3 Pillars of Client Retention Every Brand Needs to Implement
Mobile photo- and video-editing app VSCO knows just how powerful the connection between engagement and retention can be. Though the app has been on the influencer marketing scene since it was founded in 2011, it's continuously evolved with the ever-changing space. In doing so, it has ensured the loyalty of long-time users while drawing in new crowds with newly announced services.
Recently, CEO and co-founder Joel Flory told Adweek he credits the brand’s rise to its passionate community. VSCO proves the importance of keeping clients engaged and happy. Yet according to Convero’s 2016 Customer Engagement Study, 58 percent of executives have no formal client engagement program, while 60 percent don’t know how many clients they’ve lost in the past year.
That's a big mistake when you consider how closely retention is tied to revenue generation. According to Harvard Business School, a retention rate increase of just 5 percent can potentially increase profits by 95 percent. Research from Invesp discovered that acquiring a new customer can cost up to five times more than retaining an old one.
Leaders of young companies spend so much time expanding that they may neglect to focus on their real revenue streams -- existing clients. By building better relationships with current clients, entrepreneurs can shore up their finances while positioning their brands for stronger growth.
Three pillars of strong customer retention.
The obvious way to retain customers is to deliver great work, but every company (hopefully) already strives to do that. A great product coupled with an awful customer experience rarely leads to repeat business.
Customer retention starts with relationships. Clients want to know their partners will get the job done on time, on budget and with their best interests in mind.
Related: Getting New Customers Is Hard!
Every client has different needs, but all clients want their experiences to be as stress-free as possible. They want to know the people they work with and have confidence in their vendor’s ability to guide them.
These three pillars are the foundation of every great client relationship. None can exist without the others, or the entire experience crumbles. Build these pillars to forge stronger partnerships, increase retention rates and boost revenue.
1. Draw the curtain away.
Trust and transparency go hand in hand. The moment a client thinks a partner is trying to hide something -- or push a more profitable, less cost-effective option -- the trust shatters.
When researchers at Harvard Business School created a restaurant where diners could see cooks (and vice versa) throughout the meal, customer satisfaction went up by 17 percent, while service speed increased 13 percent. More transparency in operations and decision-making translates to more trust and higher satisfaction.
Talk to clients like real people, not like sources of income. Remove ambiguity, which fosters distrust, in favor of straightforward, honest communications. Zappos, which is famous for its transparency, reveals information to its vendors that most other businesses keep confidential. This honesty leads to better vendor relationships and more honest conversations.
Start by establishing relationships with a simple kickoff call. Allow everyone to get to know one another, both within the scope of the project and within organizational roles, so clients never feel like they’re talking to a brand instead of a person.
Esteban Kolsky, founder and principal of thinkJar, spoke to HuffPost about customer experience. He mentioned that companies can prevent 67 percent of customer churn by solving issues during the first engagement. When customers know whom to call, the likelihood of quick resolutions skyrockets.
2. Provide context, and set expectations.
When proposing a solution to a client, deliver the information in a larger framework. Why this suggestion over another? What should the client expect by implementing things this way?
Bitly is one service that customers needed more context around before they could truly grasp its inherent value. Many assumed it was just a link shortener they could use occasionally. It wasn't until Bitly highlighted the information it gathered on individuals who clicked on those links -- their motivations, for example -- that users began to view it as a valuable marketing tool.
According to Bitly CEO Mark Josephson, "I saw the immense power of Bitly and realized that customers needed to rethink who we were and what we did. We refocused the entire company on helping marketers get the extensive value our product offered that they hadn’t realized to date, and it revolutionized our customer experience and value." As a result, the company earned more continual customer engagement for the long term.
Additionally, clients need to know what to expect so they can hit their objectives and deadlines accordingly. Represent the interests of both sides in plain terms, then outline explicitly how those needs intersect. Manage expectations at every stage to ensure clients never feel unclear about the status of the project or progress toward goals.
In his interview with HuffPost, Kolsky discussed the importance of overcommunicating. He mentions that 55 percent of clients will pay more for “guaranteed” good experiences, while 84 percent feel frustrated when they talk to someone who can’t answer their questions. By making every step explicit and outlining expectations in detail, partners can keep goals realistic and ensure clients feel satisfied with their relationships.
3. Don't just execute -- counsel.
Some partners are executors, while others are counselors. Executors are more concerned with providing the deliverable than building relationships -- important, but shortsighted. Executors often outsource as much as they can to keep costs down, which leads to frustrations and hold times when clients need answers no one can provide.
Counselors, on the other hand, ask challenging questions to understand pain points, objectives and promises. They take the extra time to discover opportunities and solutions their clients would not see without them. They offer guidance based on feedback. The better the partner understands the client’s unique challenges, the easier it becomes to frame communications in a positive light.
At NVE, we structure our divisions to make it easy for clients to find answers, keeping our experiential divisions all in-house to streamline communications and reduce our partners’ bottom lines. Our Brand Influence division acts as an agency within the agency, counseling clients on how to maximize impact through integrated content, culture, partnerships, analytics and insights. Those insights lead to individualized services that drive repeat sales and increase customer loyalty.
Listen to what clients think and how they view their own roles and challenges. They want their partnerships to deliver value just as much as the partners want to provide that value. As research from ANA discovered, both clients (87 percent) and agencies (86 percent) believe agency partners are important drivers of clients’ business strategies.
Customer retention is not a one-time goal. There's no finish line. Construct these pillars to create solid foundations of service upon which retention rates and revenue will grow naturally.