Looking to stay ahead of competitors in a dynamic B2B market? Client retention is as crucial as client acquisition for your agency's long-term success.
Acquiring new clients can cost 5 to 25 times more, making it unsustainable if the client turnover rates are high. In niche industries with limited clients, losing one to a competitor can be devastating.
From reduced marketing costs to increased profitability, a strong retention strategy is vital for all agencies—especially marketing, professional services, and media (which boasts an 84% retention rate)!
Keep reading to learn how to improve your client retention rate and learn 7 valuable strategies for agencies to retain clients.
EXTRA: We have included real-life case studies of brands that have effectively used client retention marketing in their business models! 😄🥳
What is Client Retention?
Client retention is an agency’s ability to keep its clients engaged and satisfied over the long term, ensuring they continue to do business with the agency.
It involves building and nurturing solid and lasting relationships with clients, reducing client churn (the rate at which clients leave), and increasing customer lifetime value (the total revenue a client generates over their entire relationship with the agency).
This success is reflected through:
- Extended client contracts
- Repeat business
- Referrals and word-of-mouth
- Positive testimonials
- Long-term partnerships
- Honest, constructive feedback for improvement
- Client advocacy of your agency
- Increased investment in your services
Why does client retention matter?
We can all agree that client acquisition comes with a lot of marketing, sales, and onboarding costs. From advertising to resources and training, the truth is, new clients are expensive!
A stable revenue stream from from loyal clients allows agencies to grow. In fact, statistics show that a 5% increase in customer retention can boost profits by up to 75%! 🤯
Clients who feel their needs are continuously met have a higher chance of recommending your agency to their network. Not only is this a great way to build credibility in your industry, but it is a cost-effective way to acquire new customers and expand your customer base organically.
FUN FACT: 65% of new businesses come from referral programs!
Just remember to stay proactive! 🤨
Promoting your brand isn’t always the first thing in your customers’ minds, so a simple feedback request can make the biggest impact.
How to calculate client retention rate
An agency’s client retention rate is the number of customers at the end of the period to the number of customers at the beginning of the formula. A higher percentage reflects a healthy and loyal customer base.
The formula for measuring customer retention is pretty straightforward:
Customer Retention Rate (%) = (Total Number of Customers at the end of the Period - New Customers Acquired) / Customers at the Start of the Period
The final figure is a percentage.
IMPORTANT: You must know your client churn rate, shown below.
How to calculate Client Churn
An agency’s churn (or turnover) rate refers to the percentage of clients that have left or stopped their retainer contract. A lower churn rate is desirable, but for small to medium agencies, clients may move on quickly if they don’t see results fast enough.
Here’s the formula for calculating your agency’s churn rate:
Annual Churn Rate = (Number of Customers at Start of Year - Number of Customers at End of Year) / Number of Customers at Start of Year
Is there a way to reduce client churn?
Yes, you can implement specific strategies prioritizing client success to reduce the chances of them leaving for a competitor. But some churn is inevitable, so let’s see what options we have next.
How to improve client retention
Low client retention rates (or high churn) indicate that your agency needs to re-evaluate its strategies or processes. Something isn’t working, and it’s hurting your profits.
Carefully crafted retention strategies aim to reduce customer churn and foster long-term client loyalty.
Before implementing any new client retention strategy, ensure your agency-client relationship is built on these fundamentals:
- Exceeding expectations: Consistently deliver exceptional service and results that go above and beyond.
- Building solid relationships: Foster trust, maintain open communication, and actively listen to client needs.
- Providing ongoing value: Showcase expertise, offer proactive solutions, and adapt to evolving client requirements.
- Prioritizing client satisfaction: Regularly seek feedback, address concerns promptly, and proactively prevent issues.
Best client retention strategies
Now that you know the significance of client retention, you are probably eager to implement it into your marketing efforts.
Below, we have compiled the 7 best client retention strategies for agencies to reduce client turnover.
#1 Offer a strong onboarding experience
A smooth onboarding process is crucial for making a positive first impression and building trust with new clients. It sets the foundation for a successful, long-term relationship. Here are some key steps:
- Extend a warm welcome to the new client.
- Finalize and sign legal agreements to protect both parties and mitigate risks.
- Streamline data collection to gather essential information to tailor your services to their specific needs.
- Secure necessary access to client accounts and platforms required for effective collaboration.
- Conduct an audit to comprehensively understand the client's current situation and identify areas for improvement.
- Host a kickoff meeting and establish alignment with stakeholders.
💡 Automate your client onboarding process to improve efficiency and reduce costs: 6 Ways to Automate Agency Client Onboarding 🙌
Find out more: The Best Way to Onboard New Clients
Case Study: Skytale Digital
Skytale Digital is a marketing agency that produces tracked marketing campaigns for restaurants worldwide.
Their onboarding process consists of a strategy call—whereby both parties can see if they are a good fit for each other—and access requests to their client’s Facebook and Instagram accounts.
To increase efficiency, SkyTale Digital has automated its access requests using Leadsie.
The founder, Luke, has told us that Leadsie has helped them retain clients by streamlining onboarding:
“It’s helped us streamline our onboarding, which helps us retain clients and get their ongoing billing started.”
They even got positive feedback on how smooth the process is! Here’s how it works:
#2 Showcase your agency’s core values
Are you proud of your agency’s values and principles? Let them shine through your branding and services! Whether this involves inspiring your clients with a mission or clearly stating how you do things differently, make it part of your brand identity.
- A strong brand instills trust in clients
- It differentiates your agency from competitors
- Improves brand perception and client’s willingness to pay a premium
- When client’s values align with your agency’s, they are more likely to invest in your services and remain loyal.
Clients value alignment between a brand's words and actions. A Harvard study revealed that emotions heavily influence B2B purchases.
Tips to build brand awareness with B2B clients:
- Define your brand values (such as diversity, inclusivity, etc.)
- Communicate your core values to foster transparency
- Consistently uphold them through excellent service and support
- Spread awareness through content marketing (case studies, videos, blog posts, etc.)
Case Study: Buffer
Buffer is a multi-purpose social media management tool. They offer features such as post scheduling, social media analytics, and post customizations.
The brand is known for its remote work culture and emphasis on transparency. Buffer is an ‘Open Company’—finances and salaries are available for anyone to see.
This is an excellent example of how a brand can retain customers by defining its values and consistently fulfilling its promises.
#3 Provide personalized client experience
Research shows that personalization drives a 10% to 15% revenue increase.
Catering to the unique needs of individual clients can give your agency a competitive advantage and differentiate it from others.
After all, clients are less likely to explore alternative options when they feel understood and valued within your agency.
As Lauren Oakes, CEO of Australia's No.1 agency Megaphone told us:
"The experience you provide customers will make the difference between a once-off purchase and a lifelong customer — this is becoming increasingly important with the cost of paid media rising. Personalizing the experience your customers have will provide a positive experience for the customer and can be one of the most cost-effective ways to impact your bottom line. It's a win-win for both."
Tailor your service from the start. During client onboarding, use a client intake form to gather essential information and understand individual client expectations. Then, impress them with your expertise and professionalism!
Find out more: How to Write a Client Intake Form
Case Study: Spotify
With over 573 million users, Spotify is one of the largest digital music services.
It is well-known for its hyper-personalized customer experience- making it possible with AI-powered recommendations. Spotify is pretty great at collecting and analyzing users’ music habits. 🎶
With its sophisticated machine learning algorithms, it is able to use patterns to understand music preferences and predict what users may enjoy in the future.
This valuable customer retention strategy minimizes existing customers' need to search for alternative music services.
This can be seen in their customer retention rate, where 83% of users who initially purchased the Premium Duo plan between October 2020 and October 2021 remained subscribers after 12 months.
#4 Offer collaborative content creation
Tap into the strengths of both teams by involving stakeholders actively in co-creating content. Encouraging clients to contribute ideas during the creative process increases engagement levels and promotes ownership.
Some examples include document writing, multimedia content, and visual asset design. Collaborating closely with clients is a great way to align expectations and avoid misunderstandings.
Case Study: IKEA
Founded in 1943, IKEA is a global home furnishing brand that began in Sweden. The famous retailer plans to launch a digital platform called ‘Co-Create IKEA.’
Customers can develop and test new products, and if their ideas are successful, IKEA may invest in their future products.
This is a great opportunity for talented individuals, designers, and startups to get recognition through the largest furniture retailer in the world.
There is already a big community of IKEA fans rooted in product innovation, so involving these customers in the design process is a smart client retention strategy that ensures continuous customer loyalty and satisfaction.
#5 Maintain regular communication
Active communication is a cornerstone for effective customer retention for agencies. Don’t just wait for your clients to reach out to you.
Here are some ways for your agency to be proactive:
- Company newsletter
- Educational programs and resources
- Surveys and feedback sessions
Fill your company newsletter with news of upcoming events, new blog posts, educational workshops, testimonials, and recent accomplishments.
Pro tip: Personalize your emails with tailored content for each client to enhance their value.
Training sessions and educational workshops position your agency as a valuable learning resource rather than just a simple partner.
Lauren, CEO of Australia's No.1 agency Megaphone shares her expertise:
"Feedback from clients and customers has the potential to exponentially improve the way you operate your business. Often a founder or staff member is so close to the day-to-day operations that they fail to see the biggest areas of opportunity. The improvements you want to make in your business are the ones that will directly impact the success and sales — and the people that determine this success, are your customers. You can do this through reading your reviews, sending an email to customers asking specific questions, or sending out a survey for feedback. If you have the resources, I find calling someone directly is the most impactful way to do this — the more personal the better."
Sending feedback isn’t always on clients’ minds, so taking the initiative by sending surveys and feedback questions is key to providing excellent customer service. Email your best clients a survey or hold transparency sessions to gather data on client satisfaction through deeper discussions.
Case Study: Megaphone
Megaphone is Australia’s multi-award-winning #1 digital marketing agency.
By putting together an effective growth strategy, they have experienced super-fast growth, quickly reaching $10 million in revenue.
Megaphone has an active blog with plenty of learning material and a page full of free educational resources.
From email marketing to the power of pop-up ads, they have compiled a wide selection of free resources that are guaranteed to encourage customers to expand their skill set and consistently engage with the agency.
#6 Start a referral program
Referral programs significantly boost organic client acquisition and chances of landing new clients. Potential clients are more likely to trust word-of-mouth recommendations than a cold sales pitch.
For instance, a survey found that 92% of internet users trust word-of-mouth recommendations, whereas only 36% trust video ads.
While satisfied customers tend to naturally talk about an agency they feel happy with, you must encourage existing customers to do so with incentivized referral programs.
These incentives will keep current customers happy while bringing in new prospects.
Incentives can take different forms:
- Commissions for each new client
- A surprise gift that isn’t monetary
- Discounts on their retainer contract or the equivalent
- Public recognition with content or social media posts
- A heartfelt thank you to the referrers
Case Study: ChiroCandy
ChiroCandy is one of the biggest chiropractic marketing agencies in the US.
With multiple client retention strategies in place—including educating clients on marketing strategies—one that stands out the most is their referral program.
When a client successfully refers a business to ChiroCandy AND they are active with them for 6 months or longer, the referring client will receive free TikTok, Instagram, or Facebook marketing services.
This referral program is a great way to encourage new customers to sign up and incentivize them to stay with ChiroCandy.
#7 Start a podcast or video series
This customer retention strategy is an innovative way for agencies to diversify the mediums they connect with their target audience. The best part? You’ll be establishing your agency as a thought leader in your industry.
Hosting a podcast or video series is great for client retention for several reasons:
- Acknowledge and give PR to your featured clients
- Share insights, insider knowledge, and learnings
- Address client concerns and how you resolved them
- Builds a sense of community
- Showcase agency success 🤝
Creating original content as such also helps with SEO efforts and may attract qualified leads right to your doorstep 🙌
Case Study: Leadsie
Here at Leadsie, we have compiled video testimonials and case studies in the form of a video series, where our co-founder Johannes Radig produces client spotlight episodes.
These series provide a platform for our clients to share insights and stories about their agency’s success and how they benefited from our onboarding tool.
Ready to boost your bottom line?
Effective client retention strategies aren't just about keeping clients happy—they're a proven path to increased profitability and a stellar reputation for your agency in the long run.
By weaving retention strategies into your agency business model, you can turn existing clients into brand advocates while saving on the costs associated with client acquisition.
Remember, client retention is an ongoing process! Regularly evaluate your efforts to ensure they're consistently delivering the best possible results.
Here at Leadsie, our goal is to help you maintain a high customer retention rate by automating one of the hardest aspects of onboarding.
Get access to your client’s assets in just a few clicks! 😄
Don’t believe us? Give Leadsie a try with our 14-day FREE trial and watch your sales grow!
Just enter your email below! 👇
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