Retaining clients was something that Billy hardly ever thought of. He was so busy, just keeping up with prospects’ requests for quotes, whilst doing the jobs for those who had accepted last month’s and last week’s quotes, that he barely had time to scratch himself. Yet Billy knew somehow that there was an itch he was failing to scratch. In this case, the itch was the neglected former customer and the flea in his ear was me as his coach, reminding him that he had left a very tasty meal on the table, unexamined, ignored and beginning to fester. It seems to be a consistent issue that I come across when working with owners of small businesses – the issue of retaining clients or customers.
When I asked Billy how he goes about doing that, I got a blank expression and the baffled response, “What do you mean?”
Every business has its own unique set of challenges and opportunities but the topic of retaining your customers is a common component in the struggle for survival and success.
Essentially, if you want to grow your business, you either go and find and attract new customers, or you retain, service and up-sell the current ones. It’s amazing just how many small businesses, and especially the ‘tradies’ sector, focus their marketing efforts so strongly on ways of acquiring new clients that they forget the importance of retaining the old ones.
Either they take it for granted that the customer will call them if they want something or they just become so ‘busy’ keeping up with the day to day grind that they forget all about them. The reality is that most small businesses don’t have a system in place for how they will go about the basics of retaining clients, let alone any thought as to how they might be able to build on that relationship.
So here are some thoughts and tips on marketing, the importance of retaining clients and why it’s an important tool in your overall marketing strategy.
(1) Marketing Plan – most small businesses don’t have a written marketing plan that details the key ingredients of who their ideal customers are and where they will find them. That plan should also address the strategy for retaining clients.
(2) Ideal Customer Profile– really nutting out a description of your ideal customer is well worth the time and effort (often called a customer avatar), but figuring out what they think; what they need and where you can find them are great clues to enhance the effectiveness of your marketing efforts. If you’re going to spend money attracting new customers, you want to ensure a return on that investment. This is also a good time to mention that it’s ok to sometimes ‘fire your customers’ if they are causing you more bother than they are worth – you know those ones who are really difficult and annoying, that also happen to drain your energy for little return!
(3) A Clearly-defined USP or Unique Sales Proposition – this will help you ensure that your ideal customers want your solutions to their problems, rather than choosing to buy those products or services from your competition. Many small businesses and especially one-man bands are reluctant to blow their own trumpets – we’re often brought up with the concept that it’s wrong to brag about your achievements or abilities. Whilst that is generally accepted to be the case in social circles, you do need to explain your strengths and credibility to potential clients. There are right and wrong ways to go about this, but that will all be detailed in your marketing plan.
(4) Brand Statement – once you are clear about your market, i.e. knowing who your ideal customer is, where to find them and how they think; you will then focus on the message of how you will improve their lives by solving their problems. Your brand must be synonymous with your organisation’s ability and demonstrated track record in achieving this desired result for your customers. It will also spell out your USP to reinforce your market position.
(5) The Right Media – how you reach these customers and stir them into action to take up your offering will depend on you communicating with them effectively by using the right media for the job. This could include a variety of methods, such as advertising, promotional initiatives, online and digital marketing, leaflets, competitions, telephone canvassing or even the most effective and cost-effective one of all – word of mouth referrals.
(6) Relationships – People like to do business with real people, not machines and voice recordings or even overseas call centres. You can’t beat the human connection and that’s why your marketing story is so important in your overall marketing mix – stories are about real-life solutions for real-life people, with all the actual human emotions infused in the tale.
Networking is a popular marketing strategy among small business owners, but there are also many effective and ineffective ways of going about this method.
(7) So Where Does ‘Retaining Clients’ Fit In? – You’ve already done 90+% of the work contained in the previous six points. The most important relationship is with your existing customer because he or she already knows you, likes you (we hope!) and trusts you – assuming you did a good job for them already, but never assume – always ask, just to check.
You’ve done the ‘hard yards’ by investing time and effort and marketing money to attract these people before, so why not capitalise on that relationship – you’ve earned the right!
The simple truth is that if you can find a way to turn your customers into repeat customers and better still, ‘brand ambassadors’ who rave about you and introduce you to their friends, then you have made a far easier and more cost-effective marketing effort by retaining clients than by constantly seeking new ones.
I did include a disclaimer earlier that every business is unique, so in some cases the obvious attraction may be that the new customer represents the major and most lucrative purchase, whereas the repeat work may seem to represent a mere trickle income.
Here’s what I would have asked Billy had he been a real person instead of my fictional client for the purposes of this story, “What is the lifetime value of your customer?
In other words, if that customers sticks with you as a repeat customer, perhaps on some kind of servicing contract, how many years might they, on average, stay with you and how much per year might they spend? (on average). Multiply one by the other and you often have a staggering amount. That’s what you’d be losing if you choose to ignore them. Instead of you retaining clients, they end up going elsewhere. Work that figure out and you’ll see why I say it’s a ‘no-brainer’.
Look for ways of building customer loyalty by keeping in touch and reminding them of how much you appreciate them.
Billy, had he not been a fictional creation, would have taken my advice and earned himself a fortune. Would you rather be like Billy or would you prefer to be like Billy No-mates?
If I’ve got you thinking or even wondering about the effectiveness of your system for retaining clients, feel free to have a coffee with me and see how I can help you get the return on your marketing investment that you deserve.