31 May 7 Client Retention Strategies to Drive Growth
One of the greatest challenges that agencies and other service providers face is client churn. Indeed, not only does retaining a client better serve recurring billables, but the process of scouting, pitching, and onboarding clients is a costly one, so having to do on an ongoing basis means smaller margins and can make the difference between profitability and just breaking even.
For these reasons, investing in client retention is a business strategy that not only increases recurring billables, but reduces costs. Along those lines, here are 7 actionable strategies for increasing client retention, and securing more profitable revenue projections.
1. Choose the RIGHT Clients
Every agency and service provider has a target market — i.e. potential customers who can benefit from their services. However, choosing the right kind of clients is about more than just finding someone who can benefit from your services and pay their invoices on time. It’s also about choosing clients that will work well with your business and its service offering, appreciate its value proposition, and not generate costly points of friction. And selecting the right kinds of clients for your business comes down to two fundamentals.
First, there is the culture fit. Every “culture” has its own processes (i.e. way of doing things) and meta-language (i.e. way of communicating). When two businesses have drastically different ways of doing things and/or communicating, more points of friction are likely to arise, straining the relationship, and making it more costly and difficult for the the service to maintain the relationship. So learning to qualify leads for a cultural fit is the first step in implementing a strong client retention strategy.
d, there is the industry fit. In many ways, many industries have their own culture. And as you work with clients in a specific industry, you gain knowledge of their culture and become fluent in it, or even assimilate to it. For this reason, it’s important for your agency or firm to understand what industries it is most competent in, and focus on those industries (or similar ones), rather than trying to branch out to the extent of onboarding any client from any industry just because you think you can close them.
For example, if your agency is strongest with spas and salons, onboarding a single muffler repair shop may not be the best fit as a client because there’ll be more ‘cultural friction’, your team will have to spend extra bandwidth learning their ‘language and customs’, and the relationship is likely to be less successful.
2. Understand THEIR Business Goals
Just as your business is stronger with certain kinds of clients from certain kinds of industries, it also understands the business goals of those clients better. So whether you’re focusing on clients from an industry you know, or taking on clients in new territory, understanding the client’s overarching business goals will help you not only better serve them (and meet those goals), but also maintain the relationship over time, as well.
It’s not enough, however, for senior staff to understand clients’ business goals when they’re setting sales targets and strategies. It’s also important that that understanding trickles down the sales and account management teams. After all, these team members are going to be the most frequent touch points for your clients (from first point of sales contact to routine interactions), and if they don’t truly understand the essence of your clients’ business goals, expectation will either not be properly set, and/or not delivered on, and that is likely strain the relationship to the point where it will come apart.
3. Set CLIENT Expectations
Everytime we enter a relationship, it’s because we’re expecting something from it. It could be as simple as knowing that our lawn will be mowed every Wednesday while we’re at the office, it could be as absolute that this person will become a life partner and support us through thick and thin, or it could be as complex as another company and its team will completely manage or oversee some crucial aspect of our business.
Of course, expectations are tricky things, and if they’re not clearly laid out at the outset, each party is likely develop their own in a vacuum, leading to frequent misunderstandings, friction, and ultimately a sense that commitments have not been kept.
This is why it’s imperative that you set and maintain client expectations throughout every step of the funnel, from sales, to onboarding, through to regular interactions. For instance, it’s all too common for sales to set certain expectations (to close the deal), the contract to have different terms (albeit explicitly laid), and then for account managers to follow established processes all their own. This can lead to diverging expectations on both ends of the relationship, and ultimately lead to the kind of friction that causes the client to walk.
Making sure, then, that the client is clear on what they’re paying for, and that those expectations are consistently met through every step of the process is a significant part of maintaining and growing the relationship.
4. Prove Value Through REGULAR Reporting
Once you’ve set your clients’ expectations, it’s important to demonstrate that you’re meeting them — on a consistent, ongoing basis. And that’s where regular reporting comes in.
Consistently reporting on your performance (something the Agendize platform helps digital agencies do) is essential in demonstrating your value to the client and solidifying your relationship with them. It shows that your clients are getting what they paid for, and that you’re delivering on your commitments to them. It also shows that you’re invested in their business goals (see point #2 above), and that’ you’re a value-added partner that is worth re-investing in, in turn, month after month.
5. Keep Clients in YOUR Loop
There’s more to maintaining a relationship than just bringing something to the table. It’s also something you have to participate in.
A big part of maintaining any relationship is staying connected, of keeping people in the loop of your what you’re doing day-to-day, and client relationships are no exception.
And an effective way to do this with your clients is through monthly or biweekly newsletter that (1) provide them with added-value/advice, and (2) demonstrate what your agency is doing to continually help clients (i.e. the reader) succeed. These can cover any number of topics, from month to month, from software updates, to new documentation, to added-value content like blog posts of white papers.
The point is that by keeping your clients in the loop of what your business is up to, you’re connecting with them, and reminding them that you’re extended part of their family, too. And when you do that, your relationship with them grows stronger with time.
6. SCHEDULE Regular Follow-Ups
Just as your reporting and newsletters should be regularly scheduled, so should your touchpoints with clients. In other words, it’s not enough to send them monthly numbers or humblebrags. You also have to interact with them on a consistent basis.
Doing so demonstrates that you’re still interested, that you still understand their business goals, and that you’re still part of the process that’s helping to drive their business. It’s also a great opportunity to discuss any reporting trends or learn about some of the new challenges they’re business faces as it evolves, and identify new ways in which the two of you can work together and grow your relationship.
7. EDUCATE Clients (don’t just sell them)
A significant part of maintaining client relationships is by helping them better understand some part of their business, and an effective way in which you can do that is by educating them (instead of just exploiting them for profit). Of course, your regularly scheduled reports, email newsletters, and touchpoints will help contribute toward that, but it’s also important to make sure you work an educational ethos into every interaction you have with them.
For example, if they’re an SEO client, don’t just tell them what to do, but explain why, and keep them abreast of any major search algorithm updates. Similarly, if they’re a client using a white labeled version of Agendize, you’ll want to introduce them to any newly released software features available, and take the time to communicate the value and the function of those features.
The point, here, is that you don’t want to mystify what you do. You want to de-mystify it. Because when you help a client better understand what’s going on, you empower them. And when you empower them, they’re more likely to trust you, rely on you, and value their relationship with you more.
It’s Not Only What You Know, It’s Also WHO You Know
Whether they’re business or personal, relationships are complicated things. Whether or not they endure depends on a few factors, from what we get out of them, what we bring to the table, and what we put into them.
When it comes to retaining clients, then, it’s about a lot more than just delivering on what they client is paying for. It’s also about making sure they know what that is, understand the value, and they feel like your business is helping generate that value for them.