Retention Rates measuring, even for when things do not go as well
Flying back from a full day of discovery with a new customer (#backtofacetofacemeetings).
My mind is buzzing. Thinking about the day, the information, and how best to approach next steps. One of the main goals for this client is higher Retention Rates. (“Heard your Emotional Relevance does wonders when it comes to relationships with clients” is what he told me when we first talked).
After the pleasantries and the 25-cent tour of his offices, we sat down to break things down. When we got to client retention, I asked a question where I often find myself surprised by the answer. How do you measure your client retention rates?
Most clients I’ve worked with respond with something like – well, it’s simple – it’s how long they’ve been a customer. And yes, some, of course, measure churn and some have done satisfaction surveys of some sort (such as NPS), but…
In today’s world of experience VS service, of knowing the person you work with VS just catering to their corporate needs. In a world where we communicate through our kitchens and our bedrooms with clients on a day-to-day basis when we are online, and when a more personal and emotional relationship is acceptable in the corporate arena. In this kind of a world, it’s not enough to look at retention only through how long they’ve been a customer.
Thus, first and foremost, if you are not measuring your clients’ retention (yes, I know you are out there)…start. Here is an interesting article talking about 7 key customer retention metrics and here are some elements I recommend you mix into your retention rate calculations on top of just how long they are a client of yours:
How important is it to have their logo on your portfolio? Obviously, they need to agree with it but assuming they do agree, it is not just to place their logo on your site/presentations etc. It is really around how deep this partnership is, beyond just a client. Are they willing to tell the world they are working with you? Are they willing to share case studies and ROI, participate in conferences on your behalf? Are they OK with mutual PR? Are they willing to accept calls as a reference? This element of the retention rate is also an ongoing effort and could have a big impact on the overall ROI from this client.
Do you have c-level relationship with this customer? You need to think long-term. You want to have a c-level relationship (and when I say you, it does not necessarily mean you, the account manager or the customer success manager but rather you, the business). It could very well be that your CEO is the one better fit for the c-level executive relationship, and you will need to manage that aspect of the client relationship as well. This is where elements of Emotional Relevance are critical. And for those of you who have been following, how about corporate Emotional Relevance? You will need to get personal and open with your main contact in order to get to the c-level with your client. You will need to build the trust to a level where your client trusts you enough to be on those panels side-by-side with you. Create a contact matrix of sort where you can map all of the relevant points of contact on the client’s side, list their details, how often you should be communicating with them, through which channel and lastly, who from your organization should have a relationship with them. This should be your ongoing strategic relationship mapping. Needs project management skills to manage and a powerful tool.
"We see our customers as invited guests to a party, and we are the hosts. It's our job every day to make every important aspect of the customer experience a little better." Jeff Bezos
The key here is measuring the investment. How many people are involved in this relationship from your end? What percentage of FTE (Full Time Employee) does it translate to? The fact that your Account Manager or Customer Success Manager oversees a book of business of say…15 accounts, it does not mean they (the AM/CSM) are the only person from your end that spends time with this client. How much technical support does this client require? How much executive attention are you giving them? Has this client been requesting some product enhancements which require time and effort from your development and product teams? Now, take all this and compare it with the other elements I am listing here, and that should give you the ROI you are looking for.
Potential Growth (upsell and cross-sell opportunities)
Here you want to look at which of your products/services your clients are using and just as importantly, how are they using it. Potential growth should be examined through the level of utilization of the already purchased product/service and how much potential growth is there with the same product/service (upsell). It also should be looked at through potential additional services and products you may be able to offer this client and increased not only the revenue but also their “services basket” (cross-sell). The other day, after we discussed cross-selling opportunities, a client stated: “but we do not really have other services nor products to offer this client”. So, here is a small bubble burst – when you cross-sell, it does not have to be ONLY products or services you directly offer! If you did your job right and got to be emotionally relevant with this client, you should know their world of needs and aspirations better and could be of service and value elsewhere. And no, before you say what you want to say, no - you should not get into another line of business but…. connect them with someone else who can fulfill their needs. Perhaps a partner of yours, a friend, or maybe even another client.
Often, for my own clients, I offer a sort of a monthly get-together. Get a group of clients who share something in common (vertical, pain point, business challenge etc.) together on an ongoing basis, create a sense of community, provide added value in the sense of subject matter experts and after a while you will see how your clients start interacting and add value to one another. But since you were the one facilitating it, you are the one who adds value and be there when new potential cross-sell opportunities arise.
In today’s world where having a good product is merely enough to retain a client, you simply have to constantly be proactive and be there.
Now take these elements and add the personal aspect to it, add Emotional Relevance to it and of course, a good product and your relationships and retention rates with your clients will continue to flourish. Even when things don’t go as well.