The Journal of Accountancy reported in their annual survey that marketing and practice growth appeared in the top five issues list for the first time since 2005, across all five of the firm sizes surveyed. My guess – it extends well beyond the accounting world.
Let’s face it; survival mode prompts difficult client decisions that include changing long-time providers–possibly YOU.
Misreading Client Loyalty
According to a study by three Harvard professors (The Value Profit Chain, Heskett, Sasser, and Schlesinger):
• 73% of our clients are Mercenaries; “regulars”…but will switch if something better comes along
• 17% are Loyalists, engaging all of your offerings and broadcasting your praises
• Apostles (3% of your portfolio) also referred to as unpaid sales reps, behave much like Loyalists, but also provide constructive criticism so you can better meet their future needs.
Did you catch the scary part? Yup, statistically speaking, nearly three in four of OUR clients are Mercenaries. Indeed, we tend to overestimate client loyalty levels. Recessions don’t help.
Quietly Losing Adhesion
Like a band-aid that’s losing its glue, client losses, except for special cases (e.g. – government bids, mergers, closings, etc.) result from a gradual detachment, a sliding down the curve from apostle to loyalist and then from loyalist to mercenary. The key ingredient in the glue is relationship strength, not institutionally, but at a personal level. The less clients feel attached to us, the easier it is to rip the band-aid completely off.
We must create value from the client’s perspective. In turbulent times the status quo isn’t enough.
But how? Its starts with a spirit of GIVING, not quid-pro-quo, but giving with no strings attached. And, as Michael Port (Book Yourself Solid) implores, the value you give must be RELEVANT.
Here is a seven step client nurturing plan designed to cultivate Apostles and improve client retention rates:
1. Be Proactive – Call them before they call you. For example, one of my coaching clients surprised his contact with news of an $83,000 refund check (they scrub every client file seeking losses they can back-apply NOL’s resulting from ERA legislation). That’s apostle behavior!
2. Make introductions – Whether it’s a referral source or a prospective client, your clients love to get introductions, don’t you? Commit to making a minimum of one introduction per day (via email, linked-in, twitter, facebook, etc.)
3. Sampling – Anything free and relevant adds value (see my blog “Free Medium Coffee – No Purchase Necessary”). Send them links to blogs, podcasts, articles, webinars, white papers or books.
4. Compassion – Send them handwritten thank you, congratulations, and condolence cards. Include a Starbucks or Amex gift card for achieving something special. SendOutCards.com automates the process. Remember, “People don’t care how much you know until they know how much you care.”
5. Business Reviews – Set up periodic meetings to review your relationship together. It’s a real opportunity to reach higher level contacts and ensure you’re truly serving them. Tip: make it THEIR meeting.
6. Face-time – Nothing beats live and in-person. Email is ok. Phone is better. In-person is the best.
7. Schedule it – whether you still use a paper calendar or an automated CRM program, decide how frequently you want to touch each client, then schedule your touches.
How would your clients categorize you? Mercenary? Apostle? You sure?
Good news – not only will your nurturing program improve your retention rate, giving makes us feel good and inspires more giving. Think about how you feel when someone gives something of value to you.
Clients don’t leave their Apostles.