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Building a Client Retention Plan

The cost to gain a new client can be six to seven times higher than the cost of retaining an existing client.

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Building a Client Retention Plan

As a financial professional, you are conditioned to have short-term and long-term business plans. You may even have been trained to create a marketing plan for how you will grow your business. But do you have a formal client retention plan? Research shows that the cost to gain a new client can be six to seven times higher than the cost of retaining an existing client. Also consider that your best clients are your competitor’s best prospects. If you don’t have a plan to retain your clients, you could be losing them to the competition.

Experts suggest reaching out to your clients 12 to 18 times per year. While 18 might be a little on the high side, 12 to 14 times a year is quite reasonable.

Here are some simple steps to help you create a client retention plan. But before you get started, you will need a 12-month calendar handy!

Step 1: Start by marking your calendar with the month(s) in which you will hold any client appreciation events. These may include financial workshops, holiday parties, or even a summer picnic.

Step 2: Identify the obvious on your calendar. Mark December if you send holiday cards, or any month in which you typically send something to remind your clients that you appreciate their business and continue to support them in pursuing their financial goals.

Step 3: At this point, you should easily be able to see the gaps in your retention plan. A month should not go by without clients receiving a communication piece from you. The heart of a good communication plan is a well-written, professionally designed, and informative financial newsletter that is sent on a regular basis (we suggest at least quarterly). We believe it’s critical to have an “anchor” piece in your plan, whether you use Broadridge Advisor Solutions financial newsletters, someone else’s, or create your own. Pencil in a quarterly newsletter in the appropriate months on your calendar.

Step 4: By now, your plan is half complete! Another few minutes and your new client retention plan will be ready. Highlight or circle the blank months left on your calendar. The remaining months can be filled with a variety of additional communication pieces. Some suggestions:

  • Send your clients a thank-you card each May. Why? Because it’s right after tax season has ended and finally a point in time when they can focus on their long-term financial objectives. This is a good time to remind clients that you appreciate their business.
  • Use client surveys or questionnaires to solicit input and feedback.
  • Send market reports or commentaries, particularly about financial topics that may have been “twisted” by the media. This can help reinforce the idea that you are a voice of reason who can help separate fact from spin.

Even though we’ve only listed a few suggestions on how to fill out the remainder of your calendar, there are many good choices available.

Remember, whatever you send your clients should be consistent in quality; prominently display your name, contact information, and picture (if possible); and demonstrate the image and brand you have established for your practice.

Please do not make the mistake of believing that a prospectus (or a product brochure) counts as keeping in touch with your clients. Boring! It may be required information, but it does nothing to make your clients feel special.

Your clients have selected you because they believe you are providing value. Each time they receive a message from you, they are going to be thinking about what’s in it for them. Will they toss your envelope or message, or will they find something useful or reassuring inside? By keeping your name in front of your clients on a regular basis and sending them informative, high-quality materials, you can help reinforce their decision to work with you and limit their motivation to switch to the competition.

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