Tag Archives: retention

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Client Onboarding Best Practices

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It’s official—the contract is signed and you have a new client! You’re super-excited about commencing work on an interesting project. It’s game on and time to put your best foot forward. As you stand at the threshold of this new opportunity, are you thinking about how you might create a 5-star first impression of yourself and your company? Consider this—you can devise a unique protocol for new (or returning) clients that when implemented will showcase the professionalism of your organization and also officially welcome clients and make them feel confident and even more pleased with the decision to hire you.

Developing a standard procedure that welcomes new clients to your company and inaugurates the working relationship is a practice tailor-made to cast your company in a favorable light. You are already familiar with the ritual of clients asking you to provide certain information when a working relationship begins, in particular your Social Security or Employer Identification Number, mailing address or bank account and routing numbers. Launching your new client protocol will enable you to reciprocate with a process that communicates the competence and sophistication of your business practices. Implementing your new client welcoming strategy will distinguish your organization from competitors and also create conditions for a working relationship that will likely to meet or exceed client expectations.

Right out of the gate, you’ll show clients that they are in good hands, that you’ve got this. It is imperative that Freelancers who operate in the B2B sector present to clients an environment of pleasant and welcoming efficiency that validates the decision to do business with your organization as it walks both parties toward the launch of project work. Demonstrating that dependability and attention to detail are inherent in your organization (i.e., your brand) as you prepare to start project work makes a powerful statement. Clients will recognize that you are capable of managing all aspects of the project and the working relationship, from successful completion of the assignment, to providing excellent customer service assistance, such as making adjustments to address individual client needs or after-sale support and training.

This welcoming process that forward-thinking organization leaders present to clients is called onboarding. Onboarding can be described as a road map that guides new clients through a standardized mutual introduction that’s conducted in advance of starting the project work. Onboarding may also include an after-sale product or service walk-through to ensure clients understand how to optimally use the product or service purchased and review how to bring about the expected solutions. The primary purpose of onboarding is to anticipate and address the most frequent client questions and eliminate miscommunication that may lead to frustration or disappointment with the purchase. A personalized and seamlessly executed onboarding process makes clients feel supported, confident and ready to derive value from the fulfillment of the project work or use of the product or service purchased. Good onboarding makes good business.

Onboarding is credited with increasing client lifetime revenue value—the total revenue you can expect to generate from doing business with a customer during the business relationship. A well-designed and implemented onboarding process enhances client satisfaction and is thought to increase client loyalty, stimulate repeat business and referrals and minimize client churn. Effective onboarding is recognized as a competitive advantage that accesses significant benefits (see below). See also suggestions of potentially useful elements of a B2B onboarding process.

  • Establish a positive and productive working relationship with clients
  • Step One for building the foundation of a successful customer retention strategy
  • Showcase your competence, professionalism and efficiency
  • Enhance your company brand

Schedule a videoconference call or face2face meeting

Within one business day of signing the project contract, schedule a videoconference or face2face meeting with the client’s project leader. This will be your first onboarding gesture, a standard business etiquette courtesy that enables you to meet the client’s project contact (who may not be the person who signed the contract on behalf of the client’s company) and express how pleased and excited you are to work with him/her. Once the pleasantries have taken place, you and the client contact can discuss how to initiate the project work or, if the client purchased a product, e.g., a software service, you will facilitate a tutorial (after-sale support) to ensure that the client will be comfortable using the product.

Because onboarding exists to give the working relationship a smooth and efficient start that is inclined to culminate in favorable results, you’ll want to immediately confirm your access to whatever resources will be integral to efficiently and successfully performing the work. As well, make certain that you clarify the role and responsibilities and availability of your client contact. Confirmation of the project timeline, project milestones and payments linked to achieving the milestones is also best done during the initial meeting with your client contact. Another agenda item is to ask the client contact to describe what a successfully completed project will look like. The answer will confirm what you must deliver to meet or exceed client expectations. Take notes to ensure that you fully understand all metrics the client will use to define success.

After reviewing the important points made, send an email to your client contact to memorialize everyone’s understanding and complete the onboarding process. Your client will be certain to appreciate your attention to his/her needs. Make it obvious that your goal is to produce excellent work that positions the client to look good to the higher-ups at his/ her company. As a final client onboarding gesture, assemble a few branded swag items if you have any, e.g., pens, note pads, tote bags, water bottles and the like, and ship them to your client’s office.

B2B Onboarding Software

To make your onboarding process smoother, there are effective and affordable digital tools that you might want to research. The tools can function as a Freelancer’s onboarding assistants that save you time, keep things organized and achieve the important goal of making clients feel supported every step of the working relationship. Here are B2B onboarding software options to research.

  • Sending welcome emails, scheduling meetings and assigning tasks can be done automatically.
  • You’ll always know where the client is during the onboarding journey and if they need extra help.
  • Receive feedback data on how clients are engaging with your onboarding process, so you can identify sticking points and improve your process over time.

Happy 4th of July and thanks for reading,

Kim

Photograph: © International Churchill Society. Cunard Line’s RMS Queen Mary made her maiden ocean voyage in May 1936, sailing from Southampton, England and docking in New York City.

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Fight Back Against Recession

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Economists and other thought leaders predict that 2023 will be a recession year and if the prediction holds, many Freelancers will see a decrease in sales revenues. Diminished revenue has the potential to bring on many unpleasant outcomes, among them the imperative to reconfigure how you can best allocate your shrinking funds. Belt-tightening isn’t fun, but do it right and you might survive or even, eventually, thrive. Take these three actions:

  1. Defend cash reserves
  2. Identify most profitable business activities
  3. Guarantee the optimal delivery of products and services

Conserve cash

You may not have a large amount of cash on hand in your business, but make a point to locate where you might find revenue that hasn’t been tapped. The first place Freelancers should investigate is the Accounts Receivable file. Rethink your strategy to collect unpaid AR and better still, start planning for AR when discussing the agreement with clients you’re about to work with. Request up-front money before you start project work on jobs that bill for less than $100—10% – 20% in advance is reasonable. Second, tie interim payments to project milestones where possible. Institute policies to avoid leaving more than 50% of the fee payable when project deliverables are handed over. The best defense is a good offense.

In the present tense, identify outstanding invoices and tactfully, persistently, pursue payment. Follow-up with clients who might be struggling to pay invoices and negotiate a payment plan if possible. Do whatever you can to ensure that all money owed to you will be paid as soon as possible (FYI, I’m negotiating right now with a client who should have no problem paying, but is 60 days late). Bring in the money and hold on to it—spend only on activities with demonstrated potential to increase revenue.

Double down on money makers

Going into a recession is a great time to do an audit and verify the most profitable parts of your business. When the economy becomes favorable again, you’ll be even better set up for success. Once you’re sure of the money-makers, do what you can to expand billable hours of those assignments. If you can scrape together a marketing budget, here is where you spend.

Marketing sometimes seems counterintuitive when you have less available revenue but in most cases, you can’t make money unless you spend money. What you must do is limit spending to activities that positively impact revenue generation. It could be that you buy a software program that makes it faster to generate and send client invoices. You might also invest in making credit card payments available and thereby make it easier for clients who can’t afford to write you a check can nevertheless use credit to pay your outstanding invoice.

There are also the more immediately recognizable marketing activities, among them selectively attending meetings and conferences where you might encounter prospects who may become clients and advertising, print or on-line, in publications that are read and respected by your target audience for your rainmaking projects.

All about deliverables, client retention, referrals

Happy customers create more business. Repeat and referral business is extremely important in a recession. Ensuring that your clients are happy is vital in any economy but especially in a recession. Creating glowing online reviews, testimonials and good word-of-mouth are essential to growing your revenue when times are tough (and even when there’s lots of money rolling around).

Sometimes when the economy changes, so do your client’s needs. Extract this opportunity, hidden in adversity, to learn more about your clients and what they feel they need now to ensure the survival of their organizations. Now is the time to talk to your clients and discover any changes in what they consider the pain points and priorities. Once again, it will be demonstrated that when you are attuned to the needs of your clients that knowledge can lead to more more active clients, more referrals and more revenue and profit.

Thanks for reading,

Kim

Image: © Keystone/Hulton Archive/Getty Images. Protesting the rise of food prices in 1973.

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Course Correction: Tacking Through Headwinds

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When you decide to become a Freelance consultant or business owner, your mission is to build and launch a successful and sustainable entity. To that end, there will be Important Things you must do very well and a corresponding list of Big Mistakes you must avoid and summarily correct if you fall into the trap. Our old friend the SWOT Analysis (Strengths, Weaknesses, Opportunities & Threats) reminds us that when leading a venture there’s always something to analyze, fix, capitalize on, or avoid. Below is a list of usual suspects that can tank a business. Be on guard!

Failure to understand the customer

Apologies for hammering this topic in nearly every post, but it’s impossible to overstate the fact. If you plan to become self-employed or open a business (and you must make a plan, even if it’s an outline scrawled on a cocktail napkin), you must be assured that you:

1). Have an accurate description and understanding of the customer segments you expect to buy from you and

2). Verify that your choice of prospective customers has a need, if not compelling reasons, to buy your product or service at a volume that will sustain your venture. In short, you’ll need a critical mass of paying customers.

Failure to research the marketplace

First thing you do is research the chosen industry and confirm that your sector is on an upward slope because under no circumstances do you want to enter a shrinking market. Also, search for announcements of new products and services that will soon be released, to verify that a competitor will not make your product or service obsolete. Furthermore, search for updates that may reveal potential new customer groups for you, or shifting demand for current products and services. In other words, customer loyalty can wax or wane, new iterations and uses of what’s available can develop and nothing is static and forever.

Failure to choose a good business model

Create your roadmap for customer acquisition and achieving profitability. Included in your assessment will be how you’ll source, create and bring your goods or services to customers. Decide also the payment methods you’ll accept and when payment will be made (billing after the product or service has been delivered to the customer or payment when the goods are ordered?).

Failure to develop a coherent marketing strategy

It will be tremendously helpful to create a multi-prong marketing strategy in which you’ll outline basic promotional goals for what you’re selling—-sales/marketing funnel, newsletter, blog, social media, branding, PR, website messages. All paths must travel in the same direction. All elements , text and images, must advance and support the same story.

Failure to create an effective customer acquisition and retention strategy

Identifying the customer groups that you’ve confirmed are a natural fit for your products and services is only half the story (sorry!). You then need a plan to reach out to them— that’s what your marketing and brand appeal exist to do. The value of your products and services, plus the efficiency of how you deliver to the customer, along with your diligent quality control, customer service and post-sale support impact customer retention and referrals.

Failure to anticipate required cash-flow

Posts on March 15 and April 19 addressed pricing and cash-flow, as regular readers will recall. The objective is to lay the groundwork for generating sufficient revenue to pay expenses, pay employees, pay yourself and reinvest in the business. Timing is everything and money must be available when you need it most. If there are gaps, corrective action should be taken immediately.

If invoicing is how you generate revenue, take steps to invoice on time. Insert on every invoice a polite phrase to indicate that payment is due upon its receipt. Give yourself an infusion of cash by asking for 15-20 % up front on projects where you anticipate billing $1000 or more. Worse case scenario, you’ll have to take an under-the radar unglamorous part-time job or get lucky and score an adjunct teaching gig at a local college or business incubator (BTW, I’ve done all of the above).

Failure to price appropriately

Pricing is an integral component of the marketing strategy but it often gets treated as an afterthought. Your revenue projections will underperform if you don’t price appropriately. Prices must support profitability as well as be perceived as reasonable to prospective customers. They must reflect your brand, whether luxury/premium, mid-market or discount. Think carefully about the message that your prices send to prospective customers.

Thanks for reading,

Kim

Photograph: On the rocks, aftermath of a nor’easter at Lewis Wharf in Boston Harbor, October 17, 2019

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5-Star Client Onboarding Leads to Smooth Sailing

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Hallelujah, you’ve just brought in a client, and a good one. You and the team are psyched to start working and prove your bona fides but may I suggest that you slow down and present what might be called a “soft opening” for your new client? While you want to honor deadlines, it’s good business to first give new clients a proper introduction to your company, an opportunity to understand how his/her team and yours will pleasantly and efficiently get the job done.

This first order of business is a powerful move purposed to set the stage for a mutually satisfying working partnership. As it is for so many important goals, when your intention is to develop positive and long-lasting client relationships, it makes sense to begin with the end in mind. When you consider the big picture you’ll realize that an effective client retention strategy actually starts with good onboarding.

Onboarding is a series of choreographed actions that introduce new clients to your company and show them how to access and utilize the value in your products, services and organization—-everything that made them recognize you as The One. Your onboarding program sets the tone for productive client-company relationships, signaling that client expectations will be met and reconfirming that selecting you to do business with was a wise choice. Ideally, the onboarding experience you present will amplify your clients’ trust and confidence in you and your organization, resulting in referrals, recommendations and repeat business.

Onboarding is integral to client retention and limiting client churn, meaning one-and-done assignments. I don’t have to remind you that it costs at least five times the resources— your time and money—- to land a new client than it does to keep those you have. There will always be one-off projects but continually starting at zero and chasing prospects is expensive in terms of time, money and energy.

The top two reasons for client churn are 1) the client doesn’t understand your product; and 2) the client doesn’t know how to obtain the expected value from the product. Your thoughtfully designed and well-presented 5-star onboarding protocols can solve both problems. Here’s how you can greet new clients and start persuading them to become long-time fans and devotees of your organization.

Onboarding building blocks

Along with a welcome email, in which you thank the client for choosing your company over the other potential options and letting the client know how excited you are to work together, a 5-star onboarding recipe can include all or some of the following. Making the client and his/ her team feel confident in and comfortable with you and your team is the onboarding purpose.

  • Video tutorial
  • Live online or in-person product training
  • Follow-up video or phone call to confirm that the client is properly using the product or service purchased and is satisfied with the results and outcomes (and to troubleshoot where necessary)
  • In- person or videoconference meeting to introduce your project team and the client’s team, to discuss roles, milestones, invoicing schedules, reporting updates and the like
  • Company logo swag items and/ or a gift basket delivered to the client

The good news is that your new client already likes and trusts you and believes in your product or service and that’s why the decision to work with your organization was made. Build on these front-loaded advantages by creating an onboarding method that shows clients how to have positive experiences when using your product or service and working with your team. Your onboarding process is a follow-up step of the promises made in your sales talking points.

The onboarding process has lasting benefits for your clients and your business. Onboarding makes clients’ lives easy. It is vital to lowering client acquisition costs, increasing client retention, increasing the average lifetime value of clients and supports business growth.

Thanks for reading,

Kim

Image: Super yacht Saint Nicolas (230′ 4″/ 70.2 m) at the 2018 Cannes Film Festival

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10 Tips to Create Repeat Business

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A well-known study conducted by Frederick Reichheld of Bain & Company in 2010 confirmed what has been well-known anecdotally by business owners and leaders for decades—that it costs (at least) 5 times more to bring in a new customer than it does to keep the customer you already have. Decreasing churn, that is, the phenomenon of one-off customers who are never seen again, is not the way to build a sustainably profitable venture. You don’t want to run a business that behaves like a revolving door.

Your repeat customers are loyal to your brand because they have had good experiences with you. Due to this, repeat customers are highly likely to promote your brand through word of mouth or social media and on review sites such as Yelp and Trip Advisor. In other words, your repeat customers pay you with referrals and testimonials that bring more new customers to your door. It doesn’t get better than that!

As you build your business and go about refining and strengthening your brand, you should strive to cultivate a community that believes in your brand, that is loyal and is invested in seeing you succeed. One of the best ways to ensure customer loyalty is to make your customers feel that they’re a part of something rewarding when they engage and do business with your brand. Below are a few low-cost, no-cost actions you can take to promote customer loyalty, which usually translate into customer retention, I.e. repeat business and referrals, too.

Surprise and delight

Pleasant surprises are always a good thing during the course of a customer relationship. Introducing a nice surprise, typically in the form of an unexpected little perk for the customer and in particular at the beginning of the interaction, is a great strategy to differentiate yourself from competitors. It’s good business to show customers and serious prospects that you’re a cut above.

Customer experience, customer service

According to a 2018 survey of US consumers released by the multinational professional services company Price Waterhouse Coopers (PwC), which happens to be the second-largest professional services firm in the world, consumers rank price and quality at top-of-mind when buying decisions are made. But when they think about interacting with companies they buy from, 73% of survey respondents reported that positive experiences influence their purchasing decisions and 65% feel that a positive buying experience is more influential than great advertising.

You basically have only one chance to get your customer experience and service right. 32% of customers surveyed reported that they’d stop doing business with a brand they loved after even
one bad experience.

Make an effort to structure the experience your business provides to reflect what matters most to the customers. When customers feel appreciated the company benefits, primarily from customer retention and referrals. 86% of survey respondents indicated that they’re willing to pay more for a good end-to-end customer experience and 80% say their reason for switching to another company was poor customer service.

Email marketing, social media, blog, newsletter

Update your customers by way of your website and social media accounts about what’s new—-special offers, new products or services or special pricing and be certain to include those who have not purchased in a while. If you publish a newsletter and/ or blog, include your product and service special offers, special pricing or new product or service announcement. Get your community excited about what’s happening and they may share the good news with those who could become your future customers and loyal fans.

Retain on your mailing list all customers with whom you’ve worked over the past five years, including those who’ve been inactive, and also retain on your mailing list prospects who have had some level of engagement with your organization. Always position yourself to win over a prospect or win back an inactive customer. Until someone clicks the opt-out button, continue to send marketing emails, your newsletter and/or your blog. You never know when lightening will strike.

Payment made easy

Make paying for your products and services easy. By adding digital payment options such as Square, Paypal, Bill.com, or Stripe and facilitating direct deposit payments to your bank or debit card and/or accepting online check payments, you’ll encourage customers to do business with you more often because you’ll make paying invoices a convenient process. Easy payment is an element of a pleasant customer experience.

Website and social media

Merely having an “online presence” is no longer enough. The internet is over-saturated and short attention spans are the norm. To maintain the appeal of your social media accounts and website, make your content—text, audio and video–relevant and timely. Constantly confirm that your posts and images resonate. Update regularly with fresh images, blog posts and and other text, audio and/or video.

Thank you card

The survey revealed that human interaction matters now—and 82% of U.S.
consumers want more of it in the future. With that in mind, a small personal gesture, such as sending a thank you card (or note) to a new customer, or one who has spent a certain threshold amount is a powerful statement. Your card or note can create or enhance the feeling of community and build loyalty for your brand.

Special occasions

The PwC survey found that when customers feel appreciated, they are more likely to recommend or endorse a brand on social media or review sites, subscribe to a brand’s newsletter, sign up for special promotions and make repeat purchases. Sending cards to mark occasions such as customer birthdays, if that is appropriate for your industry, or holiday cards in December is a predictable but usually much-appreciated way to communicate to customers your thoughtfulness.

Showcase testimonials

If visitors to your website and social media accounts see your customers and colleagues singing your praises, in text, audio, or video, then chances are they’ll be more likely to take a chance and buy from you themselves. User-generated content in the form of reviews is a powerful way to win customer loyalty. Case studies in text or video format, are also quite compelling since the story of how you and your team assess and resolve a problem is told.

After sale service

After-sales service often amounts to listening to customer feedback and being available to answer questions or give encouragement. After-sales service can make the difference between a happy customer who loves doing business with your organization, or one who is underwhelmed or even frustrated. A follow-up call to a customer, especially a new customer, will 1). Show your empathy—you care about the customer’s pain point or goal; and 2). Ensure that the customer is achieving objectives. If the solution isn’t working as expected, you can quickly diagnose the glitch and fix it. If a training will help, deliver it, on the spot or by appointment. You want to create a cadre of satisfied customers who will become your loyal cheerleaders.

Do the math

While at the University of Lausanne in Switzerland, the Italian economist Vilfredo Pareto (1848-1923) in 1896 demonstrated that on average, a business will derive 80% of its revenue from 20% of its customers. Further research has demonstrated that the likelihood of selling to an existing customer is 60% – 70% and repeat customers will on average spend 31% more than your new customers. Just a 5% increase your company’s customer retention rate will reward you with a 25% increase in profits. Are you convinced yet?

Thanks for reading,

Kim

Image: © WalterFilm. Marilyn Monroe in a publicity photo for How to Marry a Millionaire (1953, 20th Century Fox Studios)

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Multiplication Table: Inclusive Interpretations of Business Growth

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I’m not much of a gambler, but I’ll wager that at least 75% of those who aim to track the growth of their business or self-employment venture follow just two metrics—net profit and market share (or the length of the client list). The two are reliable indicators of business performance and so most will look no further. But if you think about it, limiting one’s assessment of a business to just two metrics is short-sighted and will not yield a comprehensive measurement of business performance. Furthermore, focusing exclusively on revenue means one is likely to overlook other metrics that demonstrate growth.

A business is a complex organism that consists of numerous variables that play a role in its success or failure. In order to thoroughly measure the performance of a venture, Freelancers and business owners would be wise to look beyond the usual suspects and broaden their view and understanding of what’s going on.

It’s a beautiful thing to regularly monitor Key Performance Indicators. It’s even better to know which KPIs, when considered together, will accurately reflect the state of the venture. Revenue and profit are the king and queen of KPIs, but forward-thinking business leaders also monitor less obvious but still powerful growth indicators.

Let’s consider two metrics that matter in every business, churn and referrals. Churn occurs when customers who could reasonably be expected to at least periodically do business with a company instead sever contact and take their business elsewhere, presumably to a competitor. The opposite of churn is customer retention. Referrals are recommendations of potential customers to a business, made by current customers of that business or those who are familiar with the business. A business leader should not only monitor referrals and the churn rate, but also create strategies to encourage the former and discourage the latter. Let’s talk about it.

Churn

A high churn rate indicates that the business is not retaining customers and this has an adverse effect on top line (and bottom line) revenue and profit. Now the type of business must be taken into consideration. Wedding planners, for example, can be expected to do business with a bride only once and repeat business is rare. But if customers are severing contact with a business and seeking out a competitor, it signals a big problem and an urgent need for corrective action.

Limiting churn has a positive impact on customer retention. It has been demonstrated by a number of researchers that it costs a business at least five times more to acquire a new client than it does to keep a client. Reducing churn is an indirect multiplier of revenue and profit and is therefore worth the effort.

A well-written customer survey that communicates the company’s commitment to meeting or exceeding expectations and creating a positive customer experience may yield a surprise or two and, most importantly, information that is actionable. Finding opportunities to have face-to-face conversations with customers who have remained may also surface information that will clue business leaders in on modifications that should be made.

Referrals

I am in business to help business leaders identify goals and strategies that will take their venture to the next level. I also frequently collaborate on the branding, marketing, content marketing and social media campaigns associated with that process. Reducing churn to increase customer retention, as well as bolstering referrals, supports both the top and bottom lines of a business.

A great way to pump up your referral numbers is to launch a campaign focused on referrals themselves. The simplest referral campaign is to just ask a customer to “tell your friends.” Another useful tactic that can motivate customers to make referrals is to offer a 10% – 15% discount off their next order, or a product or service upgrade, for every customer who is referred and makes a purchase.

The referral process can be taken online with an easy referral link in team members’ signature blocks. Offer incentives to existing customers, extra services that are valuable to those making referrals to you.

Referrals are a huge vote of confidence because they signal that the company is trustworthy, dependable and doing something right. Referrals are the warmest, most qualified leads a business will encounter and often little more than clarifying the choice of specific product or service features and confirming a delivery date and price are all that’s needed to close a sale. Yippee!

Happy Chanukkah, Merry Christmas and Happy Kwanzaa! Enjoy your favorite holidays and thanks for reading,

Kim

Photograph: © The School Run

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Ramp Up Your Customer Service Protocols

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Identifying competitive advantages for your business can be a real challenge. You probably have a fine product and service line, but how can you distinguish your company from the pack and rise to the top in the minds of customers? As product features and price are not necessarily the determining factors that they once were.  In response, business leaders and owns have turned to the customer experience to build competitive advantages and brand loyalty that are the bedrock of sustainable long-term success.

Before we go any further, let’s define the term customer experience.  The customer experience is your customers’ perception of how your company treats them. These perceptions affect their behaviors and build memories and feelings to drive their loyalty. In other words: if they like you and continue to like you, they are going to do business with you and recommend your business to the others.  Why should business owners and leaders invest time to map out the customer experience and improve it at every touch point?

  1.  Improves customer retention (by 42%, according to some reports)
  2. Improves customer satisfaction (by 33%)
  3. Enhances cross-selling and up-selling opportunities (by 32%)

A 2013 Deloitte survey showed that 62% of companies now rank the customer experience as a competitive differentiator. They are coming around to understand that what customers really want from your organization is help solving their problem. They want to hear what other customers were able to achieve by using your solution. They want to understand the value and benefits your products promise to deliver, not just the product itself.  The Temkin Group,  a customer experience research and consulting firm, in 2018 found that:

  • 86% of buyers are willing to pay more for a great customer experience
  • 73% of buyers point to customer experience as an important factor in purchasing decisions
  • 65% of buyers find a positive experience with a brand to be more influential than great advertising

 

Excellent customer service means you fix your problems without the customer knowing the problem.  There is no reason for customers ever to see the back of the house problems. Never put that burden on a customer. Customer service also demands a timely response as well as empathy. Customer service also includes mobile, since 52% of customers will not return if they have a negative mobile experience with your organization.

A Harvard Business Review study found that customers are seven times more likely to buy a product when their calls are returned within one hour. In addition to speed and customization, you must handle comments with empathy. “I’m sorry,” is a powerful phrase that can repair a bad experience. Everyone wants to be heard, appreciated and respected. Empathy is free and should be a minimum requirement for any employee that interfaces with a customer.

Customer journey maps include every touchpoint and examine frustration points and areas that create satisfaction. Using internal and external marketing data you can look for gaps between what the customer expects at each step and what the customer experiences. Establish a voice-of-the-customer program, which is a formal process and procedure to solicit feedback and share it across the entire organization to all relevant employees.

From the top down, your organizational culture should encourage all employees to appreciate and respond to customer feedback. Through sharing and by using reputation management software, you can analyze data and can implement actionable goals. Continually look for ways for your organization to improve and continue to become more customer-focused.

Thanks for reading,

Kim

Image: L’here du The. by Albert Lynch (1851 – 1912)

 

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Combat Customer Churn

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If you’re ready to greenlight a business idea that you feel has money-making potential, then it’s time to create your road map to entrepreneurial success! Learn to build a Business Plan that will become both the foundation and launching pad for your exciting new venture. We’ll take a deep dive into all the ingredients of a basic Business Plan, including how to evaluate the profit-making potential of your business idea; define your ideal customer groups; evaluate competitors; develop a savvy marketing and social media plan; and build a solid financial strategy that will sustain your dream.  Thursdays March 28 & April 4 6:00 PM – 9:00 PM. Register here .

Every business owner works hard to add new customers to the company roster. Customer acquisition is a key component of an owner’s role, but attention must also be  paid to customer retention. It’s critical that business owners/ leaders develop a customer retention strategy for the organization—and implement it!

Depending on which study you believe and the industry you’re in, acquiring a new customer costs anywhere from 5 to 25 times more than the cost of retaining an existing customer.  Consider the time and resources utilized to recruit even one new customer, to say nothing of prospects whom you pursue and do not win.  It’s much more cost-effective and efficient to keep the customers you already have happy.

The phenomenon called churn refers to losing customers and the metric that measures the rate at which customers are lost, as compared to customers on the roster, is known as the customer churn rate. “Customer churn rate is a metric that measures the percentage of customers who end their relationship with a company in a particular period,” explains Jill Avery, senior lecturer at the Harvard Business School. The churn rate is measured during any month, quarter, or year, depending on the industry and the product or service that your company supplies.

In other words, if your business begins the quarter with 400 customers and ends with 380, the customer churn rate is 5%, since 20 of the 400 customers no longer do business with the company.  Avery goes on to say that many business owners/ leaders prefer to monitor and report churn rate’s opposite: customer retention rate, or how many customers remain. Both calculations tell the same story.

Changes in a company’s churn rate could signal that something is working well (if the number goes down) or needs addressing (if the number increases).  When you notice that an unexpected number (or percentage) of customers whom you’d expect to be more than just one-offs instead decline to do business at least intermittently, it’s time to take action and stanch the hemorrhage. The usual culprits are customer service failing,  products/ services that are not fulfilling customer expectations, or the presence of an aggressive competitor.

Churn is more than a metric to occasionally monitor. The future of your business depends on understanding why customers might leave and knowing what you can to do to retain those who may be ready to jump ship.  Avery advises that “Looking at churn rates by customer segment illuminates which types of customers are at risk and which types may need an intervention. It’s a nice simple metric that tells us a lot about when and how to interact with customers.”

Likewise, it’s important to study your customer acquisition channels. They don’t all yield equal results, so examine each to learn if customers coming through a specific channel have a higher churn rate than others.  Acquisition channels failing to deliver the best customers as you and your team define them will be discovered, so you can decide whether or not it’s worth continuing to fund that channel, or instead shift resources to channels that more consistently deliver the premium customers.

According to InsightSquared, a Boston marketing and sales analytics company, reducing customer churn by 5 % can increase profits by 25 % to 125 %. InsightSquared also found that 70 % of customers it polled leave not because of the product/ service purchased, but because of poor customer service. Further, 91 % of unhappy customers will not do business with your company again.

Other common issues to address include a lack of customer engagement or support, poor product-market fit and the user experience. It is essential to identify company weaknesses and shore up any products/ services that need to be better attuned to trends in market preferences, customer service protocols, or customer engagement that builds loyalty.

A mistake that business owners/ leaders make is to look at churn as simply a number, rather than as an indicator of customer behavior.  Questions to ask include:

  1. What is the company doing to cause customer turnover?
  2. What are customers doing or thinking that causes them to leave?
  3. How can we better manage customer relationships and diminish the churn?

That said, a high churn rate can be the result of poor customer acquisition efforts. “Many firms are attracting the wrong kinds of customers. We see this in industries that promote price heavily up front. They attract deal seekers who then leave quickly when they find a better deal with another company,” Avery says.

Finally, there is no standard acceptable churn metric. Avery cautions, “The truth is that what’s acceptable varies widely by business model and is largely dependent on how quickly and efficiently a company can acquire customers and how profitable customers are in the short and long-term. Some business models thrive despite high churn rates and others rely on low.”

Instead of fixating on a certain number, smart managers look at the churn rate of prior years and ask themselves what they might improve. “It’s really a metric that shows how well you’re managing your customer relationships, and you can usually always improve your performance in that area,” Avery says.

Before you assume you have a retention problem, consider whether the problem instead turns on customer acquisition.  Avery concludes, “Think about the customers you want to serve up front and focus on acquiring the right customers. The goal is to bring in and keep customers who you can provide value to and who are valuable to you.”

Thanks for reading,

Kim

Photograph: 1950s, photographer and location unknown

Marketing , Leave a comment

Trick or Treat! Bring Back Your Lapsed Clients

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Halloween will soon arrive and ghosts and goblins are on our minds—and candy, too. All Hallows Eve (October 31), along with the Christian feast days of All Saints (November 1) and All Souls (November 2) have got me thinking about bringing lapsed clients back from the great beyond and gently returning them to active status. While some clients give us only a one-off project, others are worth a steady, even if sometimes modest, stream of billable hours and as such, they are worth the comparatively small effort it takes to try and lure them back. Here are some statistics you’ll find persuasive:

1. It costs 5 times more to acquire a new client than it does to retain an existing one.
2. You have a 60% – 70% chance of selling to an existing client and only a 5% – 20% chance of selling to a prospect who has never done business with you.
3. Existing clients are 50% more likely to try your new product or service.
4. Existing clients on average spend 31% more than your newest clients.

So you see that we save time and money, as well as make more money, when we return to our lapsed clients. Surprisingly, only 18% of businesses have a defined client retention strategy, according to a recent marketing survey, but you now know that means money is being left on the table, something you cannot afford to do. Begin your client retention strategy as soon as you’re hired for a project. Shift your perspective—you haven’t just closed a sale, you’ve opened the door to a relationship.

Because marketing experts report that 89% of companies recognize that the client experience is a key factor in driving loyalty and retention, do your business a favor and devise a quick client satisfaction survey, maybe five or six questions, and get some post-project feedback. Clients always appreciate that you value their insights on how your organization does business. You might receive information that will make your business more competitive and therefore more favorably positioned to both win back and acquire clients.

The December holidays are approaching and that gives you the most golden opportunity for client outreach, the holiday card. Start thinking about your cards NOW. Would you like to have your local Sir Speedy or Kinko design a card for your clients? That will take some time and you want to be ready to mail in the first week of December. Remember that holiday cards intended for clients have a “Happy Holidays” message and not a religious message.

If you publish a newsletter or blog, clients past and present are ideal candidates for your mailing list. Clients have willingly shared their contact information and that gives you permission to send each a courtesy copy. Your content is an effective way to demonstrate the depth and breadth of your business acumen, making it similar to an ongoing audition for future assignments. Your newsletter or blog are effective ways to keep your organization at top of mind. Nevertheless, include an opt-out feature for those who prefer to discontinue.

Finally, you can offer a 20 % discount to any client who has not worked with you for the past three or more years. You might include the notice in two successive issues of your blog or newsletter, or send a separate email announcement, or both. However you get the word out, I suggest that you honor the discount for any client who requests it, even if it’s a year after the announcement appeared and you just competed a project with that client last month.

Thanks for reading,
Kim

Photograph: Jonathan Frid as vampire Barnabas Collins in the ABC-TV gothic horror soap opera “Dark Shadows” (1966-1971)

Sales , , , Leave a comment

Client Retention: Surpass the Minimum

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In 1990, the consulting group Bain & Company and Earl Sasser of the Harvard Business School analyzed the costs and revenues derived from serving clients over their entire purchasing life cycle and found that regardless of the industry, the high cost of acquiring clients will render many business relationships unprofitable during their early years.

Acquiring a new client can cost up to five times more than it does to retain a current client.  It is only over time, when the cost of serving a long-term client falls as the volume of their purchases rises, that these relationships generate big returns.

The Bain-HBS review found that when the client retention rate increases by 5%, profits increase by 25% – 95%.  Also, long-term clients are more likely to refer new clients to the business and increase sales revenues and profits accordingly.

That said, an ongoing client retention strategy is a must-do for all Freelance consultants and business owners.  Read on and discover how your organization can embed client retention practices in nearly every step of your client interactions.

Context and expectations

When you propose a solution designed to help your client resolve a problem or achieve an objective, include in the conversation your rationale for presenting that particular path rather than another.  Make it possible for the client to better appreciate your decision-making process and divulge how you carefully considered his/her priorities, values, budget, staffing, or other factors that impacted your recommended solution.

We may infrequently discuss the behind-the-scenes thinking that guides the possibilities we envision for a client and his/her organization.  Revealing your big picture thinking demonstrates the depth of the value you attach to the client and his/her unique circumstances and that builds loyalty, trust and a good relationship.

Become an adviser

Don’t shy away from asking questions that will surface your client’s sometimes unexpressed expectations or concerns.  You may discover a solution that is ideally tailored to the clients’ needs when you employ the consultative approach to selling.  You and your client can collaborate on the development of the solution if s/he is comfortable with that process.  Buy-in is a given when the client is a co-author of the process.

Along the way, let your client know what to expect as the solution is implemented; it will also be helpful to review what success looks like.  Communicate often, so that the client understands where you are with the project, especially as regards milestones, Key Performance Indicators, the deadline and other agreed-upon metrics.

Moreover, depending on your product or service line, recommend services to your clients, based on their previous purchases.  According to a 2015 survey of marketers, this personalized touch generates a high ROI.  It shows that you’ve paid attention to client preferences and it is a compliment.

Finally, we are nearing Holiday time.  Make sure that you send cards to clients you’ve interacted with over the past five years.  Who among us does not appreciate a card at this time of year, when we reach out to those who matter?

Thanks for reading,

Kim

Photograph: Corine Vermuelen (2013)  Alicia and John George, owners of Motor City Java House in Detroit’s Brightmoor neighborhood