Client Retention 101

COLUMN BY GREG SIMONS

It's been said, "It's more expensive to replace a customer than it is to keep one." Indeed, there are many efficiencies to be gained by a business proprietor through the ability to convert existing business into repeat business. Client churn translates into increased demands on marketing dollars, potentially sucking the black from a business’s bottom line. Further, client churn is often symptomatic of problem sources, including problems that can lead to damaging business reputations through clients who are displeased with their experience, and as they say, “A happy client will tell a few of their friends, while an unhappy client will tell all of their friends.” You get the point.

So, how do we take existing business and deliberately convert that into future business in a strategic fashion? How do we up our game, moving the needle from having reasonably good client retention to exceptionally good retention? In service-oriented industries, such as those businesses found in the outdoor recreational industries, these considerations should be central to the operating culture of the business.

Little things, such as thank you cards and birthday cards, are great tools for building relationships with clients, helping to enhance client retention.

Customer Service & Product Delivery

This one is a no-brainer. Providing products and services that at a minimum meet the client’s expectations are the foundation to establishing a clear path for repeat business. So, what determines whether your product or service meets the minimum threshold? Fundamentally, some of this boils down to whether there are other options available to the market that offer equal or better products and services for less pricing. If your competition is offering better value for the dollar, then this will often result in a discerning public who weighs their options along the way, perhaps choosing to move their business elsewhere based on a perceived better buy for their dollar. A good rule of thumb is the adage of “underpromising and over-delivering,” while also making sure that that your marketing platform is not too milk-toast or lacking adequate salesmanship. Bottom line, happy clients are paramount when it comes to retention.

Build the Relationship

A key to high client retention hinges on relationship building. Developing loyal support from your clients not only allows you to retain their business, but ideally, you are building advocates for your company. Your ideal client is one that effectively serves as an outside salesman without being on the payroll. As I tell our support team, we want our clients to feel as though they are cheating on us if they do business with a competitor. Relationship building with clients should be considered a process. Follow-up communication, thank you notes and birthday cards are great tools for cultivating these relationships. We send out photos to many of our clients and have also found that most of our clients enjoy seeing their photos built into our media tools. In the hunting and fishing business, harvest photos and catch photos are incredibly important to hunters and fisherman; they enjoy using photos to reflect on the adventure, and they like sharing these images with their friends and family. From a retention standpoint, photos, thank you cards and occasional phone calls help build relationships and create ambassadors for your business. And, remember, the most prized possession that we have is our name, so remember their name and address them by their name.

Offer Product/Service Options

A great way to retain existing business is by offering choices and variety. Through my hunting business, we have a multitude of options for our existing clients to consider when they are planning their next trip. For the client who recently hunted whitetails with us, perhaps they are not interested in another whitetail hunt, so us offering elk, mule deer, pronghorn, turkey and other hunting options allows us to potentially keep them in our circle, as opposed to them looking into possibilities with a competitor; and once your client uses the services of a competitor, there is risk that they will develop a relationship with them, and it potentially short-circuits your ability to retain that business in the future. Product packaging is a way to take similar products and create different looks and different experiences as a means of creating options. Networking and outsourcing through other thirdparties can also be a way to develop a broader menu for your existing client base, but you run the risk of the third-party not respecting their business relationship with you and effectively “stealing” your client.

An adaptive and “patient” approach will occasionally allow you to convert tough customers into loyal clients, making proverbial lemonade out of unpleasant challenges.

Making Lemonade

Perhaps some of the most loyal clients are those that either had a bad experience with your company, or are simply difficult clients to appease, and all industries have these “tough customers.” Unhappy clients and tough customers present an interesting and sometimes challenging dilemma. Human nature is to want to wash your hands clean from such people. However, when a service-provider goes the extra mile and salvages these matters, especially with unhappy clients, this “twist of fate” can create a magical outcome. Many people, on occasion, have an innate desire to want to be caudled or “put up with,” and it’s sometimes these same people that have a deep appreciation for someone who either went the extra mile or perhaps simply heard them out and ultimately “made things right” for them. This strategy for making lemons into lemonade is often a matter of using the “F” word when it makes sense. . . “F” for flexibility. A willingness to adapt to unpleasant challenges can often result in great outcomes. Simple things such as saying, “I’m sorry,” often cost you nothing, other than suppressing your pride. Providing concessions to earn an unhappy client’s confidence may be an alternative that has short-term financial costs while yielding long-term gains. Be creative, treating these difficult situations as an opportunity, and over time your service culture will likely find that lemonade stands have a place in your business strategies.

The Free Throw

And, last but not least, be nice. Yep, it’s that easy. . . be nice! Humans being humans, the simple idea that people tend to reciprocate in a favorable way when they are treated nice should be considered Business Service 101. So, be nice! You’ll likely see that this is a “gimme” when it comes to advancing the ball down the field regarding client retention.

The author, Greg Simons, co-owns multiple natural resource related businesses, including a company that specializes in the development of wildlife enterprises and wildlife management programs on private lands. For further information on that company, check out WildlifeSystems.com.