There’s an old expression for business called the 80/20 Rule. You’ve probably heard of it, and even if you haven’t, it’s a pretty simple idea:
80% of your business comes from 20% of your customers
While the numbers may be different for different services, the concept is pretty universal. Typically, you get a large percentage of your revenue from a small percentage of your clients. So it’s important to know who these customers are and work to keep them working with you.
Keeping quality clients is the staple for a healthy economic business model; In fact, BTI Consulting reports that law firms who track and measure client retention have a 12% higher profit per attorney than firms who don’t. Having a business model that focuses on retaining customers is a vital part of any successful business. In nearly every business, finding new clientele is more expensive than keeping current customers.
Here are 4 tips to creating a successful customer retention strategy.
1| CREATE A CUSTOMER FEEDBACK SURVEY
While nearly 83% of law firms surveyed by LexisNexis say they value customer feedback, only 48% actually have a system in place to gather it. Why such a large discrepancy? For a relatively easy function, there seems to be a lot of complacency.
There are a few ways to go about conducting surveys. You can include them in with billing statements, you can conduct them in-person, or you can email past and current clients. The point isn’t so much the medium as it is the message. Here are a few things to include in your surveys:
- Ask questions that ask whether your service met their expectations, your level of professionalism, your responsiveness, price, value, and etc. Questions should be clear and succinct. Avoid long-winded prompts and explanations.
- Use a scale system for some of the responses. A good scale range is from 1 to 5.
- The survey should not be longer than 20 questions, and preferably much shorter. Provide the estimated time it takes to complete the survey at the beginning and focus on key points. Longer surveys mean fewer responses.
- Have a policy to survey all clients. You can automate the process or schedule it by asking each employee to collect their clients’ responses by the 4th quarter, just make the time-frame clear.
- Give the option for the surveyor to submit anonymously if possible. Some clients may feel they can provide more constructive criticism with anonymity, and the idea is to get the most accurate description possible. If you have a client who is responsible for a large portion of your revenue, be sure and ask them directly for their feedback, in order to ensure they feel integral to your business.
While you can gain information and use it to better the process for your clients, surveys offer another benefit as well – they make the customer more satisfied.
While it may seem counter-intuitive that customers are happier after doing surveys, it really does help satisfaction. People respond more positively to experiences when asked directly about them. They also like to feel involved, and by contacting these individuals and asking about their experience, it instills trust in your firm.
2| MEASURE YOUR SURVEY RESPONSES
Your responses probably won’t be in inches
While the step seems obvious, it is important to create a system for it before conducting your surveys. Your efforts would be useless without some way of expressing the data you collect.
There are a number of options for to help conduct and analyzee surveys, many of them free. Survey Monkey and Qualtrics are some examples of free survey software which allows users to create custom surveys and monitor the results.
Look for trends in the data, compare the responses to one another (such as a cross-tabulation between two questions to see relationships), and other metrics to gather a more clear picture of the data. Some of the options are free, and some require a premium subscription. The point is to take a clear look at the data.
If the client does identify them self, make sure and respond directly to extreme responses (i.e. extremely satisfied or dissatisfied), and speak with them about their responses. Ask dissatisfied clients what you can do to improve. Ask extremely satisfied clients for referrals.
3| MANAGE YOUR CLIENTS WITH A CRM
Customer relationship management sftware, or a CRM, is a powerful tool in tracking your internal marketing efforts. This ties together closely with Measuring Your Responses, because the data you collect on for each client can be stored in your database for future reference.
Send a more intimate survey to your best customers, track the responses for blog subscribers differently from paying customers, tag certain users as “currently unhappy” or “very satisfied”, and so on. This allows a more personalized message and hopefully a more detailed response. Infusionsoft is a great tool for CRM and other point-of-sales management.
4| MEET THEM IN PERSON
Speaking of Old-Fashions…
This step may be a little old-fashioned, but there is no more expressive way of telling your client how important they are than asking them how they are doing and spending time keeping up with them.
If the 80/20 rule holds true to your business, and I suspect it’s close, you’ll have a few dominant clients who are pivotal to your success. Make a sincere effort to reach out to these individuals regularly and keep updated on their business and their lives. Invite them to company parties or make a lunch date with the CEO, just make a point of keeping in contact. Professional services thrive on personalization, and you should put the same effort into maintaining relationships with valuable customers.
These are just a few easy methods on how to retain customers and increase your revenue, but there are plenty more ways to keep clients coming back. What are some of the ways you manage customer retention? What efforts have companies done to keep you doing business with them? Did you like it? We’d love to hear your feedback on ideas for good customer relationships!
How To Retain Customers: 4 Tips For Service Professionals