The Best way to stay profitable: Customer Retention 101

Perhaps the best and most profitable thing you can do for your business is…KEEP YOUR CLIENTS!

Far too often, business owners spend tons of time and money prospecting for new clients (which IS important) while neglecting their existing ones. If you were to examine the rate at which you lose clients vs. the time and money spent on getting new ones, you would quickly realize that it is FAR cheaper to keep existing clients than secure new ones. While the stats change from time to time, it is estimated that it is roughly 7x cheaper to keep existing clients than to get new ones.


Simply put…TALK TO THEM.

Yep, it really is that simple. Making time to reach out to EACH of your clients on a regular basis is vital. Depending on your business and the size of it, this may mean a once a year checkup, or if your business is small and personal, then maybe even touching base every month is what is needed. Find out how they are doing, how their family is doing, make notes about things that are important to them and ask questions about things they truly care about. Develop a relationship that is NOT just about your business. Oftentimes, big problems can be wiped away when you are dealing with someone whom you know and knows you just a little bit as well.

Years ago, I ran a busy insurance office. We handled all the goodies including auto insurance, home insurance and even life and health insurance. Let’s face it, most of us despise insurance for one reason or another and one of the main reasons is it is something we pay for any in some cases, may NEVER use! As such, the premiums you pay can be maddening when rates increase along with everything else you have to afford just to live. My day was usually FILLED with people calling to complain about a rate increase, or to ask why they had to pay for a certain coverage. It wasn’t fun but as I got to know these clients over my years in working there, the conversations began to change. Rather than just an irate customer talking to a nameless insurance agent, our conversations became as much about each of US as they were about their insurance policies. Logic dictated that the rates weren’t controlled by ME, and the customers if given the chance easily came to that conclusion, but they wanted to be HEARD. Their frustrations were real and I felt them too. In speaking with clients as friends vs. just a business relationship, we could discuss a bit about life, why rates were what they were, maybe look at some alternative scenarios that may help them save money and all in all, have a conversation vs. just a gripe session. In fact, MANY times these clients would just as soon shop around for a cheaper rate than call to yell at an insurance agent, but when they knew I actually cared and MAY actually have solutions or at least provide insight, they were more likely to stick around instead of jumping ship to another company.

You can retain clients a number of ways and talking is just one. Here are a few ideas that can go a LONG way when it comes to retaining clients for years and years:

  • Schedule regular video conferences to go over the services they purchase from you
  • Invite local clients to your office for coffee
  • Sponsor a local kid’s sports team (one or more parents are your client)
  • Make note of client’s birthdays and ALWAYS send a personalized card or small gift
  • Send holiday cards or gifts when appropriate
  • Recognize client’s family members birthdays (this can go a LONG way if they have kids)
  • If they own a business themselves, look for ways to refer them business

These are just a few ideas to get you going and once your juices get flowing I am sure you can think of a handful more. Make client retention activities a priority RIGHT NOW…you will keep clients longer and your business will be more profitable as a result!