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.
About the Author
Colin DunnDirector & Co-founder at PANALITIX
Colin is a Chartered Accountant who, having spent almost 10 years with one of the fastest growing and most innovative firms in the UK, has since invested over 20 years helping business owners to improve their businesses with a focus on attracting new clients, better managing existing clients, developing new products, building an engaged team and strengthening internal business processes.
Colin's primary focus at PANALITIX is on product development and business improvement content. He is the author of the bestselling book “Accountants: The Natural Trusted Advisors".