Neil Sedaka warned us that breaking up is hard to do. This transcends the connection between two individuals connected by the almighty power of love. Whether it is friends, partners, vendors or clients, breakups are never easy, especially when you get the dreaded "It's not you, it's me." Breaking up with clients when it's not your choice can be crushing to both your ego and your bottom line.
While some breakups may be inevitable, many can be prevented by changing your approach. Of course, you've heard that before. Current strategies for customer retention and client relationship management are not dissimilar to the kinds of techniques hopeless romantics employ. You're told to delight your customers. To remind them why they chose you in the first place. To employ social media and other tools at your disposal to show the world (and them) how much you love them.
This is not to say that such approaches don't work, but sometimes, actions are called for more than words.
A Major Obstacle for CAM Management
Management companies have cited client retention as a major obstacle standing in the way of their optimal performance. And the data backs them up. Forrester Research has estimated that companies will have to spend about five times as much on new customer acquisition compared to the amount necessary to retain existing clients. And according to another study, businesses can bolster profit margins by between 25 and 125 percent when reducing customer turnover by just 5 percent.
Why The Board Wants to Go
The first thing you should identify is why the board is looking to leave you in the first place. It's easy to blame a former employee for 'stealing' clients out from under your nose, but the truth of the matter is, the board is probably already dissatisfied if they are thinking of leaving.
Identifying Your Retention Rate
If you're ready to bolster your profits through retention, the first thing you should do is find out what your customer retention rate is. Check out this formula provided by Inc. Magazine contributor Jeff Haden.
The rate is just the beginning. Getting the context to determine whether you are in a good position is a bit more complicated and specific to your business. But by starting with your specific retention rate, you should be able to measure your progress and setbacks over time.
Now that you are tracking your rate, you can begin to employ simple strategies to nudge the needle more into the positive direction.
- Service: Your battle will be won or lost on the front lines, and ensuring that the employees who interact with clientele the most are prepared to do so successfully is paramount. Consider increasing the amount of customer service training all your client-facing staff receive to optimize interaction management more proactively.
- Technology: Software that helps you manage your customer relationships is key to a successful retention strategy. You need to be able to track interactions with your clients to be able to see what's working and what isn't. Invest in smart technology solutions to ensure that you and your staff have all of the tools and support necessary to consistently and progressively manage your customer relationships.
- Agility: Make sure you are customizing your approach whenever possible. As competition heats up, your clients become more demanding. The organizations that are able to adapt to changing circumstances will be the ones that come out on top.
Simply put, there is no cookie-cutter approach to client retention management that will work perfectly for all companies. Agility and alignment with your core objectives and missions is critical to your success. With the right approach to client retention, your CAM business can excel in the increasingly competitive marketplace of today and the future.
Free Sample Management Transition Checklist
We don't want to break up. But remember that there is always the possibility the community will want to get back together with you in the future. Don't burn your bridges, use this Management Transition Checklist to ensure as smooth a transition as possible. At the bare minimum you get good kharma by doing the decent thing. And just maybe, you can 'retain' that client after the fact.
*Image credit: Trent Smith via Flickr