Customer Retention Strategies for Small Business Owners & Agencies
Agency and small business owners benefit greatly from customer retention instead of focusing on attracting new clients. Let’s look at a few customer retention strategies anyone can put into practice today.
But first, why is it so important to keep your loyal customer close to you, and what are the reasons for losing customers? Simple: just a five percent increase in client retention has the potential to boost company revenue between 25 and 95%.
Studies have shown that it’s also much more expensive to find new clients than to invest into retaining existing ones. The US Small Business Administration suggests that companies with a revenue below $5 million per year should spend between seven and eight percent of their revenue on marketing. Most of that budget will be used for customer acquisition.
Let’s say you spend $1,000 on marketing which results in two new clients. The customer acquisition cost (CAC) would be $500. Depending on the service or product you’re selling, it might take you some time to break even on that cost before you make a profit.
Instead of spending $500 on new customers, you could’ve used $100 to reduce the yearly recurring service subscription of a churning customer, and be left with a $400 profit. As you can see, the return on investment (ROI) isn’t always great when you acquire new customers.
With that said, let’s look at customer retention strategies that you could put into place in your agency.
10 customer retention strategies available to you
What exactly defines a customer retention strategy? Simply said, it’s one or a set of initiatives that have the potential to increase your customer lifetime value, and prevent churn.
These strategies can be used at any point in the customer lifecycle to build a long-lasting relationship, starting with the day they purchase one of your productized services until right before their annual subscription renews.
Some client retention strategies can be automated, others need active involvement from your team. Here’s a list of the strategies we’ll talk about in more detail.
Customer experience & service
Now, let’s get into each part in detail.
With a great client onboarding strategy you can help your customers wrap their heads around your services in a matter of minutes instead of days. For many agency owners, the best solution is to hop on a call with every new client. While this strategy is personal, it also requires a lot of work and doesn’t scale well.
Instead, you could:
send your clients a welcome email with next steps
put them into a drip campaign and send them an email sequence
send them a link to your help center or serve via virtual call center
It allows you to embed a welcome video your clients can watch, link to helpful resources, and best of all, it’s always available a click away. If your clients need to review information, they can just navigate back to the onboarding form.
Customer experience & service
Excellent customer service goes a long way, although it’s hard to track how much it improves the customer retention rate. One thing is clear: if your team is doing a stellar job by answering questions in a timely manner, and going above and beyond for your customers, they’ll appreciate it.
Here are a few things to ensure that your agency provides great customer service:
own your mistakes and take responsibility for mistakes
be consistent with your services and delivery times
don’t make promises you cannot keep
try to respond as quickly as possible
If you combine your customer service with amazing customer success, you have even better chances to wow your clients. The customer success team should your clients by heart, anticipate their needs, and help them reach their business goals.
For agency owners, the success team also presents the opportunity to upsell clients and increase the company revenue. More on that later though.
Customer service and self-service go hand-in-hand. While clients love it when a real person responds to their questions, some things can be resolved without any human intervention.
In the productized business world, many clients know what they need, so they’d like to:
send new requests and tasks whenever they want to,
be able to manage their subscription, and
change their payment method at will.
With SPP, you can encourage customers to manage their subscription on their own. This takes some of your responsibilities away while increasing the customer retention. Think about it: if a client wants to upgrade to a more expensive plan, they don’t even need to reach out–they can just do it themselves.
Being on a first name basis with your clients is not enough when it comes to personalization. The longer a client is subscribed to your service, the more you know about them.
A great way to achieve this is by personalizing the experience. According to a study published by Statista, 90% of consumers don’t appreciate irrelevant brand messaging.
One of the main reasons customers turn to small businesses is due to the fact that those offer a more personal touch. Funnel your client base into a CRM that you keep up-to-date with every little detail, from purchases to interactions with your emails.
A simple personalization strategy any agency owner can use is to rely on your CRM data to send a coupon for birthdays.
Customer feedback is important if you want to retain them for a long time. Doing surveys is a great way to hear from a select group of customers. You can either talk to them on a call, and write down their thoughts, or automate surveys.
With a modern client portal such as Service Provider Pro, you can let your customers rate both your orders and tickets. In the end, ratings are just that, a number. It might not be enough to accurately judge why an order/ticket has been rated the way it was.
Luckily, with the power of automations, you can ask for more detailed feedback. For instance, I explain in a LinkedIn video how to:
set up an order.rated or ticket.rated webhook
use Make.com to check if the rating is bigger than 3
then send an order message via API asking for more information
With this automation you can engage with happy customers, get their feedback, and understand their point of view. Ideally, you’d also set up a similar automation for lower ratings to find out why a client wasn’t happy.
There are clients who never mention they weren’t a fan of your services (a.k.a. the silent treatment), others are very vocal. You should learn to appreciate the latter because they give you the opportunity to do better. The former, however, walk away, and might never return.
The reason for not filing a complaint can be variable. Sometimes customers don’t know how or they think it wouldn’t make a difference. Make sure that your clients know that you’re always receptive to feedback, be it positive or negative.
It could be a simple contact form in the form of a chat bubble that allows them to send feedback without too much hassle. Or an email that simply asks about feedback–nothing more, nothing less. Use the complaints to improve your service, and show your customers how much you care, and that you want to retain them.
Many successful small business owners have grown without throwing money into marketing strategies. The only one they deemed necessary was word-of-mouth in combination with a little gift in return, also known as a referral program.
What better way to advertise your business than by using happy clients who do the work for you? In return, you can give them discounts for your services, or a commission. If you don’t want to handle complicated payouts or deal with coupons, in SPP you can simply top up their account balance. This allows your customers to spend their commissions on your services–a win-win-situation.
If you’re afraid that your referral program could be abused, start it off slowly. Limit it to big clients who’ve been with you for a while. You can also limit the referral program and make it invitation only. You’d have to approve each affiliate manually, which might limit the reach of the referral program.
I’m sure you’ve seen testimonials on agency websites praising how clients loved working with the company. Leverage the power of social proof by embedding client testimonials on:
your order forms, and
on social media.
Social proof is incredibly important on order forms as it can increase the conversion rate during checkouts. We’ve put together a tutorial how you can embed testimonials easily here.
If you’re lucky, you don’t even need to ask for testimonials. Some clients are very vocal on Twitter and other social channels. Simply grab a screenshot of their testimonial, and use it on your website.
It’s still a nice gesture to ask if they can be quoted though!
Educated customers are happy, require less hand-holding, and might spend more money on your services. How do you educate them though?
Here are a few ideas:
Create an onboarding page inside your client portal that contains a demo video and tips to get started.
Fill the welcome email you send out with useful information and next steps so clients know what to expect.
Put your new clients into a nurture email funnel were you send them helpful tips and tricks.
What about calls, you ask? The productized model doesn’t really leave a lot of room for calls because they are often not the best use of your time (or that of your clients). That being said, you can still hop on an introduction call with high-value clients who subscribe to your most expensive yearly plans. It really pays to get personal with them.
Talking to high-value clients on a call might be the perfect opportunity to find out about their wants and needs, and upsell them on your services. A lot of agencies run on a “show little, upsell later” model. Their website only gives you a peak into their service offering. The upselling starts once a customer purchases the first service.
If you’re not into doing calls, you can also upsell after checkout right away based on the service purchased. Here’s a tutorial on how you can set up an upsell form inside SPP.
Grow your industry knowledge
5 ways SPP can help you retain customers
I’ve already mentioned SPP a few times above, but let’s look at a few concrete examples how our tool can help you implement client retention strategies for small business owners.
1. Make all messages accessible in one place
The SPP Client Portal changes the way your team and your clients communicate. The back and forth across multiple email threads is tiring. SPP’s client portal keeps everything as accessible as you want to make it.
Clients can respond to messages in the client portal or via email. Any time you or your team posts a message in a client’s order, the client receives a notification in the client portal and in their email account.
Rather than having dozens of separate email threads for each project, their response shows up in their order any time a client replies to a message. This bypasses any confusion during communication and gives you clear history of who said what and when.
No longer will your customers be annoyed because you missed their email, and cancel their subscription with you.
2. Subscribe customers to a mailing list
As already mentioned, attracting new customers costs more than retaining current customers. So it makes sense that you need a retention-boosting way to remain in contact with your clients. Here’s where retention email marketing comes into play.
At SPP, we make it easy to tag and subscribe your customers to a mailing list in MailChimp or ActiveCampaign. This allows you to re-engage them via email, help them get the most value from your services, and send occasional updates or newsletters about your services.
Whether you send clients monthly updates on your services or generally useful content, it keeps them engaged with your business. Ultimately, this translates to an increase in retention as your business stays fresh in your clients’ minds.
3. Send checkout abandonment emails
Sometimes, people abandon your order form during checkout; maybe their card failed, or maybe they got distracted–it happens to everyone. The percentage of abandoned carts is usually between 50% and 80%. However, it’s possible to reach out to those customers and reclaim the lost sales.
With SPP, we help you automatically send a strategic recovery email that brings clients back right where they left off and gives them an easy option to finalize checkout.
This alone can save your agency hundreds, even thousands of dollars per month.
4. Send business updates
Whether you have something exciting happening this month or are adding something new for your subscribers, you’ll have to keep them in the loop to keep them interested in your business. However, you can also send updates to upsell clients to the next tier in your subscription offerings.
For example, if the three tiers of your subscription services are Textual Content Creation, Textual & Graphic Content Creation, and Textual, Graphic, & Video Content Creation, you can set a campaign to upsell current subscription clients.
Don’t forget to ask customers when they create an account if they’d like to opt-in before you send any marketing related emails. We have a handy opt-in field item for order forms.
5. Reach out to your best users
SPP also has a reports feature that enables you to determine who your best customers are, this month, this year or throughout all time. Since these clients are already loyal, they’re likely willing to make additional purchases or recommend you to their network.
While you may be tempted to use automation here, these high-value clients will respond much better to a personal message from the founder or their account manager.
This increases customer loyalty and keeps them interested in your agency.
Staying connected is key
Whether you’re looking to increase customer satisfaction and retention, or just wanting to avoid issues stemming from missed emails, it’s more important than ever to stay connected with your clients.
Customers should know that you care about earning their business time and time again. It’s not enough to say you care; you have to show them through your actions to retain them.
With the customer retention strategies mentioned in this blog post, you should have everything you need to grow your business, and keep your churn rate low.