There are many reasons we end up saying farewell to clients, some are completely beyond our control, others not so much. But have you ever considered the true value of that loss? It’s far more than the fee they were paying you!
Client retention, in my opinion, is something that should be managed and monitored as closely as the cash flow in your business – however, it very rarely is.
Losing clients for legitimate reasons is one thing, but often I find businesses are far too flippant about letting customers go. “Oh, they were only paying £100 per month,” “We’ve finished their job,” etcetera, etcetera.
If I ever hear this from a coaching client – I give them a little exercise to do. Don’t consider the income you’ve lost, consider the costs to you of replacing that business.
How much does it cost you to bring in a new client?
Think about what you spend on marketing and advertising; the time and money spent on networking; how many hours do you spend sitting in sales meetings and drawing up proposals and quotes? Try adding it up – I’m sure you’ll be surprised!
For argument’s sake, let’s say each new client costs you £1,000 in time and money before they sign on the dotted line. Would you rather keep earning £100 per month guaranteed income, or spend £1,000 just to stand still?
Client retention makes sense from an economic point of view – so it’s really important to keep track of how many clients you’re keeping and losing as well as monitoring the new business you’re winning. To successfully grow a business – yes, you need new customers, but you want to build your client list, not replenish it!
If you’re losing clients on a regular basis, it really is worth the time and effort considering what you can do to keep them. Here are a few of my suggestions:
1 – Get feedback
Do you know the real reason they’ve left? It’s always worth a frank conversation asking for honest feedback of your service, and an explanation of why they’re leaving. You may just pick up some pointers that can prevent you losing another client. After all, how can you hope to improve if you don’t know where you’re going wrong? I like to ask, too, if there’s anything we could have done differently to make them stay.
2 – Communication is key
Client relationships often fail due to lack of communication, so make sure you’re in regular contact with all your existing clients. Ask them while they are still with you – what can we do better? It could make all the difference!
3 – Address their niggles
It’s not always big things that can strain a client relationship, it’s the little niggles – if they get ignored. By keeping in regular contact, you can find out about any issues before they become major problems. The important thing is to sort them out promptly, and show you take customer service seriously!
4 – Deal with complaints
If it does get to the stage where you’re faced with a customer complaint, you need to take 3 steps:
- Fix the problem (as quickly, thoroughly and professionally as possible)
- Investigate why the problem occurred in the first place
- Put measures in place to prevent it happening again.
We’re only human and things do go wrong, but you will be remembered for how you put things right! And always keep the customer apprised with what you are doing to correct the issue.
In conclusion – ensure your customer service and communication is top-notch, and you’ll reap the rewards in client retention and customer loyalty. And to go the extra mile – think about offering a customer loyalty scheme to sweeten the deal for staying with you. Keep in mind the value to you – saving you heaps in winning new business!