Paving the way to your success: Locking in recurring buyers
This is the fifth in a series of posts from Jay Abraham, one of the world's leading business and marketing gurus. As Founder and CEO of Abraham Group, Inc., Jay has spent his entire career solving problems and fixing businesses. He has significantly increased the bottom lines of over 10,000 clients in more than 400 industries worldwide.
All of the content in this Paving the Way To Your Success series is brought to you exclusively by AccountantsWorld, as part of our ongoing mission to help you maximize the value and relevance of your accounting firm.
In this post, Jay shows how to boost your client retention rate, and lifetime value of each client. Click here to read the full series so far.
Here's a deceptively simple question:
How do you keep your clients coming back?
Three ways to Increase Your Client Retention Rate
- Contact inactive clients and ask, "Is anything wrong?" Call them up, visit them or write them, and communicate the fact that you are concerned and you're contacting them because you want to know why they are no longer doing business with you. Whatever is wrong, you want to know. If they have a problem, you want them to be aware that you are supportive. You are there to help in any way possible. If they have a problem with you, you want them to know that you stand ready to correct it—and to guarantee that the problem will never occur again. By taking the time to contact all of your inactive clients and communicating with them, you'll have enormous positive impact on them and their buying relationship with you.
- Make sure you're delivering higher-than-expected levels of service. The first question you have to ask yourself is: What does my client ordinarily expect to receive when they do business with my firm or my competitors? The key here is the word ordinarily, because your challenge is to take what even one ordinarily does and make it extraordinary, either by vastly improving upon it or by adding to it.
- Communicate frequently to nurture your clients. Your challenge and your biggest opportunity is to keep those clients constantly connected to you - and your CPA firm – and keep them constantly thinking about how good you are, how valuable you are, how much you care about them, their well-being, and how much they enjoy, desire, and value the products or services they acquire from you, keeping that connection alive and flowing.
Review Questions
Try to answer all the questions:
Why are clients no longer doing business with me or my company? Did something happen?
Is something wrong in their business or in their life?
Did they have an unsatisfactory experience the last time they did business with me or my firm?
Did I ever have a bad-buying experience with any company or any professional I ever worked with?
Did they call me afterwards? __________
How would I have felt if they had called me afterwards?
What does my client ordinarily expect to receive when they do business with my firm or my competitors?
What is the ordinary service, product, transaction, process, experience or expected result that a client expects when they deal with, not just my firm, but with any one of my competitors?
How can I move my accounting firm from the ordinary to the extraordinary?
How can I vastly improve upon the way everyone else in the accounting industry does business?
What can I add, both tangible and intangible, that would make it so much more beneficial and enjoyable to do business with me, virtually guaranteeing I’ll have that client forever?
On average, how many additional transactions can I expect to get from a new client I bring into my firm in year one, in year two – forever
Can I, in doing a true service to that client, offer them an improvement or an upgrade in either the size, the quality or the combination of the product or service they’re buying that would make it mutually profitable?
What is it about what I do, how I do it, and the people I use to help me do it, that my prospects and clients find valuable and appealing?
Client Retention Rate
Attrition is the opposite of retaining or continuing buying relationships with clients. Attrition is the number of clients who stop doing business with your firm. They're inactive clients, they are people who move out of the area, they are people who, for whatever reason, stop dealing with your firm.
What level of attrition does my firm experience?
1. Have they stopped being in a position to need or benefit from my product or service?
YES_______ NO_______DON’T KNOW_______ Why?
2. Do they no longer gain a significant benefit from using my product or service?
YES_______ NO_______DON’T KNOW_______ Why?
3. Did they have an unsatisfactory experience with my firm? YES_______ NO_______DON’T KNOW_______ Why?
4. Did they do business with me and not get the exact outcome they wanted? YES_______ NO_______DON’T KNOW_______ Why?
5. Have they dealt with someone at my firm who was offensive?
YES_______ NO_______DON’T KNOW_______ Why?
6. Did the product or service not perform exactly the way it was supposed to? YES_______ NO_______DON’T KNOW_______ Why?
7. Did they try to get an adjustment, new product or additional service, or get some improvement that wasn’t fully made or wasn’t made to their complete satisfaction, thus becoming dissatisfied?
YES_______ NO_______DON’T KNOW_______ Why?
8. Has a change occurred in my former client’s business or personal life that caused them to interrupt their buying practices with my firm and not start up again?
YES_______ NO_______DON’T KNOW_______ Why?
YOUR ASSIGNMENT FOR THE NEXT 2-3 DAYS
Your assignment may sound very familiar, but I’m sure the results you’ve gotten from what you’ve done so far have given you some strong momentum and enthusiasm to build on.
First, review this information and your answers, making additional notes on how you can apply what you’ve learned to your own CPA firm. Start with those methods and strategies that are simplest and easiest for you to apply and begin using them.
Next, at least one time, make someone – a prospect, a client – an irresistible offer, something that’s harder to say no to than anything that you’ve offered before. And if they say “yes,” and you haven’t given away the store, and you stand to make a profit over the long run, do it again with another prospect. And then do it again and again. Try a number of different clients and enjoy the results.
Detail your strategy for this assignment and your results.
How to Get Your Clients to Buy More and Buy More Often!
How to Increase Your Average Transaction Value
1. Use up-sell and cross-sell. You up-sell when you graduate your customer or client to a larger or superior alternative product or service that you know will give them greater performance and a better result. They don't have to buy it, but you have an obligation to demonstrate to them the differences in performance and the outcome they can expect to receive, and to make them an offer that gives them an incentive to consider upgrading. A cross-sell is introducing to the customer or client an additional product or service that will add to the result they get from your basic product or service. Your customers will appreciate you for making them aware of this additional value.
2. Use point-of-sale promotions. These are usually displays that grab your customers’ or clients' attention right at the point of sale. Once they have decided to buy any product or service, they have already started envisioning themselves owning, possessing, using or benefiting from that product or service. It is very easy at that point to assist them in getting even greater value or enrichment from the transaction by offering them other items at an advantageous price that will complement their original purchase.
3. Package complementary products and services together. This differs slightly from the concept of cross-sell above. Packaging refers to combining products or services together and offering them as the initial sale rather than waiting for a customer to buy one thing and then adding another after the fact as you do in cross-selling. Instead, you're bringing two, three or maybe even four different products or services together and making this "package" your initial offer to the customer.
4. Increase your pricing (and hence your margins). It's important to recognize that how your service or product is perceived is largely determined by the value you charge for that service or product. If you don't hold yourself to a high standard—if you don't revere the value and performance of your product or service and charge accordingly—it shouldn't surprise you when the market doesn't either. Also, if you keep your prices too low, you don't allow yourself enough margin to deliver all of the services and all of the value your product or service has the capacity to offer. So, you could actually be doing your customers or clients a disservice by charging too little.
5. Change the profile of your products or services to be more "up-market." This means positioning your company or your professional practice at a higher level of distinction and quality than the competition does. It means holding yourself to a higher standard of performance, holding yourself and your customer or client in higher esteem, adding more "dimension" to your business or practice, and doing so in a compelling way.
6. Offer larger "units of purchase." If most people buy a one week's supply of your product, offer them a month, a three-month, a six-month or a year's supply at an attractive price. If people normally buy one ticket, offer them a special deal if they buy enough tickets for their whole office or their whole family. If people come by themselves to purchase your services, offer them an inducement for coming with a friend, a colleague or a family member.
How to Increase Your Frequency of Purchase
1. Develop a back-end of products and/or services. You have current customers or clients who are probably very happy with you. They turn to you for a result that they depend upon. It is very easy for you to introduce them to additional products or services that give them similar or expanded benefits in their lives or businesses. You also have past customers or clients who are still prime prospects for additional products or services you decide to sell as a back-end. The concept of a back-end is that you're introducing both your current and past customers to new ways you can help them improve their lives.
2. Communicate personally with your customers or clients by phone or letter to maintain a strong, positive relationship. I look at customers and clients as dear and valued friends. I feel very fortunate to have them. I feel deeply connected to them. I care about them far beyond their capacity to spend money with me. If you share that feeling, you've got more motivation and desire to communicate to keep in touch, just as you would with any good friend. If you look at your customers or clients as dear and valued friends that you have the opportunity and the pleasure to serve, it makes the process of doing business a lot more enjoyable, exciting, and fulfilling.
3. Endorse other people’s products or services to your list. Ask yourself: What other products or services do my customers tend to buy or need before, during, and after they purchase my basic product or service? Make a list of them. Next, find out which companies or professionals are the best at providing these products or services. Then contact them and make a deal to offer their products or services to your customers or clients through endorsements.
4. Run special events (e.g., “closed door” sales, preferred customer offers, etc.). Whatever the size business, you owe it to your customers or clients to acknowledge them and make them feel special. If you do it through special promotions and events, it can be very profitable for everyone involved.
5. “Program” your customers or clients. In many cases the greater the frequency of usage, the greater the level of benefit the customer receives from your product or service. If this applies to what you offer, then you owe it to your customers or clients to offer programs that make it easy and appealing for them to use it more often and get better results.
6. Use price inducements. You probably have a lot of customers or clients who would appreciate and respond to this incentive for coming back and purchasing more often. Think about how effectively this has been used by other businesses such as the airlines in their “frequent flyer” programs. Then ask yourself, “How can I use price inducements to get my customers or clients to buy more often from me?”
Review this session then answer the questions below
What different products or services can I package or bundle together advantageously to bring a greater value and greater performance to my customer?
Can I raise the pricing on any or all of the products or services I currently sell?
If I do, could I use the increased margins I will then be making to justify adding more products, services, support or education to the transaction?
How can I give my customer or client a superior product, a superior service, a superior benefit, a superior result, so that my company or my practice will always offer them more than the competition does?
Could I take any or all of the products or services I sell and reposition them to be more up-market?
Is there a level of my market more upscale than I’m currently reaching that I should be catering to?
What other products or services, or combination of products and services, could I be offering my existing customers or clients that would be a logical extension or complement to the benefits they gain by coming to me in the first place?
What other products or services do my customers or clients tend to buy or need before, during, and after they purchase their basic product or service from me?
How many ways can I use price inducement to get my customers or my clients to buy more often from me?
Increase the Average Transaction Value
There are six very effective approaches you should consider to increase the average transaction value each time your customer or client buys from you. As you review these steps, make notes on how you can implement each one.
1. Up-sell and cross-sell.
2. Point-of-sale promotions.
3. Package complementary products or services together.
4. Increase your pricing and your margins.
5. Change the profile of your products or services to be more up-market.
6. Offer larger units of purchase.
YOUR ASSIGNMENT FOR THE NEXT 2-3 DAYS
Take one specific new action to increase your average transaction value.
Take one specific new action to increase your frequency of purchase.
Choose the easiest action to implement. Describe your plan of action below.
Coming Up Next...
In the next post, we'll discuss how to boost your inquiry conversion rate!
Best, Jay
