Client retention is an imperative you cannot ignore

It costs less to retain existing clients than to acquire new ones

Acquiring new clients is undoubtedly critical to growing your business. But equally important – or perhaps even more important – is retaining your existing clients. That’s because retaining existing clients costs much less than finding new ones.

You also risk losing unhappy clients because they are fair game for other advisors in a highly competitive environment. You should, therefore, have a plan and a budget for client retention – just as you would for client acquisition. The reason is simple: existing clients are an investment worth protecting.

The truth is that you would have already established trust with existing clients. The longer you keep them, the better your chances of getting a more significant share of their wallet and referrals, enhancing their value to your practice.

However, when it comes to acquiring new clients, your acquisition initiatives are not guaranteed to be as rewarding as your experience with existing clients.

Regardless, client acquisition should be an ongoing initiative if you want to grow your practice and offset the effects of clients lost through attrition. However, the process can be challenging and lengthy and requires a disciplined approach to gradually deepening your relationship with leads and prospects with the expectation of converting them to clients.

You must demonstrate to potential clients that you can add value to their lives. To do so, you must examine yourself from the potential client’s perspective to determine why they would choose you as their advisor over competing advisors.

At the same time, you must be aware that many of these relationships might never bear fruit. For instance, you might find that some relationships are not worth pursuing because they do not fit your preferred client profile. Some are not necessarily ready to engage you because they are currently working with another advisor.  But the fact that they are receptive to your overtures leaves the door open for a future relationship which must be diligently nurtured.

As much as you would like to land as many clients as possible, it is prudent to determine the type of client you would like to target. As a result, you may wish to engage in some form of segmentation using criteria such as asset size or demographics like age, gender, life-cycle stage, lifestyle, and ethnicity, among other variables.

This approach will allow you to tailor your marketing and communications strategy to leads who meet your predetermined criteria. If you selectively invite people to a seminar who meet specific demographic and psychographic criteria, you can reasonably assume that you have qualified leads. Otherwise, you could spend a lot of time and money nurturing leads who you do not want to be your clients.