The cost of acquiring a new client can be as much as seven times larger than keeping an existing one, making client retention a priority. Client retention is a company’s ability to retain clients over a period of time. It’s influenced by the number of new clients acquired, and the number of clients lost within a specific period of time.
While client retention is important for all businesses, it’s crucial for niche agencies with a rather small target audience. Since these agencies are fighting over a small pool of potential clients, they need to put in special effort to retain their existing customers.
Client retention starts with the first contact with a client and should be maintained throughout the entire relationship. To improve client retention, you’ll need to consider how you treat your clients at every stage of the relationship, from pre-sale to project offboarding.
Before we delve into how your agency can improve client retention, let’s look at the most common reasons why agencies lose clients.
Most common reasons for client churn
There are plenty of reasons why agencies lose clients, and these vary by agency and industry. However, there are a few reasons that can frequently be noticed at most agencies:
Competition – A client might decide to switch over to a competitor if they believe your competition can provide better results. This usually happens if your agency is bad at setting expectations and communicating results.
Lack of delivery – You can lose a client if you fail to deliver on your promised results or target KPIs.
Poor service – Bad customer service is another frequent reason clients switch agencies.
Price – A client that is trying to cut costs will often decide to stop using your agency’s services and try to build an in-house team.
Why you should focus on improving client retention
Improving client retention can help your agency:
Save time – Keeping existing clients relieves you from creating new proposals, spending time on onboarding, and setting expectations for each new client.
Reduce cost of acquisition – We’ve already established that it’s cheaper to keep existing clients than acquire new ones. Improving client retention will help you reduce your average cost of acquisition and allow you to acquire more clients with a smaller investment.
Increase profits – By working hard on making clients stay with you longer, you’ll generate more revenue from each client and increase your profits.
Generate more referrals – Improving client retention by making your clients satisfied will allow you to generate more referrals because satisfied clients will be happy to recommend your agency to others.
How to improve your client retention strategy
There are a number of things your agency can do to improve client retention. We have outlined seven actionable tips that will help you make your clients satisfied and reduce client churn.
1) Set expectations
It’s crucial that you set expectations at the start of a relationship with a new client. Clients need to understand what kind of results you can deliver, as well as the timeframe in which they can expect the results delivered.
Put in the effort to manage expectations at every stage of the relationship to make sure that clients always understand the current status of their project as well as the progress you’ve made so far. If you don’t manage client expectations, clients will set their own expectations which might differ from reality and cause issues in the long run.
When setting expectations regarding results, never provide guarantees but rather offer a range of expected results that clients can expect. Remember, it’s always better to set low expectations and then overdeliver, rather than setting high expectations and not reaching them.
2) Improve communication
Don’t be one of those agencies that only communicates with their clients when there’s significant progress to report or when something goes wrong. Keep clients informed about what you’re doing for them and how you’re progressing towards their goals on a pre-defined, regular basis.
Regular communication will help you build trust and make your clients feel important and valued. It’s also the easiest way to make them happy.
Consider creating a communication calendar that will help you schedule and keep track of all client communication including meetings, phone calls, and emails.
3) Develop a roadmap for the future
Clients need to know how you’re going to achieve their goals. Develop a roadmap for where you’re looking to take the client’s project in the future so that clients can stay excited about what you’re doing for them.
When creating the roadmap, get input from the client, plot a trajectory, and set a timeline for achieving goals. Remember to revise the roadmap regularly.
4) Ask for feedback
One of the best ways to improve client retention is to ask for feedback from your client’s entire team. Ask how clients are satisfied with your work throughout every stage of the process to find out where and how you can improve.
While it can be hard to hear about what you’re doing wrong, you should always try to learn from your customer’s complaints and improve your process.
Some agencies only ask clients for feedback once clients announce that they’d like to end their relationship with the agency. This allows you to learn from your mistakes but doesn’t help you keep the client.
Consistency builds trust. By providing a consistent experience to all your clients, you let them know what they can expect from you at all times and in all situations.
Clients don’t like surprises; they like predictability. To be predictable, you need to have defined and documented processes that you follow at all times. Map out processes for everything from onboarding and communication, to reporting and billing. Being organized about how you approach client work will allow you to be reliable at all times.
Being consistent and predictable will signal to your clients that they can always count on you to deliver.
Clients will often question your methods and ask why you do things a certain way. They’ll have their own ideas and suggestions. You’ll need to be prepared to explain why the way you’re running their project is the best for them.
You should strive to regularly educate your clients and provide them with various informative materials including articles, blog posts, reports, and ebooks.
Be available for any questions they might have and provide them with additional resources where they can educate themselves on the subject.
It’s a good idea to build in time for educating your clients into your pricing since client education will inevitably be a part of every client-agency relationship.
If possible, consider running monthly or quarterly workshops to educate both clients and prospects.
A good client retention strategy should be based on overdelivering. Try to always provide your clients with more than they expect, and certainly with more than you promised.
Exceeding your clients’ expectations will make them satisfied and happy to refer business to you.
Improve your client retention strategy
It’s much more cost effective to work on keeping existing clients than acquiring new ones. This makes it crucial for agencies to improve their client retention strategy. Improving client retention can help agencies save time, reduce acquisition costs, increase profits, and generate referrals.
To improve client retention, agencies should make sure to set expectations for each client. This will help clients understand what you can do to help their business, as well as how long it’s going to take you to do it. It will also help you avoid unpleasant situations that might arise when clients set their own expectations, and you fail to rise up to them.
Regularly communicate with your clients and let them know what you’re doing to achieve their goals. Consider creating a communication calendar that will help you stay on top of client communication.
Develop a future roadmap for the client’s project to help them understand how and when you’re going to achieve their goals. Ask clients for feedback at every stage of the process to learn what you might be doing wrong and how you can improve. This will help you retain clients that might be already considering switching over to one of your competitors.
Document all the processes you need to manage client work so that you can provide a consistent experience to all your clients. Be prepared to answer all your clients’ questions and educate them at every stage of the process. Provide them with plenty of resources that they can use to further educate themselves.
To make your clients happy, strive to always overdeliver on your promises.