Keep Them Coming Back: How to Retain Good Clients
The key to steady repeat business is identifying your anchor clients and then keeping them happy, since losing them can potentially put you out of business.
What Makes a “Good Client?”
Vilfredo Pareto, an Italian economist, observed that 20 percent of the peapods in his garden contained 80 percent of his peas. From this, he extrapolated that 20 percent of the landowners in Italy owned 80 percent of the land. The Pareto Principle, as we know it today, expresses the idea that 80 percent of effects trace back to 20 percent of causal factors, or simply, a small percentage of your clients account for the bulk of your sales.
In this context, a “good client” can be defined as one who generates a greater portion of your revenue than an average account. They could spend more per billing cycle, or do more repeat business than other clients. They may pay more promptly and reliably, or generate more referrals for you than other clients.
Of course, there are other factors besides revenue that go into making an ideal client. You may prefer clients who serve a particular industry, require specific services or use a certain type of software.
Tips to Retain Your “Good Clients”
After you’ve identified your good clients, take proactive measures to retain them.
Focus on Your Target Market
The foundation for retaining good clients is attracting good clients in the first place. The success of this pivots on your marketing. Nate Hagerty, owner of TaxProMarketer, says a strong unique selling proposition (USP) is essential. A USP sets the parameters for your target market by pinpointing what your firm does that your competition doesn’t do. Your USP summarizes your appeal to your target market. Crafting one requires clarifying your target niche and which clients within your niche are most profitable.
Andrew Berg of Berg Partners has found that working with clients who use QuickBooks® Online (QBO) enables his firm to work more efficiently. QBO eliminates the need for Berg’s firm to enter data into their system or ask for backup discs, while slashing file-hosting expenses by two-thirds. Berg Partners now uses QBO for 95 percent of its clients, and aims to work exclusively with QBO clients in the near future.
Charge a Fixed Price
Another key to retaining good clients is to charge a fixed price, instead of billing per hour. Ingrid Edstrom of Polymath Bookkeeping Allies says that when you bill by the hour, clients are afraid to contact you with questions because they’re afraid of being charged extra. This reduces client satisfaction and discourages frequent communication. Charging a fixed price removes this barrier, resulting in higher satisfaction and higher revenue.
Become More Than an Accountant
Improve your client retention rate by offering services that go above and beyond the traditional role of an accountant. Steven M. Ellard of Steven M. Ellard, CPA, says that the traditional accounting model amounts to waiting until year-end to tell your clients what happened last year. Ellard’s firm seeks to go beyond this by working with clients month-to-month to provide the real-time information they need to make good business decisions. This way, his firm becomes a trusted advisor, rather just a bookkeeping service. The approach increases client retention by increasing the value you deliver clients and making you stand out from competitors who follow the traditional model.
Deliver Superior Service
Client retention ultimately boils down to delivering superior service. When your clients are satisfied with the service you deliver, they’ll keep coming back.
Rebecca Kelley of EKS&H makes a point to discuss software needs with new clients. By looking at current needs and anticipating future needs, she positions her firm to continue serving those clients for years to come.
Keep your best clients happy and they'll continue to be those anchor clients who keep your business healthy.