Unless you’ve been building your business under a rock, you know that loyalty is everything. Not only does loyalty allow you to reduce your client acquisition costs, it helps you to keep clients longer. Loyalty drives revenue and referrals so that you can work smarter, not harder, to grow your business.
One of the statistics that I am always reviewing with my clients is that it takes on average 5 times more to acquire a new customer than it does to retain a current one. If you focus your energy and attention on keeping the ones you have, you’ll save money and make more money all at the same time.
The rate at which your clients leave (also known as a churn rate) can increase your revenues if you keep your churn rate low. According to Business Automation Specialists of Minnesota, depending on the industry, reducing your customer defection rate by 5% can increase your profitability by 25 to 125%*.
That is exactly why I was excited that Tina is paying attention to this in her business. Check out her question, which I am answering in this week’s episode of Incredible Factor TV.
“Hi Darnyelle. I’m working on my customer acquisition goals and I am trying to determine what I can do to make sure that I get to retain my clients. I know I can get new ones each year, but I truly buy into the adage that it’s cheaper to keep your clients from project to project. What can I put in my arsenal to keep my clients longer?”
As I share in the episode, it is historically much cheaper to retain your clients. To take this thought further, 80% of a company’s revenue will come from just 20% of their existing clients. The website I reference earlier also shared that the probability of selling to an existing customer is 60-70%; the probability of selling to a new prospect is 5-20%*.
I’ve kept my clients for years at a time and even when they stop working with me, I have a high percentage come back when they need help in my area of expertise again, even though it costs more than they paid previously. I’m clear it’s for very distinct reasons. Part of the reason, I teach my clients to create a problem progression plan is so that they have a reason to keep working with their clients. If you solve one problem at a time, you will create a reason for your clients to keep working with you to continue to have you help them create solutions. At the end of the day, to build clients for life, I recommend that you have the following in your “arsenal.” And, keep in mind satisfaction isn’t based on your products and services; they are based on those intangibles that mean everything to consumers.
1. A clear and concise plan for solving their problems one at a time. Don’t try to do too much because then you will overwhelm and not satisfy your clients’ needs.
2. A proven track record of success with raving success stories. When your track record is sound, and more importantly you help your clients get results, they will refer others to you. I have one client who sends me no less than 5 referrals each month because of how I’ve helped her to grow her business.
3. Beyond expectation service – you have to be stellar and consistently deliver more than they expected or paid for. You have to give more than what they wanted. You have to meet their needs before they even realize they have that need. Yes, you have to be that good at what you do and especially in anticipating your clients’ needs. Your bedside manner needs to be loving, conscious and focused on creating an experience for your clients so that they are supported, get results and feel appreciated at all times. When you have a commitment to your customers you’ll keep them happy. This may go without saying but you have to be more focused on your clients than on getting more revenue. Remember that when you help people get what they want, you’ll get what you want.
4. Top of Mind Awareness. This is why a marketing system is so important so that even when you can’t add a new client you still have to be marketing so that when space opens up, you are seen as a probable solution. This needs to include consistent communication and check ins – via handwritten notes, emails, phone calls, social media and your e-zine.
Now I want to hear from you, what’s your two cents?:
Have you retained clients for more than 3 years through price increases? What is the reason they continue to work with you? What can you share with Tina and others in the community to help them do the same?
©2014 by Darnyelle A. Jervey. All Rights Reserved. Darnyelle A. Jervey, MBA, The Incredible Factor Speaker, Business Coach and Marketing Mentor, is the founder of Incredible One Enterprises.com, Incredible Factor University® and the Leverage Your Incredible Factor System®, a proven step-by-step program for more clients, more income and more leverage in your business. For more information and a FREE audio CD “7 Critical Mistakes Entrepreneurs Must Avoid When Unleashing Your Incredible Factor So You Attract More Clients, Make More Money and Gain More Leverage” just fill out the form below.