When it comes to customer retention, the adage “familiarity breeds contempt” should be recast as “familiarity breeds complacency.”
It’s too easy to take longstanding accounts for granted, particularly given the constant pressure to develop new business. But if you’re not actively nurturing your client relationships, your competitors will be happy to do it for you.
Are you doing enough to keep your best clients loyal? This is not a hypothetical question — it’s one that can have a real impact on your bottom line.
For example, global management firm Bain & Co. theorizes that increasing client retention by as little as 5 percent can increase profits by as much as 95 percent.
Here are five key strategies that can help you protect the relationships you invested so much time and energy establishing:
Cultivate multi-level relationships
A single point of contact is not only foolish, it’s also risky. Multiple touch points across the entire delivery team provide unique perspectives about the client’s culture and pain points.
It also expands your visibility. That’s why we constantly ask for introductions to other departments, functions and affiliates.
Resist using price-based incentives
Using deep discounts as a business development tool can backfire in the long run. You’ll be forced to raise prices to recover profits, which only works if you outpace your client’s expectations of speed and customer service.
Better to price where you need to be from the onset and add value by providing metrics, insights or services the client can’t create on their own.
Inspire with innovation
Constantly evaluate ways to bring innovative ideas, efficiencies and cost-saving strategies to your customers — without being asked.
Empower your team to say “yes” whenever possible. And don’t forget to ask your clients, “If you could change one thing about our service, what would it be?”
Put yourself in your client’s shoes
Avoiding tough decisions erodes trust and causes a slow, lingering account death. If a client has to jump through hoops, it quickly doesn’t become worth their time.
Make sure your senior managers are aware of the top five issues your best customers are facing and proactively respond.
Be uncompromisingly candid
You must be willing to speak the hard truth when a client relationship hits a snag. Give your customer all the information you have — good or bad — along with potential solutions.
An example shows the importance of this last point. Our company was recently asked to rebid for a client we’d worked with for more than 20 years.
That was a wake-up call, but we approached it as a positive step to reinforce our partnership. We’d earned the right to be frank, so we recommended improvements to the client’s internal workflows that would have an immediate positive impact on both parties’ satisfaction with the relationship.
One final thought: If you’re not tracking your average client tenure and retention rate, you should be. If it’s good — promote it heavily. It boosts credibility and highlights the unique value proposition that keeps your clients coming back.
Greg Lignelli is the COO of System One Holdings LLC delivers workforce solutions and integrated services to help clients get work done more efficiently and economically, without compromising quality.