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Attracting new clients can keep your business going. But, capitalizing on relationships with existing clients can keep your business going strong. The best way to do this, according to marketing guru Ted Rubin, is to invest in what he calls your Return on Relationship, or ROR. ROR, simply put, is “the value that is accrued by a person or brand due to nurturing a relationship.” This value, properly cultivated, “will accrue over time through connection, loyalty, recommendations and sharing.”
Return on Relationships By the Numbers
Cultivating your relationship with existing clients makes sense from a financial perspective. Courting new clients can cost anywhere from 5 to 25 times more than retaining existing ones. Research by Fred Reichheld, bestselling author and creator of the Net Promoter system, reveals that a 5% increase in customer retention could increase profits by as much as 25% to 95%. According to Reichheld, building relationships with clients is the biggest opportunity for keeping costs down. “Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline,” writes Reichheld. Additionally, existing clients often refer others to your business, reducing or eliminating client acquisition costs.
4 Ways to Reinforce your Value Proposition
The key to reinforcing your value proposition after the sale is to effectively manage your client relationships. This goes beyond quick email exchanges and sending holiday greetings once a year. Clients shouldn’t wonder what value you add to their business. These four activities will help you successfully invest in your relationship with clients so that they become long-term assets instead of short-term commodities.
1. Keep Clients Updated
For current projects, keeping clients updated is one simple way to remind them that you’re there and working on their behalf. This does not need to be long communication that can overburden already busy clients. Short, consistent communications on project activities weekly or bi-weekly can make a tremendous difference. You can highlight what has happened since the last report, what is planned for the next week or two, and what you need from them (e.g feedback, questions to address, etc.). The most important aspect of communication with clients is that they should never need to contact you asking for a project status. This is a signal that you aren’t communicating frequently enough and conveys to the client that their project isn’t important enough for you to keep on top of.
2. Opt for Extraordinary Interactions
In today’s info-saturated world, digital communication is the norm. Clients are constantly bombarded by emails, texts, and other impersonal means of communication. To cultivate your relationship, resist the temptation to add to the onslaught of impersonal communication when more personal options are feasible. Instead of ordinary interactions, opt for extraordinary ones. Having in-person meetings is perhaps the most important form of interaction because it allows you to renew your relationship and gauge your client’s demeanor toward your projects. In fact, research has shown that face-to-face requests are 34 times more successful than email requests. During in-person meetings with clients, reinforce your unique strengths to remind them why they chose you (and why keeping you is in their best interest).
3. Engage rather than Announce
The difference between successful and unsuccessful ROR lies in how you engage with your client. “A one-time Tweet, a quick Facebook posting, or an email here and there is an announcement, not engagement,” notes Rubin. Instead of blasting your clients with impersonal one-offs, offer relevant content and tools for their specific problems or ask questions and be receptive to answers. Focus on the give instead of the take. “If you truly want to make an impact, aim to always put more energy and attention in your ‘give’ column than in your ‘take’ column. It will pay off.”
4. Add Value, Consistently
Investing in relationships with clients relies upon one fundamental business principle: value. If you routinely add value to your relationships, clients are more likely to stick around. Adding value to a client’s relationship with you doesn’t have to be complicated. It can be as simple as sharing an article you think might be helpful (and including why), acting as a sounding board for dilemma your client is facing, or connecting your client to someone you know who many benefit their business. While this type of interaction may not be billable, it cultivates camaraderie and loyalty among your client base.
Conclusion: The Low-Hanging Fruit
We’ve seen that demonstrating your value proposition to clients is an iterative process that should occur over the life of your relationship with them. “If you deliver on your promised value, you’ll have a roster of clients who know you, like you and trust you,” writes John Bowen at The Huffington Post. “These are perfect clients to cultivate referrals from and generate additional income. And yet, too many entrepreneurs overlook this low-hanging fruit when seeking new business.”
Does your business focus more on acquiring new clients than on cultivating existing relationships? At Pharma Acumen, we’ve helped businesses that sell to pharma companies successfully reinforce their value proposition with existing customers to build long-term, profitable relationships. We have audited existing project communications, advised on enhancements, developed templates and monitored changes for our clients. For more information on how we can help your business achieve more successful relationships with clients, contact us.