Speaking of Retention - Do You Have a Strategy to Keep Clients?
Why retaining customers is super valuable.
Retention is the new Black.
If you don't have a strategy/system for retention, you're not only leaving money on the table you're also giving it away...to your competitor.
While acquiring new customers is crucial for growth, keeping existing clients is where the real value lies. Retention strategies nurture long-term relationships and help you earn more with less effort.
The Cost of Acquisition 5x
Did you know that acquiring a new customer can be five times more expensive than retaining an existing one? When I started it was 4x now it's one more x!
Maintaining a relationship with a current client requires far less investment, offering a much higher return on investment(ROI). An easy way to do this is to check in with your clients. A personal note, text or phone call is a fantastic way to reconnect.
By focusing on retention, businesses can allocate resources more efficiently and sustainably.
Why Keeping Clients Is Cheaper
Spend more Stay Longer
Not only is customer retention more cost-effective, but it also leads to increased profitability. Existing customers are 50% more likely to try new products and spend 31% more compared to new customers.
Did you know that customers who have been with a company for three or more years spend 67% more than new customers?
Loyal clients are also willing to spend more on value-added services and upgrades. This makes retention not only crucial for maintaining revenue but also for increasing it.
Building Loyalty through Trust
One of the key components of retaining clients is building trust and loyalty. Customers are more likely to stay with a company they trust and believe in.
This can be achieved through consistent communication, delivering quality products/services, and providing exceptional customer service.
Building this trust takes time and effort, but the payoff is worth it. Loyal customers become brand ambassadors, recommending your business to others and
This loyalty can lead to repeat business and can even make existing customers advocates for your brand, further driving new client acquisition through word-of-mouth referrals.
Learn from Why Customers Leave
Understanding why customers leave helps with improving retention rates. I have had clients who were leaving because they didn't connect with one of our staff.
However, after listening to them about it, offering them an alternative (another person to work with) and solving their problem clients have stayed between 2 months to 2 years longer.
The math says it all.
Exit surveys and feedback forms can provide valuable insights into areas that need attention.
Once you know the reasons behind customer churn, you can adjust your strategies accordingly.
Maybe their needs have changed, or perhaps they found a competitor offering better value. Addressing these issues can pave the way for improvements in your service or product offerings.
Case Study Time
Take Jasper.ai, for instance.
Sign up for a 7-day trial. For me, it was too short. So I went to cancel it. Never used it in the 7 days.
This is where they thought things through:
Your first attempt to cancel they initially offered a 14-day extension. It wasn't enough for me. I wouldn't get to use it more often. For me, it was just a wee bit better than the 7-day trial. (For others it might be enough)
HOWEVER (!) when you click through the cancellation steps you're offered another extension to 30 days. Now, I could see the value. I could see completed projects. In fact, by reframing the trial to 30 days my concept of the price was changed. in one month I could do a lot. In another even more
By extending the trial period to 30 days, Jasper.ai provided prospective customers (me!) with ample time to experience the value of their service, leading to increased conversions and retention.
Hey, Here's a Second Case Study
Footprints Music
Music lessons (in fact any service that follows the local school year) decline in the summer (and the spring in some areas) making retention difficult.
Once a parent gets into the summer it's easy to fall off the consistency of weekly lessons
How to retain students: Discount with extended service (similar to Jasper.ai)
Offering a discounted rate to parents or students taking a break for the summer maintained my retention rate by as much as 70%. Using techniques (Scarcity, and FOMO) frames the value of preregistering.
Locking in their spot offered 2 excellent benefits:
1) helps your business through the lean months
2) retains clients to stay longer.
Used with other marketing (referral, events etc etc) this is an excellent way to retain students and grow.
Welcome Back
Using email, texting, events and yes, calling, saying Welcome Back never sounded sweeter.
Never underestimate the power of a well-timed outreach to past customers. Life circumstances change, and someone who left your service may be better positioned to return.
Regular communication, exclusive offers, or personalized reconnect campaigns can reignite interest and bring back previous clients.
Conclusion
Retention is more than just a cost-saving strategy; it's a pathway to sustainable growth and a loyal customer base. By focusing on understanding why clients leave and engaging them effectively, businesses can create a win-win situation for both parties.
If you're looking to craft a comprehensive retention strategy tailored to your business needs, feel free to DM me. Let's work together to keep your clients engaged and satisfied.