There are several reasons your existing clients are your business’ most valuable asset.
- Increased profits from sales
- Increased profits from reduced operating costs
- Increased profits from referrals
Not only is it 3-5 times cheaper to keep a client than to engage a new one, but studies show that repeat customers pay more for purchases and purchase more often. Satisfied clients also help your business to grow through referrals to friends and family.
To look at it another way, if your business is gaining 10% new clients annually, but losing 10% of existing clients annually, your company is not growing. Imagine if your company reduced your client defection rate by 5%; your business would be growing at a rate of 5% every year. Not only that but your sales and marketing expenditure would be reduced.
How do you take care of your most valuable asset, your clients? Here are 5 proven ways using tech tools to retain and satisfy clients, which will build strong, long-lasting client relationships and grow your profits.
Gather Client Feedback
Clients who have purchased from you can offer insight into overall client wants and needs. Often they can inform you of something about your product or business that you didn’t even realise.
This activity can also reveal whether you are targeting your product to the right prospects in the first place.
How do you feel about friends or family that you don’t see or hear from very often? It’s likely you don’t have a close connection with them and trust them a less than those you’re in regular communication with, right? You can say the same for businesses. A relationship cannot be established without regular communication.
Regular communication can take the form of a monthly e-news email, marketing of new products, social media posts, a blog, an annual client appreciation event, a personal meeting or even a phone call. Ensure to go beyond simply marketing your products; make your clients know how important they are to you.
Reward your Most Valuable Clients
The Paretto Principle states that roughly 20% of a company’s clients generate approximately 80% of revenue. Perry Marshall takes this principal a step further and claims that the top 4% of a firm’s clients generate 64% of the revenue. Using your CRM produce a sales report and find out who your top clients are.
These are the clients you want to hang on to, so be sure to give them the treatment they deserve. This might mean customising the service given to them; giving them a discount on their repeat business; taking them to a lunch or entertainment; sending them a gift at Christmas; or all of the above.
Create a Referral Program
Why not encourage your clients to spread positive word-of-mouth by rewarding them for referring friends and family. For example you may like to offer both your existing client and their friend 10% off to encourage new business but also give back to your clients who are recommending your firm to others. The client’s referral can be tracked using a unique discount code, so you know who to thank, and can be distributed through an email from your CRM for easy forwarding.
Target the right clients, and don’t forget to cross-sell
Who is your target market? Do your existing clients match up to this segment? Take the client data in your CRM and create a handful of client profiles. You can then use these profiles to target new business, but also market to your existing clients.
While nobody wants to be badgered with sales and marketing phone calls and emails, when targeted correctly clients can be grateful to learn of a product that actually meets their needs. The goal is to build long-term, trusting relationships with your clients. This goal should always be applied, even when cross-selling to existing clients.