7 Ways to Boost Client Retention and Prepare for Inflation
With inflation up, customers are looking to trim expenses. Here's how to make sure your contract survives.
By Jeff Antaya •
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Now is the time to brace your business for inflation. Costs are rising, and the Federal Reserve is tightening the faucet of easy money that has fueled growth since the onset of the pandemic. Your clients will be looking to trim spending and cut waste. How do they view your contract?
This is the key moment to make sure clients are happy with your work. Let there be no doubt: Competitors soon will be whispering in their ears. How your clients consider a competitor's pitch is up to you.
One wise way to prepare for the coming economic slowdown is to reallocate some sales and marketing dollars to client entrenchment. Studies have consistently found that it's much more cost-efficient to retain existing clients than to hunt down and sign up new ones. Securing a new customer can cost tens of thousands of dollars. The success rate of selling to an existing customer is 60-70%, compared to 5-20% for a new customer.
Related: How to Retain Clients Longer
Despite this, the culture of recognition and rewards remains firmly slanted toward winning new clients. Keeping existing clients is often taken for granted. But the winners from the coming slowdown will be just as skilled in managing and pleasing their current customers as they are at generating new business.
Here are seven ways to be ready for the coming downturn.
1. Understand how clients view you
Are all of the key client leaders subscribed to your thought leadership? Are you just another provider to your clients, or are you reaching them in ways that provide value and genuine insights? Now is the time to research the habits of your best clients and address any gaps. If a client isn't listening to your unique voice, he or she is more likely to be open to a competitor's advances.
2. Invest in client service
You need regular face-to-face meetings with clients. Emails leave too much unsaid; conversation is key to learning what's on a customer's mind. At least once a year, customers should be getting a visit from a client-service officer who is detached from the day-to-day running of the relationship.
3. Map out a customer-service strategy
Banish the "catch-as-catch-can" approach. Instead, put together a detailed customer plan to guarantee they know you and your capabilities. Some portion of this plan may include non-billable hours, but that investment will always be cheaper than the cost of replacing that customer with someone else.
4. Document the value you provide
Don't just assume that your best clients know what they're getting from the relationship. Formalize it with a regular report or document that sets out what the client asked for and what you delivered.
5. Survey your clients
It's important to get consistent, honest feedback from clients. Anonymous surveys are the most effective way to canvas a broad range of forthright comments, as opposed to face-to-face meetings where people might not tell the unvarnished truth. Statistics say that for every person who voices a complaint, there are 26 others who are unhappy but remaining silent. Anonymous surveys allow quiet critics to say what's on their minds.
6. Provide perks
Just as airlines boost customer loyalty through mileage programs and V.I.P. lounge access, you can provide perks to key clients that make them feel special. A great way of doing this is through a dedicated portal that gives them access to premium content. Alternatives are providing free subscriptions to relevant publications or giving top clients 20 free consulting hours focused on the problem of their choosing.
7. Commit more resources to current clients
Adopting these strategies requires a financial and cultural shift to place more value on existing customers. Shift 10% to 20% of your marketing budget to focus on current clients. Realign sales-compensation structures give more weight to retaining clients.
Related: How to Increase Client Retention Through Transparency
In any client relationship, a small proportion of people is likely to either love or hate the service you provide. The people who matter are the majority in the middle. The actions outlined here help ensure that every interaction with a client moves him or her up the satisfaction continuum, making your business steadily more valued — and ready to withstand an economic downturn.
