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The ROI is Always in the Relationship!

Tag Archives: retention


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Complacency- The ROI Killer

 

You may have heard the statistics before but they’re worth mentioning again.  When a client stops working with an organization there are a few factors involved, perhaps a geographic move, a death or they no longer have a need for the service.  However a staggering 68% of customers will leave an organization to go work with, or purchase from, another company because of perceived indifference on the vendor’s part! Even if the original company provided an excellent service at the time, great product and pricing the client will leave if they feel the supplier is unappreciative of their patronage. That’s a compelling reason to stay in constant contact with your clients!

Here are 6 easy ways to stay connected with your clients…

1. Handwritten note – send clients a personal note thanking them for their past business.  Remind them that you’re there as a resource to provide new ideas or answer any questions they have about trends in your market.

2. Personal call – phone your clients, check in and make sure that they know you’re available to them.  Let them know you want to make sure you’re being proactive about their account.  This is not a sales call, this is a call conduct a temperature check on the service you’re providing and thank them for their business.

3. Stop by – if you’re in the area, stop by your client’s office.  Drop off a promotional piece discreetly branded with your company name and information.  Thank them once again for their loyalty to your organization and remind them that you’re there to help in any way you can. Your useful gift will serve as a goodwill piece as well as generate residual marketing exposure in your client’s workspace or home.

4. Network – connect existing clients to other clients that may have the potential for a strategic partnership.  Introduce your contacts to one another.  Remember, looking for ways to help your clients reach their goals is a surefire way to solidify your relationship and communicate that you care about them as a person in addition to the business they bring to your organization.

5. Unsolicited proposals – if you come across a special offer or important market update that will benefit your client, be sure to be proactive with proposals.  If you’re selling a product, have they purchased something in the past that is currently on special? Reach out and let them know you came across an offer that they may want to take advantage of.  If you’re in the service business, perhaps a mortgage broker and interests rates have lowered and your client can take advantage of some significant savings, be proactive and send an unsolicited offer.

6. Lunches –schedule a lunch with your clients.  Now is the time to listen to what’s happening in their world.  It’s not time to pitch a new idea or ask for a sale.  Lunches are a wonderful way to reconnect and hear about your client’s goals, dreams, aspirations and challenges.  Naturally you’ll discuss business matters but keep lunches light and focused on getting to know your client.  Thank them once again for the business and remind them that you’re always around if they have any questions or concerns about the company.

Remember, complacency is a silent killer! Many people who feel you’re indifferent to their business will simply leave and go elsewhere.  Be sure to take action with one or a combination of these strategies to further increase loyalty and ultimately the bottom-line.


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Lifetime Value of a Client

 

We’ve all heard the expression that it costs less to retain an existing client than it does to attract a new one.

Marketing efforts should be focused on your existing members, donors and clients. This means that your time and energy should be put towards building lasting relationships with the people who are currently loyal to your organization.

So often, businesses are focused on marketing to a cold prospect while ignoring the immense opportunities that lie in your existing database.  Let’s take a look at client value and I hope you’ll be able to agree with me that nurturing existing relationships will pay huge dividends in the long run. Your existing member spends $1000.00 annually for their membership.  Perhaps there’s some dissatisfaction that member has voiced they leave.  Will the association lose $1000.00 in revenue? We’ll no, not really, you’ve actually lost much more than that.  Does the average member belong to your association for 5 years, 10 years, perhaps event 20 years?  When that’s the case, we need to examine the lifetime value of the membership which means that an unhappy member reflects a loss upwards of $5000.00, $10,000.00 and $20,000.00!

Your donor who typically spends the same amount each year and choses to go with another charity will result in a similar loss.

For entrepreneurs, we often think “oh well that was only a $500.00 loss” but how many times would that client normally purchase from you?  Is it three times a year? Ten times a year? If it were ten times a year at $500.00 and the relationship has been severed and perhaps that client had a ten year potential that $500.00 would actually be more like $50,000.00 in lost revenue.

That’s a staggering number and that doesn’t even include the typical amount of business that client may have referred you over the years. So enough of the doom and gloom, I put those numbers there to illustrate the importance of relationship building in business and appreciating the lifetime value of the people we serve.

Spend your time and energy nurturing the relationships from your current client base.  Make sure that they know how much their patronage means to you.  Do small inexpensive things to remind your clients just how important they are.  Send a personally handwritten note, set up a quarterly meeting intended as a discovery session.  Check the temperature of their account.  Are they pleased with the service you’re providing, could you do anything to improve your service. This meeting is not a sales call, you’re letting your member/donor/client know that you don’t want to become complacent and value their business.

Proactively spend your marketing budgets and efforts on your existing relationships and think of each client’s lifetime value.  This will significantly impact your day-to-day dealings and the way in which you handle each transaction!