You’ve likely heard that it’s less expensive to retain an existing client than it is to acquire a new one, right?
Believe it or not, it’s a pretty notable difference…
The first sale always takes more time, energy, effort, and investment. Acquiring a new client can cost up to 5X more than retaining or growing an existing one.
Plus, there’s an increased success rate of selling to a client that has previously bought from you…
A 50% increase!
So why do so many companies get so laser focused on attracting new clients that they essentially ignore their current clients?
To understand better, let’s first get crystal clear on what client value is…
Client value is the level of satisfaction your clients feel towards your business. It can be calculated in several ways, but for this particular case let’s think of it as how much are they spending with you year-over-year.
As far as cost of acquisition vs. the cost of retaining. If you’re always burning through ad revenue and other acquisition channels, it adds up.
Some of those allocated funds could go to new product development, R&D, better software, incentive bonuses, client appreciation, etc.
There are a lot of ways to spend money to grow a business. Acquiring clients is obviously a crucial one, but sometimes solely focusing on that directs money away from some other very important activities too.
I knew two partners at a bank in Tampa years ago. One of the partners was always hustling new clients. Because he was spending so much time chasing new business, many of his existing client relationships suffered, and therefore migrated elsewhere.
His partner, a veteran Entrepreneur who had actually built and exited a few companies in his life, had four main clients that he catered to EVERY week. He rarely got involved with chasing new business.
To some it would seem pretty static, but year-over-year the veteran Entrepreneur outperformed his partner just by focusing on his core clients, their investments, their needs, their portfolios, etc.
It may seem counterintuitive to think this way, but good clients that you keep delighting can help create the ultimate advantage for a business.
Let’s never forget that raving clients turn into cheerleaders.
Cheerleaders create referrals.
What is the cost of a referral?
In most cases, absolutely nothing.
Let’s also not forget what we Entrepreneurs are pretty infamous for…Shiny Object Syndrome.
My team teases me all the time when I go off on a tangent in the middle of discussing something else on our agenda…“Squirrel!” is jokingly uttered amongst my team.
Let’s face it. It can be fun to chase the next big client. It can be fun to rebrand and do interesting creative things with your business. It can be fun to be “out in front.” All those are good things (and of course should be done), but to focus on them completely and ignore other core business building principles is NOT going to get you where you REALLY want to go in your business in the time frame you want to get there.
Plus, remember, the constant “chase” can burn out your team (always chasing something “new” and never allowing them to finish what they’ve started).
Here’s another biggie…Opportunity cost. The time taken away from your existing clients…Who are primed for repeat purchases and upsells if they trust you.
All this said, there is something else that matters too.
Your Branding.
Sometimes people interchange branding for client value, but I’m here to tell you, they are VERY different.
Here’s a question…Do you solely base every one of your purchasing decisions on the item’s functional value (i.e., what can it do for you)?
Of course not.
Products and services are purchased for reasons much more complex than simply because you “need” them.
As human beings we’re more likely to make our purchase based on the emotions the product or service stirs up inside of us (i.e., what does it make me feel like)? As far as buying decisions are concerned, our logic informs, but our emotions persuade.
There are three factors that come into play when determining what products and services you purchase and who you trust to deliver them:
These are Emotional, Functional, and Social components.
Now, when you position your product or service in relation to each of these components, what you are accomplishing is what us marketers call “branding”.
Branding allows you to resonate with your target market on a much deeper level. Not only that, statistics have shown time and again that people are willing to pay more for brands they recognize and have positive feelings towards.
My team works a lot on branding with Entrepreneurs and their organizations, and I’m here to tell you what you stand for does matter. How you present your company to the world matters. How you resonate with your clients and prospective clients matters.
So ask yourself this…If you have the sleekest, most beautiful brand in the world, and you don’t take care of core client needs, how long is your business REALLY going to last?
Your branding might get them in the door, but it sure as heck won’t keep them there.
A while back, American Express found 33% of customers will consider switching companies after just one instance of poor customer service.
Your sustainable, competitive advantage is right there in your client value.
So how do you focus on client value more?
Honestly, it begins with eating your own “dog food”.
Start by going through some of your processes.
Look at your client onboarding. Look at your client journey. Look real hard at your value ladder.
Listen to how your clients are communicated to.
Send emails with surveys and get feedback.
Send some marketing assets and written communications to friends and family and get their feedback.
Does it tell a clear story? Is the CTA clear?
Does it represent you as how you want to be seen?
Working on your own process will identify where the gaps might be.
Then ask yourself if you’re creating a connection with your clients beyond just the products themselves. Would they have a reason to care about you and what it is you sell?
Are you telling them cool, interesting, relevant stories?
Are you greeting them on their birthday? (Seems small, but it can feel huge in your client’s mind).
Listen to them. Schedule 30-minute conversations with existing clients. Take the time to understand their needs. Put off some internal meetings to understand your clients better.
Don’t stop connecting with the people who have trust in you.
Do you stop focusing on branding?
NO!
Focus on both and realize there’s an interplay between them – branding helps reel them in, and their experience with you helps keep them there.
No one cares about a funny IG photo when they can’t get their core questions answered; and in this day and age of infinite competition, no one even cares tremendously about category dominance if the customer experience suffers.
Many giants have been slayed in the past 20 years in part because the upstarts found better ways to engage customers–faster and more intuitive.
How can WE help you drive client value?
We’ve worked with many clients solely on their client value efforts.
That means workflows, emails to customers, communication style, offerings, and even the hiring side of the business. Think about it. If you hire C-players, expect they will act like C-Players and treat your clients that way. If you hire the right team members, they will value your clients—creating a symbiotic ecosystem.
However, most Entrepreneurs I know aren’t very good at hiring for their businesses. They are too busy and focused on other things. Some that are forced to hire their own team members (left to their own devices), really don’t know what to look for (in some cases they don’t know who or what they really need). We can help with that too.
Both directly and indirectly, having the right team in place will not only help your company grow and scale, your client value will reach a new level.
To your success,
David
P.S. Recruitment and Hiring is the #1 Entrepreneurial Blind Spot which is why most avoid it like the plague…
Let’s face it, the entire process can be utterly frustrating & time consuming, AND often results in attracting and hiring the WRONG talent for your team and/or business.
But what if ALL the heavy-lifting was done for you, and you were only handed the highest qualified candidates that checked every box you were looking for?
Head to this link to see if Nitrogen Hiring Network™ could be your talent recruitment solution.
P.P.S. Not sure how to find and attract more of your ideal clients? If you have a proven high ticket offer, we know EXACTLY how to fill your pipeline with a constant stream of qualified and highly-motivated leads through our exclusive Leads on Demand™ program.
Simply click this link for more details.
No comments:
Post a Comment