Focusing on retaining clients is not about increasing the retention rate, it’s about making memorable experiences with existing clients so they buy more from you and refer more to you.
As a measure of great retention, you should be aiming for an actual retention rate of 95%, at least one referral per client per year, and at least four projects per client purchased each year.
Let’s explore the number of projects per year that clients buy from you.
The more projects a client buys from you, the better they are served and the more you put a fence around the client. It makes it harder for them to leave your firm if they are buying (on average) four or more services from you.
This KPI however should not be about retaining clients (although that will happen); it should be about servicing them properly. The internal mantra should be “provide every service to every client that helps them achieve their goals.”
If you are doing your job currently by building close relationships with your clients, meeting them frequently at no cost, you will get to know them and you will find many projects and opportunities.
To work out the number of projects per client, take your invoices sent number and divide the number of clients into it. Typically, it will be about two projects per client per year.
Here’s a simple test. In a table, list all your services across the top and all your clients on the left-hand side. Apply a “check” or a “cross” to each client and each product and see how many checks you come up with. This is a measure of your product penetration. It’s called a client product matrix. It looks like this.
My guess is that less than 15% (or less) of your clients buy every service you offer! Yet many clients need your additional services—they just don’t know the services exist because you have never offered them. What an opportunity!
If you have a focus on “all clients you want to keep,” then you will make sure they are buying what they need to succeed. A systematic approach is needed with a consistent questioning and interview process.
Rob NixonCo-founder at PANALITIX
About the Author
Rob Nixon is the world’s foremost authority on how accounting firms can achieve peak performance. Since 1994, he has been running businesses that specialize in helping Accountants run better, more profitable businesses. His speaking work has taken him around the world where he has spoken to in excess of 170,000 Accountants. Currently, his landmark strategies and products are used by Accountants in over 30 countries.
On average, clients increase profit by 75.5%, enhance capacity by 30.6% and achieve sustainable revenue growth of 52.1% - in just 12 months.
Rob is the author of two best-selling books “Accounting Practices Don’t Add Up – why they don’t and what to do about it” – and “Remaining Relevant – the future of the accounting profession”. Both have received rave reviews from Accountants and industry professionals from around the world.
Rob’s latest book “The Perfect Firm: Your Playbook for Building a Perfect Accounting Business” aims to help Accountants build their perfect accounting firm.
In 2005, he created the revolutionary coaching model called coachingclub. The coachingclub model enabled firms to be accountable, to consistently learn and to share ideas amongst their peers. So far, over 800 accounting firms have graduated from his coachingclub program. The vast majority of firms have doubled or tripled profits because of the program.
Rob is a keen golfer (single figures) and adventurer (he is ticket holder 293 on Virgin Galactic to go into space). He lives in sunny Brisbane, Australia with his lovely wife Natalie and three children.