Each business strives to acquire as many clients as possible. But only the best companies succeed in keeping customer retention at incredibly high levels.
More clients equals more sales equals more revenue. But just like in sports, where it is easier to win a title than to defend it, it is easier to land a deal with a new client that to retain customers in business.
However, this is precisely why retaining customers should be one of your primary goals. When a client stays loyal, you will have a regular flow of income from them. But this is easier said than done.
For you, the difference between retaining clients and losing them can be one of the most important factors for the survival of your agency. When an old client returns for more business, you save a lot of time and energy you would have to spend on writing a proposal, pitching or onboarding new clients.
That is why you need to learn the essential client retention tactics that will help your agency thrive. But before we list them, let’s answer one basic question: What does customer retention mean in the first place?
What is Customer Retention?
In a nutshell, customer or client retention includes all the activities and actions that companies and organizations take in order to retain as many customers as they can. They do it through customer loyalty strategies and brand loyalty initiatives.
The benefits of effective customer retention include:
On average, customer retention costs up to seven times less than customer acquisition.
When you are marketing to customers who have already expressed an interest in your products or services and established a relationship with you, you are much more likely to land a deal.
Building a reputation
When you have clients who come back for doing more business with you, it means they are satisfied with your previous work and they will most probably recommend you to other companies.
Assuming that these reasons are enough for you to realize why you need to focus on creating a sound customer retention plan (and they should be), we are moving on to the list of the most effective client retention strategies for your agency.
Choose your clients wisely
If you want to improve customer retention, you need to think about it as early as possible ‒ even in the initial phase of your relationship with them.
It all begins with choosing the right clients. This means that you need to be a good communicator and notice what type of person they are. It is much better to turn down your potential client than have to look for ways to get rid of them later on.
Graphic designers know this best – people usually don’t know what they want, and they will blame you for not being able to read their mind. Avoid this type of clients as they will drain a lot of your time and energy, making you sweat and regret the day you started working with them.
Luckily, you can prevent this early on by not accepting such clients. One of the best ways to filter your clients even before you land a deal is to effectively build your target account list. When you choose your potential clients, you can research all details about them before even contacting them, which can help you a great deal to increase client retention in the long run.
Another thing you could do is evaluate the past canceled clients and look for the traits they have in common. This will show you what traits to avoid in your future clients and indicate when it is better to pass an opportunity rather than seize it.
Saying no to new clients can be a difficult thing to do, especially if you are a relatively new agency. But if you stick to this customer retention strategy, you will be much better off in the long run.
Understand your client
Just like your agency has its goals, each of your clients will have their own set of objectives they want to accomplish. Understanding your client’s business and goals can make or break your ongoing relationship with them.
There is one little secret we want you to know – first and foremost, clients are people. They want to see you taking care of their needs and understanding their desires. That is why it is essential to know your clients’ services and products like the back of your hand.
Another thing you can do is get your team to sign up to the blogs and email newsletters which are relevant to your clients. Here are only a few benefits of doing this:
- gaining regular insights into your clients’ industries
- having a common language when negotiating with them
- having the ability to be proactive and propose a solution which only an expert in their niche would know of
Finally, you should leave nothing to chance and never allow yourself to guess anything (as we indicated in the introduction). Sometimes, in order to understand, the best thing to do is to ask questions.
Asking the following questions will help you get a clear picture of your client’s goals:
- What are your business objectives over the next X years?
- What are your best-selling services or products and why?
- Who are your main competitors and what do you have that they don’t?
- What is your marketing plan for the next year?
Prepare these and similar questions ahead of your first kickoff meeting with your client and when you see a smile on their face, you will know you have done your homework. Also, make sure you set realistic goals together with your client before you proceed to the next step.
Set expectations (and then exceed them)
When establishing a relationship with your client and negotiating with them, it is crucial that you let them know exactly what you can do for them. This way, there are no second-guesses or doubts about the final product.
This means that you should always tell your client if you can’t do what they are asking from you. It is much better to be honest about everything right from the start than pretend you can do something and then fail to deliver.
Also, make sure that they understand that you cannot guarantee for anything. Yes, you can work hard on the project and do your best to deliver, but there is simply no way that you can predict a specific outcome with great accuracy. Rather, set a range for the expected results and see if they agree.
But in order for your agency to perform well and satisfy expectations, everybody has to work in harmony. This means that you need to have a dream team around you that will always work toward your common goal – consumer retention.
Now, some would say that living up to expectations is enough but if you are an overachiever, you know this is simply not true. You should always go the extra mile and try to exceed your client’s expectations. This will set you apart from your competitors and make the client want to come back to you.
It’s always the same
I’m having a nervous breakdown
Drive me insane!
The famous lyrics by Led Zeppelin pretty much explain what happens when there is a lack of communication in a relationship, be it business or romance.
And indeed, if you ask any couple who has been married for decades about the key to their success, they will tell you that honest communication is what has mattered most in their long and successful relationship.
Well, why would your relationships with clients be any different? After all, love is much older than agencies and it can teach business people many things.
Clear and regular communication is one of the most important steps in the customer retention process, just like in romantic relationships. Don’t just communicate with your client when there is some progress or when something goes wrong.
Instead, you should communicate with them all the time, from writing a proposal to congratulating them on your five-year anniversary of successful cooperation. You can create a calendar (using Google Calendar or some agency related software tools) to remind you of keeping regular communication and plan a sequence of events like when to send emails, phone calls, handwritten notes, and so on.
Finally, asking your client for feedback on a regular basis will create a formidable level of trust between you and them. Just ask them what they think of your suggestion or solution and let them praise you or complain. After all, the best way to learn is from your own mistakes.
Always be personal
This one probably falls under communication, but it is so important that we had to list it as a separate step.
If you work with people, you have to know how to make them feel special. And to do this, you need to be authentic and personal. We already said that clients are humans before everything else. This means that when you build a connection with them as a person, you are on a good way to retain customer loyalty.
It is all about how you make them feel. Numbers come and go, but memories remain. Do something for your client that will make them remember you as a person, not just as a professional who did their job well.
This is an old psychological trick based on reciprocity. When you do something nice for someone, they will subconsciously feel the need to return the favor. In business, this boils down to wanting to work with you again without being able to put their finger on what exactly made them feel so.
Give it a try and you will see that this trick is really useful on your way to improving customer retention rate.
Never overcharge and always reward
Once you have established a long-term cooperation with a client, you may be tempted to charge them more than you should. When they tell you that they want to work on another project with you, you feel proud and special, so all the fame and fortune could easily go to your head.
One of the biggest mistakes you can do is to overcharge your existing clients. Instead of doing so, try focusing on the future and realizing that what you want is long-term and sustainable cooperation. If your client smells that you want to rob them of their money, they will walk away on you and never come back.
Finally, the last of the customer retention techniques is to always reward your long-term clients. Take some time to acknowledge each client who has been with your agency for a long time. Show them how much they mean to you both professionally and personally. Let them know that you wouldn’t get as far as you have if it hadn’t been for them.
Again, it is all about being personal – you can send them a gift, a handwritten note, a Thank You email or even record a video on Facebook Live with them or just tag them in it. Trust us, things like these are almost as important, maybe even equally important as a high-quality service.
(Image Source: Giphy)
As you can see, there are many different ways to increase retention of your clients. However, note that there are many more methods you can learn from your own experience and use them later on. These were only the best customer retention strategies that have worked for us and many other businesses each time they were tested.
Nonetheless, you should keep in mind that there are no shortcuts here. This is not programming or some other technical process. Here, it is all about people and personal relationships. When you see your client as a human being first and only then as a prospect, you will know that you are on the right track.
So, if you want to save money, time and energy that you would spend acquiring new clients, you need to learn how to improve customer retention and use these retention techniques as often as possible.
After all, think about a company whose client you have been for a long period of time and try to identify some of these consumer retention strategies in your relationship. Once you come up with a few of them, you will probably have that Eureka! moment and want to read this article again in order to learn all these tactics at once.
About the author:
Dave Schneider is the founder of LessChurn, churn reduction app. In 2012, he quit his job to travel the world and has visited over 65 countries. In his spare time, he writes about SaaS and business at DaveSchneider.me.