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Client & Customer Acquisition & Retention Process
Executive Summary on Client & Customer Retention
We live in an economy where customers and clients can be fickle and easily transfer their loyalty by migrating to other service providers. Perhaps this has been your companies experience in recent years.
We have developed unique processes to extract an accurate and detailed review of the services you offer your clients and customers. We have successfully applied this process to a variety of industries and firms including legal firms and other professional service providers, financial services, asset management, genetics, software developers as well as construction and manufacturing and process flow companies.
The use of these processes provides valuable data to you so that your service delivery will be more compelling for your clients. This will further strengthen customer loyalty and profitability and, at the same time, will minimise any loss or activities that could put the continuation of business services at risk.
The purpose of this process is to retain existing customers which both provides volume, value and profitability for your business. Further, it can quickly identify areas where the organisation may be at risk due to client migration and be able to take action to prevent minor issues becoming major headaches. This process also opens up the opportunity for cross selling with existing clients and can support the positive development of new customer or client acquisition.
This process is designed to enable professional service providers to accurately assess the relative strength of their commercial relationships with core clients and customers, and ensure that you retain their business. By assessing customer and client perceptions you can improve the processes that support a positive client relationship.
Introduction to Research into Client Acquisition & Retention
Organisations that seek to prosper require growing their client or customer loyalty over time. Few organisations can survive without a strong and committed client base willing to pay for services. The danger for many organisations is they don’t see the threat of falling client numbers and if not addressed quickly, will find that their continuation of business is at risk. Most organisations exist in a competitive environment with customer migration a constant threat. Clients that you may have retained for years may suddenly migrate to another supplier – sometimes without any warning.
In normal economic times your business may be resilient and replace lost customers easily – but in a recession it will take time to prospect for and win new clients and in the meantime, you may have to take urgent remedial action by reducing headcount and overheads.
Information, Data & Metrics on Losing Existing and Winning New Clients
Many companies have no metrics that will tell them the average time that is required to win typical clients nor will they know the cost of winning them. There is considerable additional expense to win new clients and the turnaround time or time lag between initial contact to a new client purchasing your services can be lengthy. It makes sense to develop a detailed and analytic approach to your core client base to examine new ways for building value, while maintaining a strong commercial relationship with your client and at the same time examining areas where you may be at risk of losing that client.
Many large businesses have specific Account Managers to assess the commercial relationship with their clients and their customers but equally many do not. The SME’s often rely on ‘personal relationships’ rather than adopting an analytic approach to building value for the client and perhaps win additional business through cross-selling or partnering with the client to help develop their business.
What’s the Life Time Value in £’s of your typical Client or Customer?
Not many organisations calculate the life time value of their customers. As an example, for motor vehicle purchase the average middle class family will purchase 13 cars during their lifetime with the average cost of vehicle anywhere between £12-£20k, amounting to a huge life time value of £156-260k with an additional £25k+ spend on repairs. The average family spends between £8-10k per annum with a life time value over 25 years of between £200-250k on groceries. As you know, the supermarkets are pretty slick at customer management developing loyalty schemes, whereas motor manufacturers and their suppliers of finance are generally not. How is your business doing in retention of Clients and Customers?
Depending on your industrial sector, losing clients or customers can be a huge problem. Clearly, people supplying big ticket items such as Vehicles, or Lease contracts for a variety of assets, purchasing service contracts such as Corporate Legal Services, Property, Insurance, IT, Telecoms etc are going to have to be pretty adept at not losing their clients. In such markets, with a decline in demand, these companies are very much at risk because others are competing for a dwindling number of clients. Those who are most customer or client focused will be the ones which take action – win loyalty and avoid the worst of the recession.
Ask yourself and your colleagues some obvious Customer Focused Questions
· What is the life time value of your clients and customers?
· Have you segmented your customer base and assigned $ or £ values to your bottom line?
· Does your staff understand the implications of their actions in losing customer loyalty and how it impacts the bottom line?
· What customer facing processes are currently not supporting you in developing long term loyalty with your customers?
· Have you categorised your process improvement initiatives into internally facing and exterior facing?
· Who polices your processes?
· If a serious error occurs what process is administered to resolve the immediate problem and put a long term fix in place?
· Do you know how much time it takes to recruit new clients after others have migrated?
· What processes do you have in place to both prospect for new clients and harvest them?
· Do you have joined up business planning that unites sales and marketing of your core skills, competencies or services?
· Where are you currently most at risk at losing ‘big ticket’ clients and do you have a recovery plan in place should they migrate? Have you set up corrective actions to minimise your loss?
What are the most common reasons why you lose clients and what data do you keep setting business improvement in place?
