Mastering Client Retention in Digital Marketing Agencies Amid Economic Uncertainty: Strategies and Best Practices
In today's increasingly competitive and economically uncertain landscape, client retention is more important than ever for digital marketing agencies. By understanding the importance of client retention and implementing proven strategies, agencies can improve their relationships with clients, leading to long-term success for both, the agency & the clients.
This article will explore the best practices to master client retention, even amid economic uncertainty.
Understanding Client Retention:
Client retention is a business's ability to keep existing customers and generate repeat revenue from them. It is often measured using churn, calculated as(Users at the beginning of a period - Users at the end of the period) / Users at the beginning of the period. High client retention rates are vital to a digital marketing agency's success, as retaining clients is easier and more cost-effective than acquiring new ones.
High client retention rates are vital for a digital marketing agency's success, as retaining clients is easier and more cost-effective than acquiring new ones. According to a study by markin-blog, Increasing customer retention only by 5% increases profits by 25-95%.
Balancing Acquisition and Retention:
Focusing solely on acquisition or retention is not the right approach. Both must be part of your strategy to boost revenue and scale your business. While customer acquisition brings new clients, ensuring their retention can lead to long-term, sustainable growth. It is essential to strike a balance between these two aspects, as currently, 44% of companies have a greater focus on acquisition, whereas only 16% prioritize retention.
Striking the right balance between customer acquisition and retention is essential for sustainable business growth. Existing customers are 50% more likely to try new products and spend 31% more than new customers.
Start Retention Early:
Agencies should focus on client retention from the moment a client is acquired. You can set a client for success right from day-1 & offer them a delightful experience by offering them a customized onboarding.
It's an ongoing process that requires continuous effort and communication throughout the project lifecycle. Your Account manager plays a crucial role, acting as a customer advocate and ensuring a strong relationship between the agency and the client. If you don't have one, consider hiring one or promoting one of your internal client-facing staff to the Account Manager role.
A few strategies for better Client retention based on our own experience:
1. Choose your clients carefully - Not everyone who is ready to buy is a potential client.
• Clearly define what your expertise is, it can come from your own background & past experience.
• List down the value proposition you offer. Why are you one of the best teams that the client can work with to solve their unique issues?
• List down a few ways you differentiate yourself from others in the same market. Trying to do everything for everyone is a sure-shot recipe for failure. In our agency, we did this for longer than I'd have loved to admit we did it. Initially, it was good because we were able to bring in some initial clients & generate some revenue, but over the years it became very clear that this approach is not working if we have to scale. Identifying a niche was the only way to scale further & become an expert at one thing.
• Qualify a client before starting to work with them - As stated above, not everyone who is ready to pay is your client. Qualify them based on your ideal customer profile. The qualification can be done based on a number of factors including geography, size, team structure, domain, financials & more. We will cover this topic in detail in one dedicated article for this subject.
2. Understand their business goals and pain points:
• Once you have identified who your ideal customers are, and you start speaking to them, next figure out what their expectations from you are. Asses this & set clear objectives.
• Do not brag, don't try & sound bigger than you are, or don't try to show yourself as an expert at something you are not. While this may help you get the client's business, it is a recipe for failure as soon enough you will start falling through the cracks & the clients will start noticing that.
3. Set realistic expectations:
• Be realistic, and humble & ask questions where you are not clear. Asking questions at the start of an engagement is an extremely efficient way to make sure you have covered a lot of ground. This helps with no nasty surprises down the line.
• Always under-promise & over-deliver. Don't be like 90% of the agencies who over-promise in the enthusiasm of getting a new client business only to fail & not deliver.
• Identify & agree on how change requests will be handled. Let's face it, every project starts with the promise of a clearly defined scope but during the project, the clients start getting new ideas / or they are faced with situations that require them to adopt. Any of these can cause change requests from your clients. Having it agreed with them on how you will handle these Change Requests (CRs) right at the beginning not only instills confidence in them that you know your job well but is immensely helpful & avoids implementing last-minute requests without a plan.
4. During the project:
• Identify a single point of contact (SPOC) and let them be the face of your agency for this client's work. Having a single point of contact for your clients throughout the life of a project helps keep the conversations under context & is effective for both. This also saves a lot of time.
• Prioritize proactive communication - This in my opinion is one of the ways you can set yourself apart from a lot of other agencies. Most agencies do not communicate enough & in this remote-first world, over-communication is the way to go forward. Create and agree with a status update schedule with your client & stick with it. If the clients are part of your project workspace, ensure your teams post a summary of high-level to-do items they are working on & post an End of day update for everyone.
• Keep all updates documented & in one place so it's easy to search/ go through them when needed. This also helps keep your clients accountable for their share of the tasks/ work you need from them. Any delays caused by the client side should be clearly visible so at the end it doesn't feel like the project got delayed due to the agency's ineffectiveness.
• Obtain regular feedback throughout the project - Our major error was only gathering client feedback at the end of projects. This lack of continuous feedback led to misunderstandings and an emphasis on negative experiences. Without visibility on client satisfaction, we couldn't act proactively, which sometimes resulted in losing the client.
5. Address objections effectively:
• By continuously monitoring and measuring feedback, you can promptly and effectively address negative feedback and client concerns. This demonstrates your competence in managing large, complex projects and strengthens client trust, resulting in improved relationships and retention.
• Establishing open and transparent communication channels with your clients enables them to voice concerns and objections easily. This fosters collaboration and allows you to address issues in a timely manner, strengthening the client relationship. Provide your clients with an easy way to share their feedback & objections with you.
Providing clients with consistent progress updates on project milestones and achievements helps them stay informed and engaged. This proactive approach allows you to address potential objections before they escalate, ensuring smooth project execution and client satisfaction.
How Anywhere Can Help:
Anywhere is designed to help agencies effectively manage client projects and address the concerns mentioned earlier. Here's how Anywhere can enhance client retention and support your agency's growth:
- Identify unsatisfied clients by monitoring client feedback and overall sentiment scores on your Dashboard.
- Upon identifying an unsatisfied client, swiftly review their feedback and previous project updates to determine the reasons for their dissatisfaction, without the need for lengthy team calls.
- Once the issue is identified, take proactive measures to address client objections and get the project back on track, restoring client satisfaction.
- Utilize dedicated status updates to keep clients informed and maintain all records in one location.
- Efficiently communicate with your team and clients through a unified group chat, featuring private conversations hidden from clients while preserving context and avoiding tool-switching.
- Employ built-in Loom recordings to facilitate asynchronous communication between team members and clients across different time zones.
Explore this interactive demo to familiarize yourself with Anywhere's features and determine if it's the right fit for you: