How I reduced Client Churn, And How You Can Too!
Your clients didn’t sign with you just because they liked the way you described your services, or how well you understood the tax code. As a matter of fact, your clients don’t care a hoot about the fact that you can recite complete passages of the latest change in tax law.
Your clients only care about one thing, how well you satisfy their needs now, and how well they believe you can satisfy their needs in the future. They want to know that you understand their situation, and their needs, not someone else’s.
If you aren’t satisfying your clients needs, they will find someone else who will. It’s as simple as that. Customer loyalty is a fiction in the mind of folks who have a captive market, and with the changes that have taken place in the past few decades, captive markets are a thing of the past.
I know, Practice Builder Publishing offers hundreds of different tools and resources you can use in your marketing efforts. Methods you can use in attracting new and profitable clients.
But, the industry average of a 20% churn rate, is not something you should consider optimal. A 20% churn means that you have to replace one out of every five clients each year just to stay level. You have to be constantly exceeding that number in order to grow.
One of the easiest, and cheapest, methods of reducing your marketing workload is to change your focus from attracting new clients, to a program of retention. Loyalty is the new currency.
Loyal (and repeat) customers are the ones who keep your lights on and doors open, and are most likely to advocate for your brand.
So, what produces loyal bookkeeping, accounting, tax and consulting clients? Satisfying their needs. And, what is the first task you must complete in order to satisfy a clients needs?
Identifying and understanding their needs, and then telling them how you are going to satisfy those needs.
The second task is actually doing what you tell them you are going to do.
Your services can’t do the talking for you. Your business wins when you focus on attracting loyal clients instead of putting all of your efforts into growth through traditional marketing methods.
Then, adding a retention strategy will lead to increased customer profitability. An insane focus on pushing marketing messages to your target audience doesn’t work anymore.
Think of your new marketing model as customer education, which is absolutely one of the best ways to attract and retain the clients who will work with you and understand how you work to solve their needs.
Your ‘client education’ must be designed to communicate your knowledge of the prospects affairs, and position you as an expert in solving the problems they face. One method of doing this is to develop your own ‘seeding’ program, similar to the system I teach in the “Absolute Beginners Guide To Starting And Building Your Own Accounting Practice When You Are Flat Broke” training course. (You can find out more here.)
Your prospects will value the highly focused and industry specific information you deliver, so that it defines not only your brand, but them and their needs.
In addition to positioning yourself as an expert, able to solve the needs of your targeted market, your next step is to develop systems and procedures that allow you to deliver on your value proposition, your promises, in a superior manner.
Accounting and tax practices with the best success and highest retention rates often have one thing in common — great customer service. Retaining customers starts from within. Are you delivering the best service your clients can find, anywhere? Your churn rate is your scorecard.
Can you honestly say you are satisfying the needs and wants of your clients? People don’t stay where their needs aren’t being met. You may even be losing clients merely because they don’t feel as if their needs are being met. Because you aren’t communicating with them in a manner that educates and informs them, and lets them know that you understand their needs and how you are working to solve those needs.
Everyone wants to have a home. When you connect with your clients, they feel at home and they start talking about their needs. Once you know and understand those needs, you can adapt your value proposition to solve those needs, or even create added services to specifically address particular needs.
Start engaging your clients today and give them a reason to stay with you.
The value propostion you offer to your prospect or client should be relevant and explain in detail the steps you are going to take in order to satisfy their needs and desires. Every ounce of content you present must be relevant to their needs and be engaging to the prospect or client as a living, breathing, individual human being.
Your prospects and clients don’t want you to sell them the products and services you offer, they want you to fill their needs. Re-read that statement and look at how the focus changes, from what you can do and offer, to how you can solve the clients needs. The focus of a successful practice is not on the practice, it is on the client, and the satisfying the clients needs.
Practices with the most loyal clients.
In a market where each practice struggles to create a meaningful engagement, those who are able to identify customers’ needs and address them via authentic emotional values, will see tangible results.
Customer satisfaction and loyalty is increasingly determined by the complete set of customer experiences across multiple interactions with the brand, but primarily the communication with the client that explains how the practitioner is working to solve the clients needs, and giving the client specific, actionable, information that they can use. 17% of all client defections are directly attributed to a lack of communication by the accountant.
Client expectations will grow over time, giving you an opportunity to deliver new services, with greater profitability. Each new need of your client, and each new service you offer gives you an opportunity to build a stronger relationship.
The average client expected lifetime in the accounting and tax fields is five years. Sure, I can hear you saying now that you are above average, because your clients have been with you forever.
I submit to you that you are living in a dream world and not analyzing your churn rate. You are only looking at the clients you are most familiar with, and forgetting the ones who you have just acquired, or the ones who have just left. Or, maybe you are in a less than competitive market, where yo have little or no competition.
Again, no matter what your aveage client life is, the industry average client life is five years.
But, by the same token, clients who engage your services for five or more services, yield an average client life of ten years. For those of you who are still mad at me for implying that you aren’t measuring your churn properly, the significant point here is that if you are satisfying your clients needs, then they will be prone to accepting your offer of additional services, creating an even closer bond, and extending the projected life of the relationship.
So, if your current client lifetime average is eight years, giving you a 12.5% churn, you may be able to double it to sixteen years, giving you a churn of 6.25%!
Measure your churn rate, evaluate how accurately you are satisfying your clients needs, and you will on your way to attracting and retaining your most valued customers.
Above all, learn the keys to performing an accurate client needs analysis, define your client needs, and prepare a targeted value proposition. One of the easiest and most professional ways of performing a client needs analysis can be found in the “Absolute Beginners Guide To Starting And Building Your Own Accounting Practice When You Are Flat Broke” training course. (You can find out more about that here.)
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