Grow from within
Wanting to grow your business? Then stop chasing new clients and look closer to home, says Rudi Jansen
Growing your firm means more clients, right? Not necessarily…
Sure, increasing client numbers is one way to grow your firm. But this can often be costly and time-consuming, with some studies suggesting it costs up to five times more to acquire new clients than it does to retain existing ones.
Now this doesn’t mean you should stop looking for new clients. But if you want to grow your firm while increasing your client’s value and retention at the same time, then it’s worth looking a bit closer to home at your existing clients.
For example, did you know the probability of selling to an existing client is 60%–70%, whereas the probability of selling to a new prospect is only 5%–20%? And did you also know that increasing client retention by just 5% can increase profits by 25%–95%?
What this means is that focusing on your existing clients can be just as rewarding as focusing on new ones.
So here are three ways you can develop your existing clients, to make them more valuable and loyal, instead of chasing new ones:
1. Ask the right questions: Offering additional services to your existing clients is a great way to increase their value and retention. But often the difficult part isn’t offering these services, but rather knowing how to position and sell them without seeming pushy or ‘salesy’.
This is where asking the right questions comes in… Last year, one member of my coaching programme took 20 of his best clients out for lunch over a four-week period. It wasn’t an accounts meeting as such; instead he asked lots of questions about what was happening in his clients’ lives inside and outside of work. Through these conversations he uncovered over £40,000 of new fees.
When you ask the right questions, such as “what are your personal goals in the next three to five years?”, or “how much money do you need each month to live comfortably?”, you uncover new opportunities. You can then position yourself as the person to help, or alternatively, facilitate an introduction to somebody else who can.
2. Referrals increase your client’s lifetime value: Let’s say that your average client is worth £1,500 per year. If on average a client stays with you for 10 years then that client is worth £15,000.
Now let’s bring referrals in and see what impact it has. Let’s say that on average, each client refers two new clients to you, each worth £1,500. That’s £3,000 extra per year, which is another £30,000 over 10 years.
This means each client’s lifetime value is £15k (their direct fees) + £30k (their referred fees) = £45k per client.
So what can you do to systemise your referrals process further to drive this up? Here are a few ideas:
• Include asking for referrals at the bottom of all meeting agendas.
• Include it in email footers and other client facing documentation.
• Consider an incentive scheme for clients that refer to you.
Once you start actively tracking and setting targets for referrals in your firm, you’ll be surprised at the results you get.
3. Deliver a complete client experience: Most people think that a client’s experience of their firm starts when they sign up. This isn’t true. A client’s first experience of you starts on their very first interaction. That could be visiting your website or meeting you at a networking event. And from this there will no doubt be many more interactions before they eventually become clients.
Delivering a complete client experience means focusing on improving all of the interactions your clients have with you, from prospect through to client. This in turn can help to improve their retention and their willingness to refer.
For example, how can you improve the onboarding process your new clients go through? What tech could you use to improve the way they supply info to you? Alternatively, how can you improve the sales process your prospects go through to become a client?
By improving each of these interactions by just a few percent you can dramatically improve their overall experience and their retention.
A shift in focus?
As you can see, focusing your time and energy into your existing clients can be just as beneficial as chasing new clients.
By asking the right questions, generating additional referrals and delivering a complete client experience you not only increase your client’s value and retention, but also grow your firm in the process. Could a shift in focus be what you need to kickstart your growth? Try it and find out…
• Rudi Jansen is a coach, author, speaker and practice owner. Email firstname.lastname@example.org or call 01246 386 133.
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