Looking for creative ways to keep your ideal clients happy, especially during the frustrating challenges that we currently face, is smart business. According to recent Bain & Company research, increasing customer retention by 5% increases profit by 25% to upwards of 95% depending on your industry.
Wow! That is some compelling data.
In the Bain & Company report, Fred Reichheld says: “Systematically rank all of your customer acquisition campaigns on the basis of their yield of loyal customers. Shift resources towards programs that attract the richest mix of loyal customers.” He goes on to conclude that many firms are wasting half their marketing expenses on disloyal customers who will never stick around long enough to pay back the acquisition investment!
What could you do to increase client loyalty and thus improve your profitability? Here are some ideas to consider.
The first step is to identify your Ideal Clients. As Mike Michalowicz says in The Pumpkin Plan, not all clients are created equally. Similar to Pareto’s 80/20 rule, there is a segment of your clients that are a great fit for your company. They value what you do. They are loyal. They are candidates for everything you sell. They give references.
You need to clearly identify these clients. Mark them in your ERP, CRM, and marketing automation systems. Make sure everyone knows that these are your A-list clients.
While you are doing this, create an Ideal Client Profile. This will help you identify the prospects (aka future Ideal Clients) for your sales team’s target account program. (You can find an Ideal Client Profile worksheet in the Revenue Growth Engine Free Tool Kit.)
Once you have identified your ideal clients, consider how you could improve the experience they have with your company. Here are five ideas to get you started:
As a speaker and growth strategist, I travel a lot, making me an ideal client for an airline. I enjoy the perks of the American Airlines AAdvantage program. In addition to gathering points for vacation travel, the airline also gives me free luggage checks, priority boarding, and an occasional upgrade. Most of all, my status makes me feel special—something that is even more apparent when I have to fly on another airline where I get relegated to cattle class. When it comes time to book travel, I will go out of my way to fly American because of these perks.
What could you do to create perks for your clients? In Revenue Growth Engine I talk in detail about how you could enhance loyalty and drive additional purchases through a client loyalty program. Look at other client loyalty programs you are a part of (airlines, credit cards, grocery stores, restaurants...) and consider what aspects of these programs could be adapted to your own business.
Good service is expected these days. In The Experience Economy, Pine and Gilmore make the point that just like products have become commodities, in many cases, great service has as well. They assert that the path to differentiation is by creating a great experience.
One aspect of a great experience is the element of surprise. They define this as, “the difference between what a customer gets to perceive and what they expect to get.”
Go to a Cajun restaurant and you will probably get a lagniappe, “a small gift given to a customer by a merchant at the time of purchase." What small things could you do to surprise and delight your clients?
Many companies assume their clients are OK as long as they are not having problems. When there is a problem, they jump to solve it, patting themselves on the back for responding.
What if you took a more proactive approach. Every company has problems that you could solve. That’s likely how you earned the business in the first place. Why not go back and ask them about other problems in their business?
A Periodic Business Review is a regular meeting with your Ideal Clients where you ask about their business, review your performance, and then collaborate to find new ways you could help them solve problems. While you are there, you also set the stage to ask for referrals.
I continue to be shocked at how few companies actually do this. They say, “We provide great service,” but in practice, ignore their clients outside of reacting to support requests. What would it look like if you added a Periodic Business Review process?
Every one of your clients wants to grow. My guess is that you know people that would be great clients for them.
Think about ways you can help your clients grow your business. Send them referrals. As you do, you become more than a vendor to them, you become a partner helping them grow their business.
Every company wants their Ideal Clients to see them as a value-added partner, not just a vendor providing a commodity.
How do you earn the right to be seen as a value-added partner? You add value! Look at the collective knowledge of your team. How could you harness that knowledge to help your Ideal Clients improve their business?
Share that knowledge with seminars, webinars, private portals, and special events for your Ideal Clients. Position your team as a resource to help your clients solve their problems and achieve the business outcomes they want. As you become a true business resource, you build loyalty.
Client loyalty boosts profits. What action items could you put in place to enhance your Ideal Client Experience and build loyalty?
Originally published on the C-Suite Network.
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