Client Retention

THE PROBLEM

Retaining clients is a critical component to growing any business. It is easier and less expensive to retain happy clients. Without repeat business, you’re always looking for new clients. If buyers continue to do all their research on-line, finding those new customers is an arduous and expensive task. When you have a good relationship with your buyers, they will help you find new customers by referring you to their family and friends. Bad relationships, on the other hand, can spell doom with the negative word of mouth, especially if social media is the way they spread that bad press.

What are some symptoms of client retention problems?

Your client retention rate is very poor or falling and you don’t know why

The main reason why customers leave a company is because they believe that you don’t care about them. Almost 68% of those who leave feel this way.

Another reason your customers leave is because they had a bad experience with you. According to Oracle, 89% of those who had a bad experience will switch to another company, citing poor customer service as the reason. Some whose experience is bad attribute it to unfair treatment. If they perceive they are being treated unfairly, even if you don’t, that could be a trigger to move on to another supplier.

Limited access to customer support can frustrate a buyer and cause them to leave. Whether you take customer requests for help by phone, email or on-line, customers are looking for answers right now and don’t like waiting until tomorrow. If someone else’s customer service is more readily available, this could be reason to leave your company for theirs.

Just as word of mouth can work for you positively, it can also work against you. Every person who has a bad experience will tell at least two people, who in turn will pass the word along causing a ripple effect. In a recent study, it was revealed that broken promises are a breach of trust that can cause buyers to want to punish and seek revenge on the organization that failed to honor them. This revenge, many times, appears on social media in the form of a rant where many people see it.

Data from Marketing Wizdom found that about 20% of customers are lost by an average business annually due to a lack of a cordial relationship. This 20% needs to be recovered in new business just to stay even.  It would seem a wise move to work to retain as many clients as possible.

You have repeat customers but they aren’t willing to recommend you or your company

Many clients reside in what we call the Zone of Indifference. They neither love you or hate you. They are just “meh” about you and your company. If something better comes along, they will jump ship in a heartbeat. When asked by their colleagues for a recommendation, you’re not even on their radar.

A client can feel trapped in a relationship with you, maybe because their cost to switch to someone else is more expensive than they can afford. But given the opportunity to move on from this imprisonment, they will leave in a nanosecond. Their feeling about your company borders on abusive; they can’t live with you and they can’t live without you.

You have to earn your customers’ loyalty continuously. As soon as you let down working on the relationship, your competition will be knocking at their door. If your customer is not recommending you, there is a problem that you need to fix.

You don’t have Customer Retention Strategy

So many companies have strategies and marketing in place to find and win new clients. Yet not many spend time on customer retention strategies. The mindset in sales for so long has been that we need to get new customers and open new markets. You get what you focus on. Having a strategy that emphasizes growing existing clients will have you seeing that growth, which won't cost nearly as much as finding a new client.

You don’t have a clearly defined customer experience that everyone commits to providing customers

The customer experience starts with the first contact made with a prospective buyer and continues through to beyond the support and follow up on an order. Each customer will have a definition in their mind of what constitutes a good experience. It makes a lot of sense to know what that is. In the 2021 Customer Experience Trend Survey Report, 77% of respondents reported being more loyal to a company that offers a good customer experience; 50% said that the customer experience is more important today than a year ago. 72% said they are willing to spend more from a company that offers a good customer experience. If a good experience equates to better value in the customer’s mind, then that value is worth paying a higher price.

If your employees can’t describe the customer experience, then how can they provide a consistently good one? The experience needs to be universally known and used versus being dependent upon your customer getting the one good team that provides good service.

 Do you want to retain more customers?

 The Path to Growth Starts Here

What is Client Retention?

Client retention is a company’s ability to turn customers into repeat buyers and prevent them from being stolen away by the competition.
Your client retention is highly dependent upon their experience with your company. Retaining clients is knowing your customer so well that you can provide them with an experience that is so good that they are not even interested in talking with your competition. It is about being professional, developing trust, and building personal relationships. It is about continually finding ways to provide additional value. It is the human touch component of your product or service that differentiates you from everyone else.

Why is Client Retention Important?

Gaining new customers is much more expensive than retaining your current customers - according to Harvard Business Review, between five and 25 times more expensive. Another way to look at this is that the probability of making a sale to a new customer is between five and 20%, while the probability of selling something to an existing client is between 60 and 70%. Profitability is also higher because you don’t have the client acquisition expenses connected to finding and selling new clients. Harvard Business Review also shared that a mere 5% increase in customer retention can increase a company’s profitability by 75%.

Retaining and growing repeat business is one of the key elements in growing revenue. Once someone has bought from you, and their experience was good, the chances are 25% more likely that they will buy again. And the more times they buy from you, the more likely they are to buy from you again and again. With each additional purchase, the chances go up; after two purchases it goes to 45% and after three purchases it goes to 54%.

In addition, loyal customers are a great referral source. The most influential element driving purchase decisions today is word of mouth, also known as marketing buzz. A loyal customer will provide that marketing buzz with a recommendation to a colleague, friend or family member.
To develop a loyal customer means developing trust between your client and yourself and your brand, and making sure they have good experiences with you.
83% of loyal customers will recommend your brand to others if they trust the brand. 92% of customers responded positively to recommendations from friends or colleagues.

The difference between companies that grow and those that don’t is client retention.

A mere 5% increase in customer retention can increase a company's profitability by 75%.

Harvard Business Review

Success is reliant upon how well salespeople use their skills to develop trust, learn the client’s true problem and what they value, create solutions that fit that value and support the purchase after it is made.

Let's talk client retention

How Can SEG Help?

Strategic Enhancement Group has been helping sales people learn the skills to be able to differentiate since 1984. We can help your sales team learn how to differentiate by:

Creating strategies that emphasize growing existing business

It is not a surprise that as technically oriented companies are looking for ways to grow, they're looking for ways to leverage their technical talent's ability to sell more effectively.

Identifying and developing what a good customer experience is in your business

Great customer service is often in the details. The small things that people do to communicate that they care about us and that they are truly listening to understand. The best service providers see themselves as interested problem solvers and are passionate about helping.

Teaching your sales people how to find out information that will help enhance the buyer’s customer experience

The ‘Firehouse’ provides a 360 degree approach that pulls relevant players and voices into a solution package that limits future issues; it generates urgency for implementation; it fosters confidence in a solution sourced from a depth of experiences and expertise vs. a single person.

Training your customer facing employees on how to move your customers out of the Zone of Indifference

Enhancing customer relationships begins with a mindset – a zeal – for having the customer's voice amplified and for a level of responsiveness that proves that the experience of your customer is the first priority

Training your team on how to deal with irate customers and come to a good and satisfying resolution

The ideal is to plan well so you minimize and avoid opportunities for client dissatisfaction. When you meet with your internal team, anticipate what might go wrong as the customer goes about using this solution? How can we head this off proactively so that it doesn’t become a problem?

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