Client retention is clearly one of the greatest unknowns within any business. Once you have serviced a client, will they come back? How many times do I need to have serviced a client before I can really call them “my client”? This will obviously be different across various industries. People are perhaps less dedicated to the same café or retail shop, but when it comes to professional services, this is a different story. Once you find a provider you are happy with, most are loyal. However, in this world of increasing automation and commoditisation of services, this is a concern increasingly raised by practitioners. “How sticky are our clients or are they becoming less sticky”?
Now certainly within accounting firms there is that strong belief that small individual clients are far from sticky, often moving firms at a whim, and at times chasing a better price. Few would disagree with this statement. However, let’s face it, the value in terms of annual revenue attached to each individual client is relatively small, most practices wish to focus on servicing business clients rather than individuals anyway, and as easily as they can go, they can also come in the door.
However, when it comes to more complex clients and businesses, I would propose that it really isn’t that easy to change providers. As a client, it might be one thing to say that you’re not happy with your current provider, but then the hard part is sourcing the alternative. Yes, clients will ask their friends who they use and perhaps try them; however I just don’t think it is that simple. Your current provider knows your history. Think back to the last time you lost a client. Do you know why they left? Was this reason justified? Were you actually disappointed to see them go? Were they, at times, more trouble than they were worth? Were they simply price shopping? These are the types of questions I ask of our clients when they become concerned about client loss. I believe that in many instances, a firm has to work really quite hard to disengage with a client sufficiently for them to seek another adviser.
However, if you don’t believe me, then there is one thing you can do – build and maintain strong relationships with your clients. Whilst automation actually encourages us to have less contact with our clients, my recommendation is to have more. This is an art that financial planners need to develop if they have yet to do so, because regardless of the profession, clients want to feel loved, or at least respected.
We often hear from firms how they never see or speak with ‘X’ percentage of their clients; however I don’t see this as being ideal moving forward, particular where you wish to retain them throughout your practice ownership and beyond. Are you ever intrigued what keeps a client with you who has moved away to another location, state or country. In fact, most firms will say they have clients everywhere, so if their proximity to you isn’t important, what keeps them coming back?
My challenge to all service based professions is to actually work harder at maintaining client relationships. Develop your approach to making your clients feel wanted, welcome, appreciated, respected, part of the firm and so on. If you have a proportion of clients that you would rather swallow razor blades first rather than extend this type of behaviour, get rid of them, they are clearly not the type of clients that you want or need. Set up a program, unique to your firm and its clients, in terms of how they will be communicated and met with. You can’t and won’t work the same way with all clients; obviously your larger clients will require more work and contact than your smaller clients. Some clients won’t necessary engage the same way, and that’s fine, but the effort is being applied just the same.
Some of the fastest-growing firms at present are proactively engaging with their clients by going to visit them at their individual premises. The client is not charged specifically for this time, but keeping them in their own surrounds often means they are more relaxed and more likely to share with you their plans. Such experiences are driving and resulting in this additional work. This is a great example of relationship-based clients who will remain long-term.