Value Driven Strategy for Client Retention
Do You Have a Value Driven Strategy to Enhance Client Retention?
7 Ways to Bring Value and Keep Clients With a Value Driven Strategy
It is little surprise client retention is so prominent in the minds of businesses leaders today. Having success with this can have a dramatic impact on your profits. What is the role of value in these efforts, though, and what are some methods for improving retention in today’s selling landscape?
Why Client Retention Matters
Everyone seems to have a sense that client retention is important. There’s also a strong link between retention and the bottom line. Few organizations realize just how pivotal retention is, though, and how much of an impact it can have.
According to various studies and reports, here are just a handful of statistics that illustrate this point:
- Customer acquisition is upwards of five times as expensive as customer retention.
- An increase of 5 percent in retention yields a 25 to 95 percent increase in profits.
- Selling to a new customer has a success rate of approximately 5 to 20 percent. Compare that to 60 to 70 percent for existing clients.
There are also ancillary benefits to better retaining your existing client base. Customer retention helps develop brand loyalty, and loyal customers are not only more likely to buy from you but are also more willing to recommend your brand to others.
In this way, you potentially get an exponential return on this one customer.
7 Tactics for Improving Your Customer Retention
1. Appreciate the Value of Value
If you’ve been researching anything about how business is conducted today, “value” invariably came up. Value is the cornerstone of selling in this climate. So many people are exhausted with sales pitches and product, and “traditional” sales efforts are largely becoming white noise.
Buyers are more skeptical, more resistant, and more budget-conscious than ever before. That doesn’t mean people aren’t still willing to buy. They are. But if you’re not bringing genuine value to those customer interactions, you’re going to have little to no success.
(Check out these top tips and trends for selling in 2021. Value-based selling is number three on the list.)
2. Opportunities to Upsell and to Cross-Sell
When you can demonstrate the genuine, tangible value of the product or service you provide, you are suddenly presented with more opportunities to upsell and to cross-sell to your existing client base.
Just as you need to approach the initial contact with a value mind-set, you want to ingrain value into your secondary sales processes and systems as well. The idea is not to identify one time or way you can provide value and then immediately switch gears to pushing your products, features, and benefits; the goal is to consistently provide value throughout the life-cycle of a customer.
Value is what customers are looking for today, and this is why the statistics about retention are so dramatic. If you can convince a customer to make multiple purchases, to try different offerings, or to renew their subscriptions, you will see the exponential opportunities associated with retention.
3. Don’t Neglect Value After the Sale
Your sales reps should always be cognizant of where and how they can provide value to clients after that initial sale. They should be actively thinking about different elements of value they can provide. This will help ensure a customer provides business not as a one-off but over a lengthy amount of time.
The challenge here is there are no cookie-cutter answers or templates. Something of extreme value to one group will be ineffective to another. You have to be incredibly keyed in to your customer base, and even beyond that, you should be thinking about hyper-personalization. What’s valuable not to this vertical or even this persona but this actual person.
It’s really easy to start seeing customers as data points in a CRM, but when you take a step back and start engaging with them as real people, results often follow.
4. Walk Customers through the Adoption Process
Especially if you’re a technology or software company, make sure you’re not neglecting the critical adoption piece. If a customer doesn’t have an effective strategy to utilize or to adopt that technology within his or her organization, that’s an easy and needless way to lose an account.
When most customers believe a given tool is ineffective, they simply move on to another solution. The fault, however, might lie not with the product but with their own adoption process. If you can help walk them through that, you can illuminate the value you provide and potentially earn yourself a lifelong advocate—one who, without that extra assistance, would have otherwise quickly canceled the software subscription and moved to another solution.
5. Always Consider Customer Experience
More than ever before, customers are looking for an experience. This desire for experience integrates entirely with the value mind-set. If you can create an effective experience for an existing client, you can create powerful positive associations between that customer and your brand. These emotion-driven initiatives are impactful, resonant, lasting, and effective.
(Sound good? Read more about ways to successfully develop a customer experience.)
6. Think Outside the Box
Having a blog used to be novel for a business. Just having it was a differentiator. Then everybody started blogging, and suddenly only high-quality blogs were still making an impact with customers or potential customers. The same thing is happening today with webinars, podcasts, and many other types of common value-add endeavors.
Quality and genuine value are obviously still paramount, but if you think even a little outside the box, you can potentially find ways to provide something not many other companies are providing right now to their existing client base. This will make you efforts more impactful because customers aren’t blind to them yet.
Maybe that means a workshop, a one-on-one consultation, or a personalized template. As with so many elements related to value, it’s important to think about your customers specifically and what will be genuinely valuable to them.
As you go down this path, don’t forget to take yourself out of the spotlight. The messaging isn’t about why they should buy more of your product or commit to more of your services. It’s not about how great your features and benefits are. The heart of these efforts needs to be about providing genuine education and developing a trusted partnership where you’re seen as a valuable asset.
(Interested in taking a deep-dive into this kind of account strategy? Check out our free on-demand webinar on the topic.)
Because of the time commitment required for some of these efforts, always be aware of the potential upside. One-on-one efforts, for example, might be best reserved for larger accounts that could have a bigger financial impact and a better return on that investment.
7. Think Outside the Box
A key aspect of client retention is also linked to your customer success team. Make sure that group or department is effectively aligned to other relevant departments, including (but not limited to) sales and marketing.
As with many of these endeavors, getting it right often comes down to a shift in mentality. Don’t just think of your customer success team as a place to onboard new clients and to provide service as problems come up. Think of them as a vehicle to help those accounts continue to grow. How can you proactively help your clients thrive and find success? If you do that, you will position yourself as an invaluable partner, and retention will be a significantly less arduous climb.
Have questions? Don’t hesitate to reach out. We’re always happy to help!