Landing new clients is an essential part of business, but retaining customers and growing your existing accounts is just as important – especially when it comes to B2B relationships.
Generating leads takes time and money. Converting these leads to clients takes even more time, effort and skill. That means you are investing a lot in each piece of new business you secure. But getting a new client on board is just the start. If you don’t then look after them and nurture the relationship, all your efforts up to that point could be wasted. They may quickly become just another number counting towards your ‘churn rate’.
By churn rate we basically mean the rate at which your customers call time on their relationship with you, or decide to go elsewhere. This rate can be crucial for your future business growth plans and can be a good indicator that elements within the business need looking at.
Losing clients isn’t always about the service, products or relationship though, there will naturally be some movement here for most businesses. Things can change for all sorts of reasons, including clients making a switch in direction, hitting a dip, industry or government changes having an influence, or even a merger or acquisition.
However, keeping tabs on the clients who leave you can in itself be an eye-opener. Make sure you are keeping detailed records of who is leaving, when and for what reason. What is their feedback – and are you always on top of asking for it? Are there any patterns? Is there an area of the business that needs attention or improvement?
Knowing the average time clients stay with you will also aid you in working out the lifetime value of a client, which will help with your forecasting. Plus you’ll have a figure or percentage you can compare against if you decide to implement any changes, giving you one way to monitor if things have improved.
Reducing the customer churn rate can be beneficial on many levels, not least of which when it comes to your bottom line. If you are aiming to reduce your rate, then here are 5 key tactics to consider:
Make sure customers feel valued
The best way to do this is to keep in regular contact. Be proactive in your communication and updates. What you never want is a customer feeling they always have to chase you and that they’re always the one initiating contact and pushing to get things moving. They want to feel you value them, and if it’s a service you are providing, that you are working hard for them – without prompting! Check your communications are personalised and tailored to their interests. Above all, pay great attention to detail. It’s not acceptable to spell a customer’s name or other details wrong.
For extra brownie points, think what you could do that would add even more value to your relationship. For example, host a free social event for customers that would be helpful for them and their business. It may be you invite a guest speaker to offer advice on a topic that would be of interest and integrate networking opportunities.
Set customer expectations – and nail them!
Don’t promise the Earth if you can’t then deliver it. The last thing you want is a massive disconnect between the first impression you gave to a new client and their expectations for what it is going to be like working with you, and a far less polished reality. They’re not going to stick around long if that is the case. Make sure all areas of the business are aligned and in sync. Set realistic and deliverable expectations, then try to exceed them. If you’re always looking at ways to add value and striving to improve your product, service and delivery, then you won’t go far wrong.
Listen to customers
There is no better place to canvas feedback and opinion on your products and services than from your current customers. You may do this formally, through periodic customer satisfaction questionnaires or calls. Just remember that your customers are likely to be busy people so keep your questions short and to the point. If a customer has a great idea or suggestion for you, then if you can, implement it. And always thank customers for any type of feedback they provide.
Everyone in the team should also be encouraged to record any comments, ideas, moans or niggles that customers share with them. If you can build a culture of openness and transparency then you may hear about any issues far earlier than you would if team members feel reluctant to highlight problems. But getting this info early means you have more time and a better chance of fixing it. If done successfully, active listening can be transformational for a business and its churn rate.
Look out for and react to indicators a customer may leave you
If you know your customers really well then you may get a gut feeling when something’s not quite right and you’re at risk of losing them. But often by this point it may be too late. One way you can combat this is to be aware of, and looking out for, indicators that may give you a heads.
Customer satisfaction surveys are one way to do this. By asking a few standardised questions regularly you will be able to compare answers and check they are staying pretty level. Whether someone would be happy to recommend you to others is one of the most telling questions you can include. If you see any drop or changes in opinion then you will have a warning sign to jump into action.
Another thing to look out for, that can be (but isn’t always) a red flag, is any major change in customer behaviour with no obvious reason, such as them becoming very hard to reach and meetings or calls being cancelled.
Top team on call
Finally, think how important and valued a customer would feel if they were to be contacted personally by the big boss? There is no better way to show just how valued they are, than to hear it from the top. We’re not talking about a Christmas card or letter signed on their behalf - pick up the phone. Customers will know how busy they will be heading up a company, so even the act of setting aside time and making the effort in this way can work wonders for relationships.
As well as keeping clients happy, every business needs to be generating new opportunities. But how to you build that consistent funnel of leads into the business at the start? Download our guide to building the ultimate lead databse online to discover how...