You’ve heard time and again how acquiring new customers costs more than retaining existing ones. And the numbers name it clear – acquisition costs up to 7x more than retention!
Customer retention should undeniably be a top priority for agencies looking to grow.
Imagine trying to fill a jug with a hole in the bottom to the brim. Sounds like a fool’s errand? That’s exactly what chasing growth without a robust retention strategy in place is.
With the average buyer’s journey only getting longer, your investment in acquiring new clients shouldn’t go to waste.
In this guide, we give you 8 proven ways to keep clients loyal to your business.
Jump ahead to:
What Is Client Retention? How Is It Different from Client Acquisition?
Client retention is an agency’s ability to retain its clients over time and prevent them from defecting to competitors. This is an essential metric that every business must track to understand client loyalty and satisfaction with the services offered.
Client acquisition, on the other hand, refers to bringing in new clients.
Depending on a business’ strategies and goals, it may measure client acquisition or retention rates. Ideally, you should measure both to get an accurate picture of how effective your strategy is in acquiring new clients and, at the same time, getting them to renew contracts continuously.
Why Is Client Retention Important for An Agency?
Measuring and managing client retention rate is important to not just stay in business, but also grow over time. Loyal customers, in fact, spend 67% more than new ones.
1. Save Money
Retaining clients directly translates to cost savings – it is cheaper to service your existing clients than to find new ones. In fact, acquiring a new client can cost 5x more than keeping an existing one.
2. Steady Revenue Stream and Higher Profits
A high client retention rate is a sign of loyalty. When doing repeat deals with existing clients, businesses are likely to be successful around 60 – 70% of the time, as opposed to a success rate of 20% with new customers. Increasing retention by just 5% can shoot profits up by 95%!
3. Boost Client Acquisition
Even though client retention keeps your existing clients around, it directly impacts client acquisition. How? The good old word of mouth. If your clients are happy with your services, they are more likely to refer you to their network.
How to Calculate Client Retention Rate?
Here is how you can calculate your agency’s retention rate:
client retention rate (CRR) = ((E - N) / S) x 100
- E is the number of clients at the end of the period
- N is the number of clients acquired during the period
- S number of clients at the start of the period
Say you have 10 clients on January 1, 2022. Between Jan-Oct 2022, you gain 6 new clients while 1 client leaves, taking the total number of clients to 15.
So, your client retention rate for these 10 months will be:
CRR = ((15 - 6) / 10) x 100 = 90%.
So, what is a healthy retention rate for an agency? The exact number will have a lot to do with your industry. But in any case, it should not be lower than 20%. Aim for a rate as close as possible to a perfect 100%.
What Are Some Ways to Improve Client Retention Rate?
Here is how you can improve your agency’s retention rate:
1. Invest in a Smooth Onboarding Experience
Client onboarding is essential to retaining customers over the long term. Over 86% of customers say they would stay more loyal to a business that invests in onboarding and educates them.
Since this is an opportunity to leave an excellent first impression, give your clients a smooth onboarding experience. Understand their needs and help them set realistic goals. Ask questions and be genuinely interested in their business.
See how Zendesk empowers its customers from the get-go, giving them comprehensive resources to understand the product.
2. Understand Your Client’s Goals
If your team is unaware of the client’s goals, it’s difficult to deliver the results they expect. Go beyond the basics. Understand not just their campaign goals but also their business goals.
Once you are in tune with what your client wants, you can easily connect those goals with your KPIs and build effective strategies.
3. Communicate Frequently
Communication is vital for improving client retention. After completing onboarding them, set up a dedicated communication channel – be it email, video conferencing, or messaging app – where they can reach out to the team directly.
Communication, however, is only effective when it is two-way. Other than connecting with your clients to share progress reports, use meetings to discuss objectives, be a good listener, and help them fine-tune their goals.
4. Build Personal Relationships
The kind of service you provide is a crucial element in increasing client retention. However, clients will expect much more than the quality of service; they will stick around only if they have a good relationship with an agency. If the relationship is too impersonal, clients are more likely to switch.
Focus on building strong personal relationships to retain your existing clients for the long term. Go beyond emails and conduct meetings over lunch or coffee to add a personal touch.
5. Onboard The Right Client
As important as bringing in new clients is, you must also know when to say no to a client. If the client does not seem like a good fit for your services, avoid moving ahead with the deal to keep your retention rate intact.
Some red flags to look for are:
- They have a lot of negative reviews online.
- They are not confident in your agency’s expertise.
- They have switched multiple agencies in the past.
6. Provide Additional Value
To retain your existing customers, you must provide extra value in addition to your services. Go beyond delivering results and make the clients feel you are genuinely interested in helping them. Provide them with new campaign ideas and valuable pieces of content. Introduce them to your contacts in their industry or anything that can help them in their business. Providing extra value would make it harder for your clients to replace you.
7. Reward Clients for Referrals
Referrals are a great way of bringing in new clients. But you can also use referrals as part of your strategy to retain more clients. Establish a referral program and incentivize referrals. Thank your clients who refer your agency to their network. If a referred lead converts, send your client a thank-you gift to show you value them.
8. Use Automated And Centralized Client Reporting
Is your existing client reporting system efficient and accurate? Since agencies must work on different client platforms, they have to collect data from different sources for reporting.
Without a proper solution, the reporting process is inefficient; spreadsheets and manual calculations make for cumbersome processes that are prone to error. The data and KPIs are often not enough to answer your marketing questions. Not to mention the delays in sending timely reports to clients, which negatively affects your agency’s retention rate. So, what is the solution? EasyInsights.
EasyInsights is a data intelligence company that integrates sources like Facebook Ads, Google Ads and Analytics, Shopify, and more than 50 other data channels. It brings together key metrics from different sources, blends them, and presents them into any Business Intelligence tool for easy visualization. EasyInsights also provides other marketing data enriching solutions like Server to Server Integration, Cohort Reports for strategic media planning, Automated Email Reports & any other data engineering requirements at a fraction of cost.
Yes, the hard part is over once you win a new client. But it’s not the end of the road. If you want your clients to stick around, you will have to engage with them, solve their problems, and make them feel valued.
Use EasyInsights to prepare detailed client reports and save more than 80% of your report-building time. With EasyInsights, you can make data-driven decisions, provide automated white-labeled reports to your clients, and boost retention.