Boost Client Retention with These Strategies
How often do you look at your agency’s churn rate? Do you know the lifetime value of a client? What are your client retention strategies? Do you dedicate time to client retention like you do to client acquisition? It all starts with monitoring the right metrics, understanding what clients really want, and being proactive in client services. Today’s guest is an agency sales and client service expert who manages end-to-end sales activities for a white-label agency. She shares the key metrics you should track and tips to help you master client retention.
Kushbu Doshi is the VP of Sales and Customer Service at E2M Solutions, a white-label agency with clients around the world. She is a customer service specialist with a passion for strategizing, making realistic action plans, and following up on their implementation to get real results for agencies. Kushbu has been on the show before to talk about how to improve your customer service.
In this episode, we’ll discuss:
- How to calculate client retention rate.
- Questions that lead to better client retention.
- Dedicating time to retain existing clients.
- Important KPIs to improve agency-client relationships.
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How to Calculate Your Agency’s Client Retention Rate
The team at E2M Solutions has created metrics meant to track their performance in terms of client retention. The most important step to start getting a sense of how your team is doing with client retention is establishing your client retention rate. You can figure this out by establishing how many clients you have at the start of the quarter (S) and at the end of the quarter (E).
Client Retention Ratio = (E ÷ S) x 100
So basically, if you have 100 at the start of the quarter and 80 at the end of the quarter, your retention rate will be 80%. Ideally, your client retention should be above 75%. Any number below should be something you address with your team to find out what’s not working out.
Effective Ways to Master Client Retention
Client retention starts with the sales conversations and setting the right expectations from the very beginning. There are many things you could start doing at your agency to increase retention level.
For instance, after calculating your retention rate, you can appoint a client service person to start tracking client success. E2M decided client service has to be a stand-alone role instead of something handled by the project manager or the team working directly with the client.
This person ensures the client is happy and the agency is matching client expectations. They have keynotes for every client containing their goals for the next 1-3 years. These details help the agency determine how to work with the client, what may not work, and how to upsell or cross-sell new opportunities to extend the relationship.
Additionally, they also do periodic calls in which they go over expectations and progress. Basically, it’s about keeping an eye on your clients and staying curious about their plans for the future. Are they open to expanding services? What kind of niche do they want to target next?
Ask Bold Questions and Improve Client Communication
Kushbhu’s team is trained to ask bold questions in the sales call to find out why clients want to be associated with their white-label agency. What are the major pain points her team will solve? If you can get clients to talk about their whys, you’ll come out confident about exactly what they want. Many times these conversations help reveal what the client thinks they want is not actually what they need.
Additionally, in most cases, clients are pleasantly surprised to receive this type of personalized attention. This type of action helps win trust and mutual respect.
Do You Dedicate Time to Retaining Existing Clients?
Kushbu strongly believes the time spent getting more leads should match the time spent retaining existing clients. After all, if your churn rate is high then what’s the point of just focusing on getting more clients?
The E2M Solutions team dedicates a specific day of the week to review existing clients’ challenges. Are those clients working well with the current team? Are they matching the delivery times of previous weeks? A review of these metrics determines whether they’re on the right track to retain clients. The rest of the week is dedicated to new client acquisition.
Many people don’t focus on retention until they lose a few clients. Once they think they figured it out, they move on to the next issue. With a client service team in place, E2M always has dedicated efforts to client retention.
Using AI to Figure Out What Clients May Like
Kushbu and her team are starting to experiment with AI to see how to best utilize this tool. For now, they have been using ChatGPT to create personas and ask them about specific scenarios.
For instance, they have tried the command: “if you were a client success manager what would you do in this scenario?” They also share a client’s characteristics and preferences to then ask what it thinks their client would like. In Kushbu’s experience, AI comes up with really good recommendations.
Important KPIs for Improving Agency Client Relationships
Other important KPIs are the Lifetime Value (LTV) and Customer Acquisition Cost (CAC) ratios. Keeping track of these has helped the E2M Solutions team understand where they’re at and the kind of positioning they need. Another important metric is the average amount of time clients stay with you so you can increase the duration of the relationship.
Kushbu suggests agency owners use these metrics instead of relying solely on churn and retention ratios. It’s important to always be looking at these numbers by calculating them every quarter instead of just at the end of the year.
Do You Want to Transform Your Agency from a Liability to an Asset?
If you want to be around amazing agency owners that can see what you may not be able to see and help you grow your agency, go to Agency Mastery 360. Our agency growth program helps you take a 360-degree view of your agency and gain mastery of the 3 pillar systems (attract, convert, scale) so you can create predictability, wealth, and freedom.