How much of the business advice you get is about how to bring new clients in the door?
It’s a worthy goal to grow your customer base, but many people — even seasoned business owners — overlook the value of holding onto the clients you already have.
The people who have reached into their pockets and handed you their hard-earned money before are the most likely to do so in the future. On average, 65% of new business comes from existing customers.
Despite the variation in customer lifecycles based on your industry and the nature of the services you provide, it’s a smart idea to focus on retention for the long haul. Bain & Company research shows that increasing your customer retention by just 5% can lead to a 25–95% jump in profits.
If you’re eager to start seeing returns like this, it’s time to think about:
Customers who sign up for your services over and over again produce a stream of recurring revenue that can insulate your business from the potential negative outcomes of various changes. Whether you’re enduring internal shifts or trying to weather a down economy, the clients who have seen firsthand the value of what your team does will not have a problem paying. Getting as many clients as possible to transition to recurring contracts is an ideal way to mitigate future risk.
Loyal customers are also a reliable source of word-of-mouth marketing. There’s nothing quite so powerful for your business than to have brand evangelists spreading the word about the results they’ve experienced with your guidance. The more opportunities you have to provide these happy customers with a platform, the better.
When you can bank on customer loyalty, you’ll have to worry less about your churn rate. Of course, there will always be customer issues, but those are probably not going to come from the people you’ve served the longest. As you complete more projects for the same client, you build up a history of positive interactions that go a long way in making them more willing to work through any difficulties that arise.
As customer acquisition gets more difficult in a world competing for digital attention, having a clientele that knows and loves what your business is about is priceless.
A customer retention rate represents the number of paying customers who have stayed active after a given period of time.
Customer retention rates vary across industries. Because client relationships are at the heart of professional services, the percentage of customers who stay loyal tends to be higher than the average for other industries.
According to Statista, the average customer retention rate in professional services is 84%. This high rate is not to be taken for granted, though. Establishing strong connections with your clients takes work, and holding onto them over time requires dedication and a clear strategy.
In the upcoming sections, we’ll explore ways to get to know your current customers and offer consistent value that inspires them to keep coming back.
The first step in boosting customer retention rate is to truly grasp the ins and outs of what your customers experience when they interact with your business. Knowing what they need can help you deliver more of that and feel confident that it will be well-received.
When researching existing clients, it’s best to use both qualitative and quantitative barometers. Go with qualitative first, and use your most accessible resources: your internal client experts. Whether those are account managers, support techs or customer success specialists, they’re the people who interact with your existing clients most often. Thus, they should’ve already gathered valuable insights from the natural conversations they have every day.
Next, go directly to the source: your clients themselves. A survey or focus group often works well. Make a list of essential questions tailored to your business and leave the answers open-ended. Here are some core questions to inspire you:
You don’t have to have a stellar participation rate for surveys like these to be helpful. They can give you immediate clues on how to prioritize client requests. Then, reaching out to one or two respondents to request deeper conversations can provide clarity on each question.
For quantitative answers, it’s easiest to pinpoint the key metrics — in addition to customer retention rate — that tell you the most about customer behavior. While these will also vary based on your industry and service range, here are a few that apply to many businesses:
PRO TIP: Your CLTV should ideally be higher than your customer acquisition cost (CAC), or how much you pay to acquire a single new customer, by at least a factor of 3. This ensures that the investment you make in acquiring new customers will pay off.
These qualitative and quantitative insights can energize your team to set ambitious goals and continue building strong connections based on customer expectations and behavior.
There’s a fine line between not talking to clients enough and overwhelming them with unnecessary communication. You should be reaching out to your clients regularly, but the method with which you choose to do so matters. Too many phone calls or emails can be disruptive, and requiring that they log in to multiple accounts to review or approve work could also be too much.
The right mix will likely be some combination of automated email campaigns and a convenient client portal. Let’s discuss how each medium can contribute to more effective client communication.
Email is still one of the best ways to reach people, especially if your client base consists of business professionals. There are many creative ways to use email to stay top of mind with your existing clients. The body of a client outreach email doesn’t have to be complex or take a lot of time to write. In fact, sometimes a short check-in can go a long way in making people feel like you haven’t forgotten about them. As long as you’re careful about your tone and ensure that clients aren’t receiving sales-y emails too often, you can keep this mode of communication at the forefront of a client retention strategy.
A client portal is a hands-off way to give your clients visibility over the work your team is doing, as well as some control over how frequently they check on the progress of their projects. Many professional services clients don’t just appreciate this kind of transparency — they expect it. The best client portals offer interactive document review, secure file storage, customizable permissions and a way to submit requests. Moreover, having a client portal attached to your work management platform, rather than as a standalone tool, can save your team loads of time.
Implementing one or both of the above as a regular method of communication shouldn’t be an afterthought, as these will be at the core of your connections with clients from the moment they sign their first contract to the multiple moments when they pay their ongoing invoices, hopefully many billing periods into the future.
Automating client communication is easy with Accelo — a work management platform built for service businesses. Start your free trial or book a demo and get ready to up your client retention without the risk of lowering team productivity.
Many product-based businesses improve retention with a customer loyalty program. For retail and online shopping, these can work well, especially when they involve gamification. But apps and punchcards aren’t quite as applicable to a service business.
Instead, a strategy to maximize customer retention should revolve around interactions — both quality and frequency.
Below are the six core areas of customer relationships and the top factors in each that can directly impact retention:
Your strategy may involve additional factors but however you choose to approach client retention, it should be structured and communicated internally. As your team grows and adjusts to external factors, it’s important that they understand that your existing clients are just as important to the business’s success as prospects.
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4 Smart Moves That Make Clients Want to Stay
As you know, there’s no such thing as a quick win in professional services. However, there are meaningful gestures that can send a powerful message to your clients.
Why take our advice? Accelo’s clients are loyal! Read why one structural engineering firm has used our platform to manage its client work for nine years.
It may be overwhelming to think about everything that’s required to keep your customer base from shrinking, but there’s good news. A tech platform can act as your client retention partner. And we’re not talking about just a customer relationship management solution.
With an end-to-end client work management platform like Accelo, you’ll be able to easily satisfy all elements of the client relationship mentioned above:
These functions only scratch the surface of what Accelo can do. With a powerful platform that can be customized for your specific workflows, your team can focus on deepening customer relationships and increasing your retention rate.