The reality is that if you have spent countless hours and money building a book of business, and you rely on that revenue, you need to implement an Appreciation Strategy.
It’s a powerful way to fortify your clients against attacks by the competition, and a much faster way to grow your business. Let me give you seven reasons why this is true:
Reason #1: Higher Retention Rates
Showing your clients genuine appreciation has been shown to strengthen customer loyalty. The reason this is important is that when clients feel appreciated, they are significantly less likely to even consider listening to a competitor’s pitch because they feel like they have a relationship with you. Therefore, clients can’t be stolen by the competition if your clients won’t even talk with them, so, your retention rate is higher.
Reason #2: Strengthens Customer Advocacy
Customer advocacy is the public support for or recommendation of your business to friends and colleagues. This advocacy is a vital ingredient of an Appreciation Strategy because it creates the foundation for you to be able to increase the number of client generated referrals.
Reason #3: Low-Cost Marketing
Research shows it can cost as much as 5-12 times more to acquire a new customer than retain an existing customer. In other words, an Appreciation Strategy will cost 5-12 times less than prospecting using programs such as Google AdWords, Facebook Ads, direct mail, email campaigns, etc.
Reason #4: Creates a Culture of Client-Generated Referrals
An Appreciation Strategy provides the perfect opportunity for you to create a culture of client-generated referrals. Most businesses do not ask their clients for referrals because they do not want to seem pushy. In the next section, I’ll share with you the soft-sell approach to asking clients for referrals and how they will be eager to send their friends and colleagues.
Reason #5: Increases Sales Growth
Using appreciation as a marketing strategy could provide you the opportunity to double your best clients. It’s true! Let me share with you why this works:
The Law of Reciprocity states, “when someone does something nice for you (shows genuine appreciation), you will have a deep-rooted psychological urge to do something nice in return.” In your case, you will teach your clients to share referrals.
Now imagine you implement an Appreciation Strategy targeting the top 20 percent of your clients, the high-value/high-revenue accounts. As a part of your strategy, you send them a small gift and say, “I appreciate your being a great client.” After receiving the appreciation gift, some clients will reach out to thank you. This is when you should take the opportunity to share with them how it would be helpful if they know someone “just like them” that could benefit from your services, and if they could kindly let you know. Then state, that you will of course give them the same high level of service they have come to expect from your business.
Reason #6: Mobilizes Current Client Base
The phrase “money left in the files” refers to when a business has the potential to obtain more business from their current clients, but it does not capitalize on the opportunity. By showing genuine appreciation, you open the door for clients to do more business with you.
A friend of mine owns an insurance agency. In reviewing the sales numbers, he discovered that his customer service rep was always in the top three producers for his office. This fact was frustrating to the actual producers whose job it was to generate new business. However, the reality is that her sales came from helping current clients, not prospecting. Her sales are proof that his current clients could become a source of a lot more revenue than he is currently benefiting.
Reason #7: Higher Closing Ratios
Most marketing efforts have a closing ratio of 3 to 18 percent. However, because an Appreciation Strategy generates referral-based leads, the closing ratio is 50 to 70 percent higher and 69 percent faster. The simple fact that the prospects were referred by a current client, and that the prospect called, is a sign that they are ready to buy.
David Justus is an author, speaker, and Guinness World Record Holder. As the founder of Northcoast University, LLC and The Self-Coaching Vault, he shares his insights as a life and business coach to help people achieve greater success and more happiness.