Logo Andy Sokol
Four Categories for Client Retention

You know it takes a lot of touches to remain on top of mind with your prospects and your clients. In fact, the average prospect will not do business with you until they have seen or heard from you at least seven times. That’s a pretty common statistical fact that’s been around for ages.

 

But to do this right, you need to be a card sending machine. That’s right a card sending machine!

 

#1. You need to have a large enough network of people who know who you are and know what you do.  

 

#2. You need to have a large enough network of people who like you and trust you. The deeper the relationships you build within your network, the more business you will receive.  

 

#3. To develop a relationship of trust with a large number of people, you need a system for managing those relationships. The system needs to be predictable, consistent and repeatable.   

 

This last tenant is crucial for seeing results from your client retention efforts. You must stay in touch regularly. You must be consistent. As a static business owner, you know that you cannot simply do anything one time or once in a while in your business and expect to see any major results.  

 

For your client retention efforts, the most ideal way to stay on top of mind is to create card campaigns and to create a schedule to send them.

Mary Kay Ash

 

Who’s heard of Mary Kay Ash? Well, she’s the founder of Mary Kay Cosmetics. Mary Kay said that her key to success was to make your people feel important. She taught her sales reps to send three handwritten thank you notes every night before bed.

 

Today, Mary Kay Cosmetics has more than 3 million consultants in over 37 countries worldwide, and has wholesale volume in excess of 3 billion, with a B, dollars. Now that’s a beautiful business.     

 

Harvey Mackay

 

He’s a business person, author, and syndicated columnist. Harvey became the top salesperson for an envelope company and used his commissions to purchase an insolvent envelope  manufacturer with 12 employees in 1959.

 

Today, his company, Mackay Mitchell Envelope Company, employees roughly 500 employees, produces 25 million envelopes a day, and has sales of approximately 100 million. Harvey is well known for his book Swim with the Sharks, in addition to many others.

 

He says, “Short, handwritten cards yield long results. In sales, never underestimate the importance of the personal gesture. Right at the top of the list of effective personal gestures sits the handwritten card. Always send memorable cards and personal notes when you are reminded of a person.”    

 

Bob Burg

 

He’s an international best‐selling author on entrepreneurship and creating powerful business relationships. Bob is the author of a number of books on sales, marketing, and influence with total book sales of well over a million copies. He’s best known for his book Endless Referrals. He speaks to Fortune 500 companies, franchises, and numerous direct sales organizations around the world.

 

The American Management Association named Bob one of top 30 leaders in business. He was named one of the top 200 most influential authors in the world by Richtopia.

 

He says, “Thank you cards are one of the most powerful tools in building a huge network, both professionally and socially. People with the most impressive networks are typically avid card writers. It’s one of the best techniques for long‐term winning without intimidation. I suggest getting into the habit of immediately sending out cards.”    

 

Danielle Kennedy

 

She’s a real estate legend. By the fourth year of her career, she closed on 105 homes while raising a family of five children. She says, “Write customers personal, handwritten cards frequently. If you run into an old customer anywhere, follow up with a handwritten card.”

 

In this electronic communication age of email, the handwritten card with the postage stamp gets more immediate attention than ever.

Let’s talk about the best of the best of client retention. We’re going to talk about Joe Girard, the world’s greatest salesman.

 

Joe Girard

 

Let’s start off with Joe Girard. Joe Girard sold 13,001 cars at a Chevrolet dealership between 1963 and 1978. Now that may sound like a long time ago, but it doesn’t matter because he wasn’t using any kind of technology like they have today. He’s been recognized by the Guinness Book of World Records as the world’s greatest, number one retail salesman.

 

He sold more retail big ticket items one at a time than any other sales person in any retail industry including houses, boats, motor homes, insurance, automobiles… That’s an average of six cars per day all at retail. He did not have fleet sales. He did not sell multiple cars to one customer at a business. It was all individual sales.   

 

Joe Girard was a high school dropout. He held a lot of odd jobs until he was 35 years old when he walked into a Detroit car dealership and begged a skeptical manager for a job as a salesman. He sold a car on his very first day. And by the second month, was so good that some of the other salesmen complained about him and got him fired. He then went to another car dealership down the street and set consecutive sales records over a 15 year period.   

 

What was his secret? He built and maintained relationships by staying in front of all his previous and current customers. Joe sent 13 heartfelt cards to each of his prospects and clients every year. That was thousands per month. These cards let his prospects and customers know that he cared and that he was thinking of them.   

 

Because he was keeping in touch, when somebody needed a new car, Joe was the only person that came to the top of their mind. Joe did not limit himself to thank you cards. He sent all kinds of cards including thank you notes, cards of encouragement, cards of congratulations like a wedding or new baby or job promotion, birthday cards, holiday cards, seasons greetings, Valentines, etc. Plus, helpful news and information. And he sent small gifts to his best customers and referral partners.   

 

Since no automated system was available at the time, Joe hired three full‐ time employees to buy his cards and handwrite messages for him. No wonder why Joe was the number one salesman in the world. Fortunately for us, there are systems available now.   

 

He has a great quote. It says, “Time and money well spent will build your business tremendously. Always look for new and better ways to do it.”   

 

So let’s talk about the reasons that customers leave…

 

    • 1% pass away
    • 3% move away   
    • 14% are lured by a competitor   
    • 14% are turned away by product or service dissatisfaction   
    • 68% leave because of experiencing a poor attitude or perceived feeling of indifference.

 

Those last three reasons alone represent 95% of the customers who leave your business and they are all avoidable reasons. Just imagine if you were able to count on repeat orders from 95% of your clients, what a difference that would make in your business and your bottom line.

 

Of course, you may not be able to keep all of those 95%. Some folks are never satisfied and others refuse to believe that you are ever giving them a fair deal, that’s fine. Those are not the type of clients you want anyway.     

 

But look at that bottom number, this is the number that represents the number one reason that clients leave, experiencing a poor attitude or perceived feeling of indifference. They are literally leaving because they think that you don’t care. They don’t think that you’ll notice. They don’t think you’ll do anything about it and are they right?  

 

This number represents a totally and 100% avoidable reason for losing clients. It’s just completely unnecessary.

In order to build a true rapport with your customers, you need to use their name in whatever you send them. Don’t be the guy that sends an unsigned card with a business card in it. This is the personal touch that needs to happen for that innate human connection to take place.

 

This is where the know and the like start to happen before they trust you enough to buy from you. The best part of all is this is extraordinarily easy to do. Because it is so rarely done, it really tends to make a lasting impression. The best way to do this is to send a personalized greeting card.   

 

Here are some opportunities to be remembered as someone who makes others feel valued:

  • “Just  because”, on their birthday, an anniversary like for example a wedding anniversary or an annual renewal of their contract or closing of real estate.
  • How about congratulations? Maybe they had a baby. Maybe they got engaged. Maybe they had a wedding.
  • Thank you. Thank you for your business. Thank you for the referral. Thank you for the gift. Thank you for taking us out to dinner.
  • A sympathy card. If something happens in their life that’s a tragedy, send them a sympathy card.
  • An apology card ‐ maybe something didn’t work out just right. Send them an apology card.
  • Holiday cards. There are a ton of holidays: Christmas time, New Year’s, 4th of July, Thanksgiving. There are so many holidays that people just love to get those types of cards.  

 

There’s a famous quote by Maya Angelou and it says, “People will forget what you said. People will forget what you did but people will never forget how you made them feel.” This is really what this is all about.

 

How do people feel when they know that you care about them? It’s vitally important to remember do not mix these with marketing. Do not send a business card inside a card telling them congratulations on their wedding. Do not put your business card inside a greeting card that says, “Congratulations. You’re having a baby.” That does not work. Do not do that.  

One of the best ways to get more business out of your clients is to ask for more business instead of waiting for them to buy. You can send notices about other products and services you offer that your customers may not even know about. Maybe they already know about your other products or services, but you  don’t want them to forget about them when they need something other than what they normally buy from you.

 

According to the statistics, 62% your customers are not taking advantage of all the products or services you offer. If you’re not engaging your customers on a regular basis, and staying at the top of their mind, you’re leaving a lot of money on the table. This is how you increase your revenue without finding new customers.     

 

This is also a great way to increase referrals, especially for your best clients. We’re going to talk more about exactly how to do this later, without begging for referrals and being embarrassed when you don’t get them. For now, just keep in mind that this is the entry point to getting more sales and increasing referrals.     

 

So, stay top‐of‐mind to keep your customers and increase their sales from you over time.

We’re all different in how we think because our brains are wired differently. We also have many different values and beliefs based on who we are, how we were raised and what we have learned in our life experiences.

 

There’s no way for us to perfectly align with every customer in building a relationship because all of our clients are different. It’s not possible, and that’s okay. Instead, and most importantly, what we can do is focus on the part that we’re already aligned in and what makes us all the same. Here’s the answer: Everybody has a natural human desire to be loved and appreciated ‐ everybody.  

 

This is a basic need that every single person on the planet has. Appreciating our customers and making them feel important is what they all want. Give it to them or they will look elsewhere.

 

We have many opportunities to communicate appreciation to our customers. We can build friendships by thanking them and giving them gratitude. We can wish them a happy birthday and give best wishes at various other holidays throughout the year. We could recognize them for their accomplishments and celebrate changes in their life, such as getting married or having a baby.   

 

Only after all that can we send them information on some of the things that we’re doing as a way of keeping in touch. This is the 80% relationship building part of the equation. Don’t be afraid to send cards to the leader personality type, by the way. I used to be afraid of that, myself, and I thought that was kind of  goofy, but let me tell you something, everybody does have the natural human desire to be loved and appreciated. The leader personalities want to be appreciated, as well, so don’t be afraid to send it to them.

 

Now, marketing and promotional materials can be sent, as well.  Remember to abide by the 80/20 rule. 80% has to be on the relationship building part, and 20% marketing. It’s critically important to remember that sending marketing material can only be done 20% of the time and it’s got to be spaced out a little bit every so often, otherwise, the customer won’t trust you as  being authentic in wanting to build the relationship with them. And if they don’t  trust you, they won’t buy.   

 

Most people think, “What’s in it for me?” An important thing to remember is how people feel with dealing with the typical sales person, their mind automatically goes into a defensive mode. All they’re thinking about is, “What are you going to do to me as opposed to what are you going to do for me?” They’re on guard and really only want to know, “What’s in it for me?” It’s crucial that your communication needs to be about them most of the time and only about you some of the time.   

To better understand your client, which will help you build a better relationship with them, it’s important to know that there are four basic personality types that people fall into.

 

They’re called many different things depending on which personality assessment program you’re talking about, however, they all break down into four main categories:

  • The leaders
  • The networkers
  • The supporters
  • The thinkers

 

Everybody has a mixture of each one of the four basic personality types, but we all have a tendency to have a strong dominance in just one of those types.

 

The leaders are very strong. They’re decisive. They’re independent risk‐ takers, and they like to take charge. Their personality is sometimes demanding. These personality types are generally a CEO of a successful company. About 10 percent of the US population fits in this profile. You probably fall into this category.  

 

The networkers are all about being social and having fun. They are the life of the party, and want all of the attention. These personality types are generally salespeople, actors, and musicians. About 35 percent of the US population fits in this profile.  

 

The supporters are low‐keyed, patient, and compassionate people. They care more about everybody else than themselves, and do not like conflict. These personality types are generally nurses, teachers, and customer service representatives. About 40 percent of the US population fits in this profile.  

 

And the fourth type, the thinkers, are very analytical and serious. They’re usually perfectionists, are detail‐oriented, and use logic to make decisions. They spend more time organizing and analyzing than any other personality type. They’re typically engineers and accountants. About 15 percent of the US population fits in this profile.  

We’ve been talking a lot about clients ‐ what they’re worth and how to keep them as your client. That’s because it’s very expensive to lose a client. It’s extremely important to your bottom line.

This has everything to do with your business, your profitability, and even your ability to build equity and eventually sell your business. This goes way beyond missing a few orders.

So let’s review the numbers…

A 5% improvement in customer retention equals a 25% to 85% improvement in profitability. Just a 5% improvement in customer retention. It’s amazing.

95% of your happy customers will purchase from a competitor on an impulse. For each month that you don’t communicate with your clients, you’ll lose 10% of your influence, and the number one reason a client does not come back: they forgot about you.   

You must differentiate yourself by showing people how much you care, or customers consider your product or service a replaceable commodity. Once they do that, it’s a downward spiral that you can’t win. They feel the only way to compare between your company and your competition is all about which option is cheaper.

There’s a famous quote by Zig Ziglar, and it says, “People don’t care how much you know until they know how much you care about them.” And it’s very, very true.

By retaining your customers longer due to your nurturing of them, and not only concentrating on getting your next new customer, you’re able to build a steadily growing book of business over time. It’s hard to grow without repeat customers as your base.

The goal here is to make your customers so in love with you and with your company that they wouldn’t even dream of calling somebody else or referring their friends and family to somebody else. This is the definition of a raving fan.

Remember, the more your clients feel appreciated and special, as if they were your only customer, the longer they will stay and be loyal as your customer. They will have no reason to start searching for one of your competitors unless your company does something very wrong.

Even at that, long‐term customers will tolerate a problem once in a while, because they base their relationship with you on your long track record of taking great care of them. There are many ways to communicate with your clients to show appreciation: You can call them, you can text them if you have their cell number, you can send out an email blast, you can visit them in person…

However, each of  these methods has inherent problems. So, for example, by visiting them in  person, you may not reach them on the first try and waste a lot of time coming back several times to try and catch them. Once you do, it may be awkward, because they don’t understand why you stopped by so many times and what the urgency was.  

If you try to call them on the phone instead and they don’t answer, you don’t have the time to repeat that several times. Leaving a message just isn’t the same. If you want to text them, you may not have everyone’s cell phone number, and you may not want them having your cell phone number. Sending an email is just too impersonal, if it even gets read. The same goes for sending a newsletter.

Again, some or all of this can seem awkward to a client and can actually become a negative that is working against you in trying to build a relationship with them.

The best thing to do, which hardly anybody does, is to send them a heartfelt card of appreciation.

The key here is to send a “thank you for your business” card in the mail. Yes, regular mail with a stamp that has no advertising on it from you whatsoever. The thank you must be authentic. It must not seem that you have an ulterior motive. The kiss of death, which may turn an A customer into a D customer instantly, is to enclose your business card inside of that greeting card.

I personally received a holiday card recently from somebody that I did business with earlier this year. They didn’t sign it. All they did was put their business card inside. It made me feel that they didn’t really care about me or any of their clients, and that they were just mailing them out because they felt they had to.

If you were to send a sincere and authentic thank you card individually addressed to your customer, just because, they’d be blown away. Have you ever received a card like that from somebody that you’ve done business with? Probably not, and if you did, it was probably not more than once or twice ever. If you did receive a card like that, how did it make you feel? If you didn’t, how do you think it would make you feel?  

This is how we start the appreciation process and build the relationship. In relationship marketing, there’s an 80/20 rule as well. The core principle is to focus on building the relationship 80% of time and marketing only 20% of the time.

By sending a simple “thank you for your business” card, this is the beginning to building that relationship with your client. This is the start of a human‐to‐human connection that most people in business seem to miss and most customers crave.  

These are not new concepts; however, what is new and fresh about it is that your competitors are probably not doing it. Your customers will really appreciate it. This is the very real, very tangible ROI of retention.

Step one, identify your top 2% clients

Who is your best, most ideal client? How often do they order? How long do they stay clients? How much is  their average order? These are going to be your “A” clients. Identify them, monitor them, and above all, nurture them.    

 

Step two, find the rest of the top 20%

These are going to be your “B”  clients. They are also very important to identify. You’ll want to take great care of  them in a concentrated way. These two categories, the A and the B categories, represent 80% of your revenue. It’s worth investing and earning their repeat  business. You must stay as top of mind on a consistent basis as you can, or you’re priming them to go to your competitor. You do not want your top 20% clients  going to your competitors.

 

Step three, who’s the other 80%?

These are going to be your “C”  clients. The C client is the rest of your regular customer base. These clients represent the other 80% of your base, and the remaining 20% of your regular  revenue. Now, you don’t need to break the bank getting them to place another order. It’s important to know that these customers also need to feel the love and attention. It’s vital that you don’t take them for granted.

 

So even though we’ve  covered 100% of your customer base we have one more category, the “D” client  list.

 

Step four, you need to make a D client

The D, or dormant clients, are those who have not bought from you for too long, or for whatever reason. Of course, the average length of time in the customer’s buying cycle is determined  by your industry, so you need to take that into consideration. Unless you know and understand who your lost customers are you can’t even begin to figure out why they left and how to get them back. It’s extremely important to know which clients fall in this category.    

 

Once you segment your clients into these four categories, the A’s, the  B’s, the C’s, and the D customers, you can then focus on taking better care of your best customers, turn your average customers into your new best customers, and rejuvenate your lost D customers, and hopefully convert them into at least a C current client.   

 

The reason for segregating your contact list is to organize how you’re going to show the love. Depending on the level of customer that you’re working with, the messaging of appreciation going forward needs to be slightly different. You can’t use the same messaging for everyone because one size doesn’t fit all in building relationships.