New business development is typically viewed with an outward mindset. While it is true that bringing new prospects into your business is a key part of growth, how you engage and leverage the clients you already have can increase revenue and create new opportunities for growth.
In the software-as-a-service (or SaaS) world—think subscription software platforms like SalesForce—growth experts often tout the principles of Customer Success by Mehta, Steinman, and Murphy.
In addition to having aggressive sales and marketing teams, successful SaaS companies often hire a vice president of customer success (and eventually build an entire department) to drive efforts geared to improve customer satisfaction and outcomes.
This comparison to our space is powerful, because like advisors, SaaS companies depend on client engagement to generate recurring revenue, making one of their biggest enemies “churn,” or the percentage of customers that leave in a given time period. When you track and attack churn, amazing things can happen. Here are the highlights:
A 5% increase in retention can increase profits by to 95%. This figure, touted in a now-famous Harvard Business Review article, should turn your head. That boost in revenue comes from a variety of factors: it’s cheaper to keep customers than it is to replace them, the greater the lifetime value of all of your customers the greater your revenue, and retained clients are likely to adopt a number of revenue-increasing behaviors that we cover in the next bullet points.
Happy clients are likely to spend more with your business. In SaaS, that means buying an upgrade or adding more users. For advisors, this means increasing walletshare and adopting new initiatives, all of which deepen the client’s connection to you and increase your revenue.
Clients like to brag about their success. Word of mouth marketing is still the most powerful source of new opportunities, so when you do amazing work for your clients, they will tell their friends and peers. Referrals are a low-cost way to generate new business, and the sales process for referrals tends to be relatively is easy. When your clients advocate for you, more doors will open.
Prospects want to hear about successful clients too. It’s a small world, after all. When you have a great story to tell about how you helped a client, if the client does not recognize the name he or she will likely be able to see themselves in the story you tell. Each success story you create for a current client becomes an arrow in your quiver for future sales.
Now that the growth opportunities in client success are clear, how can advisors capture those opportunities?
For five behaviors that we find to be key, read on.
The five key behaviors:
Client success starts with the sales process. The quality of your client’s experience starts with the first touchpoint. Your sales process is an opportunity to establish expectations, create a connection, and to identify what needs to happen for your work to make a difference to the client. If you start the relationship strong—demonstrating your confidence and expertise without making the client feel small—that momentum can carry into the relationship.
Identify and preempt potential pitfalls. You can likely think of a few common mistakes or challenges that can undermine a client’s success, and those are worthwhile places to start new initiatives. If you know what can derail a client, address or prevent the problem before it becomes a catastrophe. The bigger opportunity, however, is in your data. For example, if clients start to dropout in year three, what can you implement in year two to keep them engaged?
Show clients that you are paying attention. Consistent touches, even if they are small, keep you and your expertise top-of-mind for clients. Inform clients of new opportunities, check in on their progress, and add a personal dimension where appropriate. When you are the one bringing new developments to your client’s attention, you cutoff a competitor’s ability to use that as an in-road and you also solidify your own credibility. As you do this, take care to be sincere. Don’t just go through the motions. Make an honest connection.
Adapt your business to meet a common client need. I don’t mean that you should become a jack of all trades but rather that you should be open to considering a new addition to your team or a change in your processes if you consistently see the same problem or opportunity impacting your clients. In our business, for example, we saw that cold appointments were challenging for our clients, so we tried something new: Bringing in a sales coach to improve our client’s success.
Client’s like to be recognized, too. When you have a notable client success story, turn it into a case study or a public relations piece. If you lean more on bragging about your client’s role in that success, talking up him or her as well as their business, you demonstrate that you value the relationship and that you’re proud of the work you have done together while also creating a piece of collateral that your client can share on your behalf.
Client success is a powerful business tool, but true success is far deeper than lip-service to the idea. Even the most experienced advisors are likely overlooking at least one opportunity to spark more growth from their client success because they are not helping their clients move forward with initiatives or decisions that would be impossible without the advisors trusted expertise. Dig into your business and seize those hidden opportunities.
—Read Increase Your ROI on Marketing Dollars with Partnerships on ThinkAdvisor.