Focusing Your Freelance Business On Client Retention
The key to building lasting client relationships is listening to, and learning about, the client’s needs, fears, and goals. When a freelance consultant understands what drives the client’s decisions and can clearly communicate solutions that address those issues the client considers he or she a valuable team member. That kind of relationship turns a client into a supporter, that happily becomes a repeat customer who refers colleagues. Focusing on developing long-term client relationships that improve client retention is a key aspect of building a sustainable business.
What is Customer Retention?
Business consultant and author, Peter Drucker, maintained that the purpose of a business is to make and keep a customer and defined customer retention rate as how well a company keeps its paying customers over a period of time. The goal of every Freelance practice should be to retain as many good clients as possible. Client defections are not only disheartening, they are expensive. Continuing to ‘delight’ existing clients is more cost effective than marketing and acquiring new clients.
All of us have lost clients and when it happens it feels like getting punched in the gut. It is important not to descend into “coud’a-would’a-shoud’a” mode. When you lose a valued client, treat it as a learning moment. The inevitable post-mortem is an opportunity to review or business processes and activities to identify and implement ways to improve client retention.
When you lose a valued client, it is a good time to ask so hard questions. What can we do to improve our client onboarding processes? Are we clearly communicating with our clients during project discovery and project management activities? How are we handling Scope Creep? Are we being pro-active and precise in our verbal and written client communications?
As a working member of the “New Freelance Economy” you need to understand that the old economy rules still apply. It costs more to acquire a new client than to successfully manage an existing client. According to Harvard Business School research report, increasing customer retention rates by just 5 percent increases profits by 25 percent to 95 percent.
If you are still wondering if focusing on client retention needs to be a priority for your Freelance practice, I strongly suggest you invest a few moments reading an article published in the Harvard Business Review, The Economics of E-Loyalty http://hbswk.hbs.edu/archive/1590.html
Developing a Client Retention Strategy
Developing a client retention strategy built on communicating clearly and constantly, while delivering outstanding value, will build lasting relationships. This value-based customer management process is your competitive edge. Your price point is irrelevant to your loyal clients because they know you, trust you and consider the value they receive from your services, and the peace of mind you provide them, well worth the price.
Focusing on customer retention takes your freelance practice out of the race to the bottom. Too many WordPress Consultants have found themselves trapped on the client acquisition treadmill cutting their prices to attract new clients while neglecting to keep in touch with their existing clients.
Most freelance practitioners cite lack of time for falling down on client communication and project management. These same, harried freelancers fall prey to the false choice of focusing either producing the deliverables or building a sustainable client relationship.
That belief would indicate that their business processes are out of control and their business model is not really sustainable.
Focus on the core components of developing long-term client relationships
1. The process of developing the ideal customer experience
How you want your clients to feel about their interactions with your freelance business
2. How to establish a communication policy and instituting the processes to execute it
When used well and consistently, clear, timely customer communication can be a major competitive advantage
3. How to delight the customer with unexpected value
How to identify what your clients find valuable and provide it
4. How to become your client’s subject matter expert
Solving client problems can build loyalty and good will
5. How to become a trusted consultant for your client’s business
Learning to be a listening board
6. How to use Automation to reduce your workload
Buying time with efficient use of tools and processes
7. The balance of being available to your client while still setting behavior boundaries
The balance between helping and enabling
We understand being an independent freelancer can be difficult and most days we all have to balance competing priorities. Following these steps will help you and tune your Freelance business model for efficiency and success.
Pro Freelancer Tip
Develop worksheets and checklist to help you instantiate the process improvements into your freelance practice.
- Put your plan In writing.
- Test, optimize, and refine your client retention program
- Ask for and act on customer feedback.
The best long-term customer relationships are built on respect, communication, and appreciation. Process and tools alone will not determine the success of your customer retention program, but they will give you a framework to build a sustainable freelance business with less stress.