Would You Like To Immediately Triple Your Income Whilst Reducing Your Marketing Costs By 6 Times?
Welcome to the power of client retention and nurturing; one of the most valuable processes in business, and one of the most neglected.
Business owners work hard and invest substantially to acquire clients. Yet, once clients are converted they rarely utilise processes that maximise the client’s value.
Acquiring a new client is between 6 to 20 times MORE costly than retaining and nurturing an existing one.
Let us demonstrate.
Let’s say you advertise your coaching services in the Yellow Pages. Your advertisement costs $4,000 and you convert 10 clients. Your Cost of Acquisition is $400 per client. Each client is converted, on average, into a 3-month one-to-one coaching contract, valued at $1,500. Your gross profit is $1,100 ($1,500 – $400).
Your net profit ($1,500 – $400 – all other expenses) is $750.
Most coaches stop there. They feel as though their job is done. In fact, some coaches have the perception that unless a client specifically requests additional services, it’s unethical to propose more services.
Of course, this paradigm of thinking is preposterous. Only by (ethically) getting your clients to undertake a wide range of products and services over an extended period of time can you be of significant value to your client. By limiting their access, for whatever reason, to valuable products and services, you are doing your clients a disservice.
Limited Thinking = Limited Business
The truth is, most businesses fail to think past their first core transaction. This is disappointing and destructive commercially. But it’s most disappointing from a relationship perspective. If you can’t think past your first transaction, it’s impossible to truly serve your clients. Only by approaching the relationship from the perspective of longevity can you create true, enduring value for your clients.
Do you know the number 1 reason clients cease to do business with you? Apathetic Despondence. Your clients don’t feel that you really care. In most cases it’s not that your client stops doing business with you – it’s that you stop doing business with them! Business owners think they’re doing their clients a wonderful service, simply by providing the bare skeleton necessities. They don’t create value in the relationship. They don’t develop a clear point of distinction. They don’t show they care.
As a purchaser of services and goods, how many transactions would you be involved in each year? Hundreds? Maybe even thousands of transactions with different businesses. When was the last time you felt genuinely cared for; special; nurtured by a business? Possibly never!
If you’ve ever been fortunate enough to be served by a business person that genuinely cares about you, you know first hand the loyalty this creates. You buy from them again and again. You’ll travel ridiculous distances, pay more, and buy more frequently… simply because they care. And that makes you feel important.
An Economic Case
As well as the ethical case for retaining and nurturing clients, there is an excellent economical case. Referring to the example earlier, let’s see what happens when we nurture our clients.
Your Yellow Pages advertising resulted in 10 clients, each earning you a net profit of $750 each. At the end of the 3-month one-to-one contract the majority of coaches display their Apathetic Despondence and fail to nurture their client. This results in the relationship reaching a ‘natural’ end.
However, if you nurtured your client over an extended period, they may also invest in: Teleconference Series ($197); Bootcamp ($3,500); Group Coaching ($1,000); Seminars & Workshops ($500); eBooks, eCourse, etc ($500). That’s $5,697.00 income.
You’ve multiplied your gross income by almost 4 times. Your nurturing costs are practically negligible, meaning your net profit has increased by 7 times! This strategy alone can almost immediately turn a coaching business making $30,000 per year into a business earning $100,000 + per year.
How To Retain & Nurture
Retention and nurturing strategies are simple, fun, and low cost. So many businesses fail at nurturing that it makes nurturing such an easy process and massive point of distinction for those businesses that do!
Here are some retention and nurturing strategies to implement immediately:
Link clients and prospects into a regular communication cycle. Regular communication is paramount to any retention and nurturing system. It’s impossible to build a relationship if you do not regularly and predictably communicate. Many businesses ‘dig up’ their databases to use as promotions. This is destructive. You are asking without first giving. Clients and prospects will resent you for this. But they’ll love you for giving them something for nothing; and then providing them with an opportunity to invest.
Thank clients for doing business with you. Most businesses behave as though the client is the lucky one to be using their service. You may behave like this without even knowing it. After every session, service, or product purchase you should THANK your client. Send them an email; sms; card; letter; small gift. Make them feel special and valued.
Give away’s. We all love unexpected gifts. An excellent nurturing and retention strategy is to give away high perceived-value, low cost gifts.
An excellent way to create value for your clients, at little or no cost to you, is to develop joint ventures with other businesses. For instance, you could approach health spa’s and get them to provide a free treatment voucher. They are often willing to provide a free treatment as a loss-leader to acquire new clients. This strategy can be applied across a broad range of services.
Add-value to the relationship. Send clients specific information relating to their challenges. Send research, reports, tools, press releases. Anything that your client will find interesting.
Go further than expected. The key to creating true value is to go further than your client would reasonably expect you to go. If you do this, you tilt the reciprocal obligation in your favour, and your client will feel indebted to you.
And here are some additional pointers to keep in mind…
Focus your marketing on existing clients. Your current clients have already overcome certain hurdles to doing business with you. They are much more likely to buy from you again. Focus most of your time, efforts, and resources on better serving your current clients. Go deeper rather than wider.
Be consistent in your approach and interactions. Treat clients with honesty, humor, and respect. Present a consistent, solid, and professional style to your clients – one they can grow to depend on.
Follow through on your commitments. If you promise to send information or to follow up, be sure to do this. You’d be surprised at how many professionals promise to send information, but then never do. You will gain loyalty and trust by doing what you say you’ll do.
Allow yourself to connect. Find out about their lives, hopes, goals, and desired outcomes. Ask questions that encourage a deeper sense of shared understanding. The greater the level of connection, the greater the mutual satisfaction.
Have fun. It’s easy to get caught up in goals, outcomes, deliverable. Whilst clients do want outcomes, they also want to work with people who enjoy what they do. The more fun you can have while providing strong outcomes, the longer your clients will stay.
Position yourself as a resource for life. Tell clients at the beginning that you want to be their coach for life. That means they can always come back to work with you no matter how much time has passed between meetings.
Ask for feedback and input. At intervals throughout the working relationship, solicit feedback and input. Ask your clients how they feel about working with you and ask if they have suggestions for how the working relationship or outcomes can be improved. Asking for their ideas shows that you care about their opinions and value their contributions.
Share resources. Do you know of a good book that your client might benefit from reading? Tell him about it. Do you have the name of someone who could help your client move ahead on her business plan? Tell her about it. Sharing resources is a terrific way to build loyalty and satisfaction.
Reward them for staying on. You might consider implementing some kind of loyalty or perks program, where your long-term clients are rewarded for staying on. You might offer them gifts, products, or services for a certain level of ongoing participation with your business. Maybe Gold or Platinum Membership to your exclusive club.
Keep learning. The more you focus on gaining new knowledge, new skills, and new experiences, the more you have to offer your clients. The more you have to offer, the more they will benefit. The more they benefit, the longer they stay. Keep focused on your own professional growth and learning – make this a priority. Both you – and your clients – will gain.