Logo Andy Sokol
The ROI of Client Retention

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.