A lot of keeping clients happy is relationship building. Managing the relationship between your company and your client is not an easy task, but a necessary one. Ideally, all the relationships between your company and your clients are positive and beneficial for both parties involved. When you build that relationship with your clients, they will be more willing to spend money on your company. Now that you have learned all about client retention, check out our blog on employee retention!