Every business celebrates the addition of a new client with a bell or a high-five. However, when it comes to client retention, you don’t usually see the same level of excitement. That doesn’t make client retention any less important than acquiring new logos. In actuality, maintaining clients is one of the most important parts of growth and profitability for many client service organisations. Hence it is important for every organisation to follow proper customer retention methods.
So, what factors contribute to a high client retention rate?
According to a survey, a 25 percent retention rate after eight weeks is deemed above average in the media and financial industries. In the SaaS and e-commerce worlds, a 35 percent retention rate is considered “elite.”
That’s quite low. And it demonstrates the enormous potential here. You can achieve huge growth just by increasing client retention.
Why is it so important?
This guide will teach you how to do just that, as well as nine client retention tactics that can easily increase your revenue by 25% or more.
Ready? Let’s get started.
What exactly is customer retention?
Client retention is the capacity to keep a client for a long time and create a strong relationship with them.
Strong client relationships are critical for client service organisations because they establish trust between both parties by providing constant value and an overall positive experience.
When your clients succeed, you succeed as well.
Why is client retention so crucial for your business?
The basic fact is that acquiring a new client costs 5 percent to 25% more than keeping an existing one.
Even if you’re not actively seeking new clients, the time and effort you put into client acquisition will add up. The more individuals that are involved in your sales process and the longer it takes to close a deal, the more money it costs you.
You must keep your clients on retainer or trust that they will engage you again and again to offset those expenditures. To put it another way, you must be their first choice whenever they have a need.
The math is straightforward. A client becomes more valuable the longer they stay with you. Not only do loyal customers have a higher lifetime value, but they also spend more on each transaction.
While revenue is the primary motivation for client retention, it is far from the sole one. Client retention is also a measure of how happy your customers are with your offerings. And long-term growth and success are dependent on client happiness.
Do your customers love collaborating with you? Do they value the results you provide? If that’s the case, they’re more likely to renew contracts and refer you to other businesses.
Let’s be real. Nothing beats positive word-of-mouth promotion from satisfied customers!
9 Client Retention Strategies That Work
Let’s take a look at some easy client retention methods you can implement right away to keep your customers engaged for the long haul.
1. Make them eager to return
We know it seems obvious, but it’s easy to overlook: the prospect of terminating services with you should send your clients into a panic. Your dependability should be valued and sought for.
Clients should want you more, even if it seems stupid. And they frequently do. To make this happen, keep the following in mind:
- People buy from companies that they are familiar with, enjoy, and trust. You need at least one champion within the customer organisation who actually likes you and defends you whenever another provider is mentioned.
- People frequently purchase to fill a void. It will be easier to maintain a client if you supply something that they appreciate but can’t obtain anywhere else. We’re also not talking about re-engineering your entire company. You’re there to make their lives easier, whether that means saving a few minutes or removing a layer of stress.
- People purchase products from companies that make them appear good. Anything you can do to make your client look like a superstar will propel you from friend to “I can’t live with you” territory. That is why customer service and training are critical. More on this in a moment.
- People buy from companies that have become second nature to them. For many professionals, Starbucks is now their first stop on their way to work. It’s like waking up on the wrong side of the bed if you don’t have your Starbucks. People used to read newspapers in the days before the internet. They’d take a seat with their coffee and read the news.
Tip: Brainstorming ideas to become a “habit” is a fantastic customer retention exercise.
2. Make renewal simple
Remove anything that causes friction in your rejuvenation process. Don’t make it tough for individuals to continue working with you by slowing them down.
Putting oneself in your clients’ shoes is the easiest method to do this. What would make it a no-brainer to renew your contract or recruit you for a larger, more lucrative project?
3. Concentrate on achieving success quickly.
Within the initial few days of signing the contract, your clients form an impression of you that will last a lifetime. It’s critical to make a good first impression on them if you want to keep them.
The best approach to accomplish this is to design an onboarding process that includes some quick wins. Solving their problem is the best approach to increase customer loyalty and decrease churn.
Client retention, in other words, is all about reducing their workload and solving their problems. Use RisePath PlanCentral to boost efficiency.
With this software, you can quickly assess the status of a project and make any necessary modifications or revisions. Don’t let a project fall apart before informing the client.
Give them real-time updates on the project so they know you’re on top of things.
4. Get regular feedback from clients
You need continuous feedback from your clients to know if you’re meeting their expectations. There are several options for doing so:
- First and foremost, simply ask. For getting feedback, you don’t always require a complicated procedure. Organise a status meeting. Provide them with an update on the tasks you’ve performed thus far. Also, inquire about their satisfaction with your progress.
- Send a Net Promoter Score survey to your customers. According to Frederick Reichheld, the originator of NPS, increasing customer retention rates by merely 5% can raise earnings by 25% to 95%. You can keep track of how satisfied your customers are with your services and identify areas for development by sending an NPS survey.
- Send a satisfaction survey to your customers. There are three or more questions in this open-ended poll. Inquire about whether the results are satisfactory, what makes them happy about your services, and what could be improved.
- Negative input should not be ignored. It’s tempting to dismiss the complaints that come in, especially since you know that the vast majority are unjust. However, certain complaints can reveal places where things aren’t operating as effectively as you assume. Negative input should be listened to attentively (and objectively). Check it for any truth. Then share any new information with the appropriate people in your company.
- Request references. When you’ve delivered a big win and your customers are dancing in the aisles, it’s time to ask for a testimonial. Request a video or an interview for a case study. Then utilise their feedback as social proof to attract new customers and keep existing ones for a long time.
Know your numbers
Three figures will tell you whether your client retention efforts are effective:
- Customer retention rate
- Customer turnover rate
- Client lifetime value
If you’re losing customers, concentrate on tracking and improving these figures. This is how:
- You’ll need three numbers to calculate your client retention rate:
- The number of clients at the start of the time period in question (B)
- At the end of the time period, the number of clients (E)
- The total number of new clients you acquired throughout that time frame (N)
Here’s the client retention formula::
(E – N)/B
Subtract #clients (new) from #clients (old) (end of time period). Multiply that value by the number of clients (beginning of time period). Then multiply by 100 to find the percentage of clients who stay with you.
You’ll need two numbers to compute your client churn rate:
- The number of clients who have left (C)
- The total number of consumers you have (T)
The formula for calculating client churn is as follows:
Subtract the #of clients (churned) from the #of clients (total). After that, multiply by 100.
You’ll need two more pieces of information to determine your client lifetime value:
- Purchase frequency of your client (F)
- The value of their typical order (V)
The client-value formula is as follows:
F * V
Multiply the average order amount by the purchasing frequency. After that, multiply by 100.
6. Maintain contact with your customers.
People prefer to buy from companies they know, like, and trust. You must make them feel seen and heard in order to get their favour.
That is why you must foster a collaborative relationship with your clientele.
From the start, show your clients that you care about their happiness and success. Make a place where you can simply communicate, interact, and collaborate with others.
7. Provide better client service
Low client retention or churn rates indicate that your customer experience isn’t up to par. Your customers have concerns that aren’t being addressed. They’re having trouble seeing the value in your product or service.
Help them succeed with your products and services by being proactive. You can do this by forming an on-call support team for your customers.
With access to RisePath‘s ticketing customer care solution, Desk, agencies get the best of both worlds.
Allow your customers to speak with real people or, at the absolute least, receive a rapid response so they may get the service they require. This will generate a great deal of goodwill and make client retention much easier.
8. Implement a client retention strategy.
If no one owns the project, it will fail. Consider implementing a client retention programme to ensure that client retention remains a high focus.
Create a team whose primary goal is to spearhead efforts that promote client loyalty. Here are a few examples to get your first team started:
- Send out regular engagement email campaigns.
- If disgruntled customers renew, offer them incentives.
- On customer anniversaries, send a gift, greeting cards, or gift baskets.
- For new programmes or goods, form beta test groups.
- To gain immediate input on your ideas and processes, form a customer advisory committee.
9. Be consistent(ly good)
A positive client experience is a significant differentiator. This is especially true if your industry has a reputation for poor service.
Simply being available to your clients allows you to establish a reputation as the finest in your field. This can be accomplished by being open and honest about both your triumphs and failures.
The fastest approach to ensure your clients are happy and satisfied with your services is to keep them updated. It’s equally important to say “you can” even if you can’t.
To better understand your available resources for certain projects, use RisePath PlanCentral. Perhaps a certain team already has too much on its plate to fulfil a new client request.
Instead, make sure you know who has the resources you need so you can give exactly what your client wants without having to hold fire drills or work late.