Gaining or retaining clients? Where is your focus?

Gaining or retaining clients ? Where is your focus ? (Part 1)

One of the most common characteristics of small business operators is to put all their focus on gaining new clients in the noble attempt to grow your business. Obviously having more clients has the potential to lead to more cash flow, more profit and potential increase in size and scope.

They set up social media pages, take out paid advertising, print brochures and flyers, and so forth to attract that elusive and valued new client. Of course many of these things are initially necessary as potential clients need to know you exist and to know where and how to find you.

However, what business owners often don’t take into consideration is that a greater client base can will also greatly increase your business expenditure. You will often need more facilities, more staff, longer hours, more stock etc. All of these may erode those increased profits you assumed you would make.

Bear in mind the difference between increased cash flow and increased profit.

In fact, some businesses actually suffer when they increase the client base beyond the level to which they can actually service effectively, meaning that many of those hard earned new clients never return a second time. So you end up on the constant merry go round of gaining and losing clients, then having to find more to replace the ones you lost. This eats away at your marketing budget and also doesn’t generate you any good will or good reputation in the market place.

Remember business growth occurs faster when you attract new clients while also retaining existing ones. One without the other always limits your business potential.

A study by Harvard business school showed that as a little as 5% retention can increase profits by 25-95% (source)

We all know that people who have a good experience with your business will probably tell a handful of other people, whilst people who had a negative experience will tell as many people as they can, and even worse now with social media they vent to all and sundry, even if it’s untrue and biased, people read it.

So whilst it is natural to attract and regenerate your client base with new customers, it is critical to work hard on maintaining positive relationships with those who came to you in the first place.

We have put together a few tips you may adopt, depending on the nature of your business and your objectives, to assist you in retaining existing clients and growing your business.

  1. Provide a quality service not just a quality product

Sounds like an obvious one but so many business owners don’t appreciate the difference between having a quality product vs providing a quality service. Quality service is all about how your client feels about their interaction with your business.

We often have the ‘build it and they will come’ mentality rather than the ‘make them feel good and they will stay’ approach. Many great products and business ideas go to waste with poor execution and lack of focus on people relations.

We have all seen companies with seemingly lower end quality products who grow into massive organizations largely on the back of going over and beyond in the area of quality customer service.

2. It’s all about the customer experience

A classic analogy is the difference between flying first or business class vs flying cattle class. Whilst many people find it hard to justify the extra expense merely for a few extra centimeters of leg room and the ability to lay your seat further back, what many fail to understand is the key difference is in the entire customer experience.

The access to the business lounge before boarding; the absence of queues when boarding; the formal greeting as you board the plane as if you were a VIP; the attention to detail in ensuring your comfort; the extended friendly banter of the flight staff as if they were generally excited to have you on board; the complimentary accessories you need to pay for at the back end of the plane; the pre take off drinks in real glass; getting real cutlery instead of plastic; the ability to order off a menu and get better restaurant quality food, and so on and so on.

Are any of these things in isolation worth paying double for ? Absolutely not…however it’s all of these things combined that provide the lasting impression rather than just the extra space. It is totally about the customer experience. You are made to feel like the most important person on the plane (except the pilot). That’s where the worth is.

How did you feel after that experience ? How do you feel next time you’re at the back end of the plane – like it’s a major let down.

So ask your self are you charging fist class prices while providing economy class service ?

What experience are your customers walking away with ? If they aren’t walking back to you, the answer is obvious.

3. Your product must resonate with your client

It is rare that clients will part with hard earned cash because of what their clientele can do for you, but they just may if they have a belief in what your service can do for them.

In our field, we deal often with Personal Trainers and Martial Arts instructors and many fall into the same traps of pitching their whole marketing focus on how great they are, or were, what competitions they won or how chiselled their physique is and so forth.

Of course, all of these things are great for you, can be used to some advantage and would impress some initially, but unless that can be backed up with quality service it will be short lived and you will constantly be seeking new clients.

I know some of the best performers who had some of the smallest schools, or couldn’t remain open due to lack of clients.

It is all about what you can do for your client – understand your success does not guarantee theirs.

If you’re a trainer, for example, what do you think is more important to a new client, how successful you were or how many successful people you trained ? The results you helped your clients get outweigh the result you got yourself. And if that success was all in a competition type format, what happens if they have no desire to compete, just to get fitter or learn to defend themselves ? Then you are probably of little value to them as a trainer – ouch !

I often hear frustrated trainers lament on how the other guy gets so many more clients yet they have been more successful, have more skill, look fitter, have more experience are more highly ranked etc – unfortunately the ego does not allow for clarity of understanding when it comes to the importance of your client needs vs your own needs

4. Quality has virtually nothing to do with how much you charge

We get asked by our students and graduates all the time – how much should I charge for a session, a treatment and so on ? When we ask, well how much do you think it’s worth ? The usual response is a long pause.

Another question may be, well how much would you pay someone else if you were the client. If you don’t value the product yourself, you are probably in the wrong business.

There is no magic answer when it comes to pricing, people will pay what they think something is worth – period. If they felt they got value, they’ll pay again, if they don’t, they won’t.

Many look at what everyone else is charging and just copy, or go lower thinking undercutting will steal their clients – it rarely does, not long term anyway.

If your service and products are lousy, whatever you charge is too much, no matter how cheap you charge.

Many people take the philosophy of being the cheapest ‘therefore everybody can afford me and I will get them all’ mentality. Combining a low price (income) with high volume, but now to deliver your product is going to cost more because you have higher volume of clients. The problem is you have low income because you were so cheap, so guess what suffers……your quality.

People still won’t come back, even with your low prices, because your quality is crap. And worse still, you probably still didn’t make all that much money. Of course you can price yourself out of the market by being too expensive, it really depends on who you are pitching your service too.

Bear in mind in a class type setting, filling your classes with new clients often results in you neglecting your long term loyal clients ……… and they leave. Your most important paying client is the one who has been with you the longest.

5. Find your niche

Pitching expensive products to frugal people rarely works – but you also need to appreciate that pitching cheap products to quality focused people also rarely works. This is also linked to where and how you market your product – a lot of money can be wasted promoting your business where the wrong people will see it.

Many naïve business owners will say ‘Oh I will take everyone’ but you need to understand not every one will be interested in what you have – you need to find your niche and focus there.

At the end of the day, you need to decide which type of customer do you want, and who do you think is likely to value your service and product more ?


In part 2 of this article next week, we will look at some tips to help gain new clients, followed by part 3 with more specific strategies for retaining clients.


by Michael Muleta, CEO – Global Fitness Institute

B.Ed, Adv Dip Bus, Dip Bus Mgt, Dip Online Marketing.

Michael Muleta, CEO