Why customer retention is key to business growth and how to achieve it
As a business owner, you’ve probably noticed that the year follows a well-worn track. There are busy months, quieter spells and sometimes seasonal peaks and troughs. Traditionally, Quarter 3 is a busier time of year as people return from holidays and settle in for a long run until the end of the year…
If this sounds about right for your business, here are five steps you can take to get your business ready to maximise its performance during this important part of the year.
When we think about growing our businesses, we may automatically assume this means finding more clients. But the truth is, it’s often easier to upsell your services to existing clients, and it’s certainly cheaper than finding a new one!
So, how do we go about getting more business from our existing clients? Selling might not be an activity we enjoy but there are ways we can create the right environment for our clients to want us to provide them with more. Read on to find out how.
Let’s start with the facts, or at least the stats!
- Research shows it can cost five times more to acquire a new customer, than to retain an existing one
- The success rate of selling to an existing customer is between 60 and 70%, whereas successfully selling to a new client can be as low as 5-20%
- Loyal customers are five times as likely to repurchase and four times as likely to refer you to others
It’s safe to say there’s a lot of value in your existing client base. But what do we need to consider when it comes to retaining them?
The Client Relationship
The secret to retaining business is down to your ability to build strong, long-term relationships with your clients. The fact is, people buy people in the first place, but they stay because the service being provided makes their life easier, saves them time, or solves their pain point (or likely all three!)
So, having knocked their socks off with your amazing delivery, what comes next in creating the foundations of that long-term working relationship?
Showing up as your best self, repeatedly, is key to keeping your clients wanting more. People like to feel the safety and familiarity of routine and you can create this by having regular milestones, touch points, and always delighting them with whatever service you provide.
Your secret weapon in achieving this is, of course, getting some repeatable processes in place. My clients can capture this ‘best version’ of themselves within their CapsuleCRM. They build tracks, which are essentially a list of actions to follow when they are delivering their services. Even if they’re having a bad day, their customer is happy because they are experiencing their regular, high-quality delivery and caring interaction.
Which of your clients do you really like working with and why? Thinking about what works well in your business is a great way to generate opportunities with other clients. For example, are there add-ons that you provide for some clients that others might benefit from? Each client could be a candidate for all your services so it’s a good investment of your time to map what they are and aren’t receiving and see where the gaps are. I often refer to a ’product staircase’ which helps me visualise the next steps people need to take for us to continue adding value for them.
This ‘customer journey mapping’ is an invaluable exercise for every business owner. When we help our clients do this, we ask them to consider the goals or aspirations of each of their customers and work out how their services might help them to achieve these. By working out what you are delivering and to whom, you also identify gaps and can then use examples of what you are doing with Client A to appeal to Client B and show them the results they could be experiencing.
It goes without saying that you should never take your customers for granted. No matter how long you’ve worked with someone, or how well you think you know them or their business, there’s always a good reason to reach out and ask them how they are.
Find out what they think of the service you’re providing; whether they can suggest improvements; what their pain points are (these change over time too) and use this valuable data to inform the next steps you take with them.
Communication should start with a robust onboarding process (so you know who you are delivering for and why) and continue throughout your delivery and hopefully on into follow-on work. Again, a good CRM will help you keep track of this, and if a customer does lapse, you can still keep track of them as that ‘C’ stands for ‘contact’ not ‘client’!
Customer retention is always a good strategy from both a financial and reputational perspective and never more so when we know there are economic challenges on the horizon. If you’d like to find out more about how we help our clients to grow their businesses, get in touch with Julia on 01635 592020 or email Julia.firstname.lastname@example.org.