Client Appreciation is all about saying “thank you”. Thank you for shopping with us, thank you for using our services, thank you for inquiring about what we have to offer you. Thank you. And that is the end of it.
Client Retention is about developing new, innovative and profitable methods of keeping your existing clients. Client retention consists of inviting your existing clients to return and use your products or services and those existing clients potentially referring new clients to you.
How are they different?
Some would ask “What is the difference?” The primary difference between client retention and client appreciation is that by saying thank you, you are terminating the transaction.
With a client retention program you are inviting the client to return and purchase more of what you are selling. Statistics indicate that new customer acquisition can cost ten times more than retaining an existing client.
Retention drives revenue
Repeat customers are considerably less expensive and more profitable.
- 61% of SMB (small and medium business) revenue is from repeat customers
- 62% of SMB marketing focuses on retention
- 56% spend less than 25% on acquisition
- Acquisition costs ten times more than retention
- Repeat customers spend 67% more
As I was thinking about this blog and the different client retention programs that exist, I went directly to my purse and removed all the loyalty cards that I had accumulated in my wallet. I discovered that I have a lot of them! Many of these loyalty cards are an incentive for me to return to those stores because there is a bonus attached to returning.
What incentives are you providing to your existing clients?
Your type of business may not be structured to facilitate the use of a loyalty card. For example, a legal firm or an accounting firm, an interior design firm or most service – based companies typically do not provide this type of incentive.
How do these companies build client loyalty and client retention programs?
Many options exist for building a client retention program. Offering an incentive that may not be industry – related is an effective method for retaining your existing clients. One client, a legal firm, wanted to let their client know how much they appreciate their thoughtful referrals. We developed a program that sent each referral source a bottle of wine in a wooden box with the firm’s logo. These were so well received that clients started calling the firm to express their appreciation.
The primary goal of client retention is to keep your existing clients coming back and have them refer new business to you. A good place to start is to determine what your clients have in common, such as where do they gather and what do they enjoy doing outside of work. You also need to align your selection of activities to reflect who you are as a company. If confidentiality is an important part of your business, then you want to choose a client retention plan that will reflect this. At times we need to be very creative to find the right strategy.
For example, let’s look at a small to medium size accounting firm with both commercial and private clients. The accounting firm has a good solid client base with repeat business. What can the firm offer to existing clients as a client retention strategy that will also distinguish them from their competitors, respect the privacy of the clients and have their existing clients refer them?
Here is an idea – a rare red wine tasting event at a location where the clients may not have been, such as a funky art gallery or a museum or other innovative location such as a movie studio or in a catering kitchen that may include a food preparation demonstration. This type of event is innovative, would not compromise the privacy of clients and still give the accounting firm staff a chance to mingle and share the experience with them. This is what creates referrals. Voila…you now have an innovative client retention program!
For more ideas on client retention, please visit our website www.sommevents.com and don’t hesitate to contact us with your special requests.