The Power of Retention
I am a big fan of paying attention to business trends and learning from the successes and failures of super successful brands and executive leaders. One continuously proven method of success is the power of retention. Retention of both employees and clients saves companies money and time and secures recurring profit. Retention is valuable across any industry. School systems with long term principles and educators out perform others. Companies with loyal subscription based or recurring customers are incredibly profitable. You would struggle to find an attorney, accountant, publicist, or any talented independent contractor who doesn’t require a retainer and strive to continuously impress you to continue to earn your repeat business. Retention is good for business. Let’s break down the art of retention.
Retain your People
Your amazing product or service will amount to nothing without the right team in place. Retention of your top talent is crucial because the experience that they have gained working with you will be hard and timely to replace. If they are amazing they are probably getting better every year, month, week, and day! That’s priceless. Keep them on board by:
• Hearing their ideas
• Letting them lead
• Rewarding them with perks and bonuses
• Providing a work culture centered on equity and successful work life integration
• Allow flex days and give them more control over their schedule
Assure them that they are valuable, appreciated, and working with you versus for you and your efforts will be rewarded with their loyalty and commitment.
Solve a Recurring Need
You may offer a one-time service and that is great if your product is valuable and does well. But as your unofficial strategic advisor I implore you to develop multiple streams of revenue within your organization. At least one or more of those streams should be a recurring service. This product or service can recur monthly, quarterly, or yearly. It’s no coincidence that Apple releases a new phone every year, or that clothing monthly subscription services are really taking off! I instruct every company I advise to find and fill in blank space. Fill the void. If you effectively solve a problem clients will return.
Understand your Market
If you want to fill voids and solve problems you must understand the target market and demographic that you will service so that you can appropriately address their concerns and challenges. Ask yourself:
• Is my service universal or specific to a particular group or segment of people?
• What age range of people are best for my product?
• Is my product best used in a specific physical location or city or can it succeed online and nationally?
• How much should my ideal buyer earn or what purchasing power should they have to use my service?
So many companies invest in group studies, surveys, and market research and these are not minimal investments. They do this because they understand that in order to retain clients they must know how they think, spend, and what they need.
People. Product. Market. It is not a simple process but it’s simple to remember what is important! When I am hired to help leading brands grow or restructure their business one of my early tasks is to address where they are financially hurting the most because I know that if I can strengthen their revenue and remove poor spending choices I can help them get over most challenges and get prepared for real growth. Not understanding the power of retention is a costly mistake. According to Glassdoor, the average company spends about $4,000 hiring a new employee! Imagine having to restaff 5-10 employees every quarter! The average customer depending on the industry takes anywhere from $20-$400 to acquire. That’s a lot of marketing dollars! Retention is financially savvy. It’s also evidence that as a leader you have mastered the ability to draw people in and produce a product or service of value, so much so that clients keep coming back. Retention is the biggest compliment your organization can receive!