by Kenneth Tichacek, PSMJ Resources Consultant – Only a fool might say it’s not important to hang onto your best current clients for dear life. In most firms, repeat clients account for 70 to 80 percent of annual net revenue. It’s not easy or fun to replace them. Most studies suggest it costs seven times as much to find new clients than it does to simply hold onto the ones you have.
So, why do these essential clients jump ship so often? Most folks think the best way to keep clients is to simply perform exceptionally well for them. That’s important, of course, but it’s not enough. Good performance generates satisfied customers, nut not necessarily loyal ones. Other folks cite the intense price competition we all face these days as the main reason they’re losing clients. Sure, but only sometimes.
Over the course of many years, PSMJ Resources, Inc. surveys have shown again and again that THE main reason clients defect isn’t performance or price. It is something else entirely:
* Desire for new business relationships: Account for 5% of defections
* Price: 9%
* Dissatisfaction with service: 14%
* Indifferent supplier: 68%
* Other: 4%
These data clearly demonstrate that even if a client is completely satisfied with your performance, they may still defect unless you say “I love you, man” often enough. Doesn’t that just blow you away? It took me a long time to accept that even clients who select professional service firms to perform multi-million dollar contracts still want you to scratch their back once in a while or they will find someone else to do it.
So, show them you care. Develop a specific plan for the care and feeding of all your best clients. Be attentive to their needs before, during, and after projects. Learn to understand their business better than you understand your own kids. Talk to them. Listen to them. Finally, it is vitally important for you to go visit them between jobs. Sometimes, when I am planning to call or visit a client, a little voice whispers “She’s too busy.” Don’t listen to that voice. As the PSMJ data suggests, she very much wants to hear from you.
All you have to do is remember this simple calculation:
Attentiveness = Loyal Clients = Lots of Work You Don’t Have to Spend a Lot of Money to Get = Profitability.