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April 10, 2009

Client Retention

Client Retention and Change Management

In a tough or normal economic situation, business owners and executives all too often forget about their current clients. Given the high costs of new sales, all members of an organization should focus their efforts on retaining the current client base.

When was the last time you reviewed your client base and asked how did the original sale occur? Was it relationship based? Need based? Did the client have a choice? How often do your customers repeat or increase their sales? How many clients have not been repeat customers?

If the answer to the last two questions is “not many or zero” it is time to improve your company’s policies and procedures. A sale does NOT end after the client makes a purchase.  Everyone in the company is in the client satisfaction business. Controllable reasons client leave and do business elsewhere:

·         No sales contact after the initial sale

·         Problems not resolved timely or satisfactorily

·         Sales and operations do not communicate effectively and as a result the client’s expectations are not met and are left with a negative perception.

·         You are no longer aware of the clients needs – they shop around

·         The client has no idea what other services you offer – they shop around

·         The relationship has dissolved due to lack of contact or employee turnover

·         Lack of cross selling making it easy for the client to leave on price

·         You have not exceeded the clients expectations

Where does the problem start – AT THE TOP. Client retention must be an organizational mandate. It starts with the Executive Officers and if your company suffers from poor client retention – the top is where you correct the situation.

If you are a business owner, top executive, change management agent or simply cannot figure out why you continue to lose customers, then these are a few things you can do:

·        Get rid of the “sales creates problem and operations fixes mentality”. Get them on the same page. Reward your sales people for profitability and customer retention, reward you operations people with sales goals and customer retention.

·       Create teams that will work together. Assign personnel to personally visit all clients if possible or in the least maintain regular contact with the client.

·         Make sure you are sending updated product information out.

·         Ask your employees!!!! They have a great ideas and involving them will help reduce your employee turnover. Visiting clients with a top executive is a great way to bond with employees and find out what is really going on in your company.

·         Make everyone accountable.

·         Get everyone involved with the sales process and everyone involved with client retention. A great way to do this is to map out your workflow so everyone understands the business process.

If you need assistance in managing or improving your client base, contact The Entrepreneur’s Advisor™, your one-stop resource for Entrepreneurs and Business Owners. We will EXCEED your expectations.

The Entrepreneur’s Advisor™

One Comment on “Client Retention

Alastair Digby
May 29, 2009 at 4:44 am

When times are tough, it is more important than ever that businesses provide the best possible service to their customers to ensure they don’t lose them to competitors. Research has shown that 80% of companies believe they provide a superior client experience but only 8% of their clients agree.

Finding out how our customers feel about us means that not only can we adapt and improve our service and therefore our retention rate, it can also give us the chance to up-sell or cross-sell to a market that already knows and trusts us.

At Nido we have seen a growing number of companies approaching us to help discover their clients’ perceptions of their service and delivery levels. Finding out weak spots, areas for improvement or what clients really value about them can all help to reduce attrition or defection to competitors.

Similarly finding out what their competitors are doing to try and take their market share is invaluable insight that allows them to take corrective action. If competitors are pushing special offers, reduced rates and other incentives it can be tempting to simply reduce prices but this is a very short-term solution.

There will always be some customers for whom price is the only consideration but for the majority, customer service is the overriding factor that determines who they buy from. Fine tune your proposition placing emphasis on the need to focus on clients and deliver excellent service and concentrate on how any improvement in cost efficiencies will benefit your clients, not just your business.

Improving after-sales service and maintaining close client contact is a tool that all companies can utilise to ensure a long term and profitable relationship with their clients, rather than treating them as a single sale opportunity. Now is the perfect time to think about what else you can do to keep your clients on board for years to come.

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