It’s easy to understand why new leads feel more urgent than existing clients.
Hemel Shah (pictured) is sales director at Eligible
Every business needs clients. That’s a given. After all, without them, there would be no business. But while securing new clients is obviously important, should you do so at the expense of your existing clients?
Consider this:
- Acquiring new clients costs up to five times more than retaining existing ones
- An increase of just 5% in client retention can increase profits by up to 95%
- The success rate of selling to a client you already have is 60-70%, while the success rate of selling to a new client is 5-20%. (Source: Invesp)
- So rather than chasing down new clients, you can often actually realise a better return on your investment (in terms of both time and money) by nurturing the client relationships you already have in place.
Repeat business is easier and faster, plus there’s a greater chance of completing i.e. you’re more likely to get paid. That’s why building a client bank and focussing on retention is so important.
While some brokers spend a lot of time thinking about/working on retention, others spend very little. Why is that - and which brokers have got it right?
Brokers who only focus on new clients
Maybe you’re a broker who’s always got plenty of new leads (lucky you) and as a result, you focus your time on closing new deals. Inevitably that means you spend less time focussed on retention.
It’s easy to understand why new leads feel more urgent than existing clients. It’s exciting closing new deals and helping new people, plus losing some of your past clients doesn’t seem like such an urgent problem.
But you’re exposed to the market at all times. If there was ever a downturn in new business, do you think your past clients (who you’ve neglected) would welcome you back with open arms? Unfortunately, it’s not that easy to turn on the existing client tap when it’s been left to rust while you focussed on other things.
Maybe you’ve got an okay retention rate simply because some of your past clients are proactive in reaching out to you. When you do work with an existing client, how easy are those deals to close? Pretty straightforward, right? So, these remortgages are more certain and take less of your time.
Brokers who focus on new clients AND retaining old clients
If you’re a broker who spends a lot of time thinking about retention and actively working on it (great job, by the way), you’ll (hopefully) know how lucrative it can be - especially when you do so alongside securing new clients too.
But developing your business this way almost certainly consumes a huge chunk of your time - what with managing your diary and keeping in contact with your clients on a regular basis, as well as going out and looking for new leads.
We’re betting that you’ve not got much left in the tank (in terms of time and energy) at the end of each day.
If this is you, keep reading...
How to retain existing clients (and keep your sanity)
The key to retaining existing clients is to keep in contact with them on a regular basis. As we outlined in our last article, staying in touch with your clients ensures you’re always front of the mind when they are looking to remortgage.
But while newsletters and Christmas cards can play an important role in this, nothing beats personalised content, tailored to your client’s situation.
Of course, this takes time - It sometimes may even feel like time wasted because you don’t see an immediate return on your investment. But the idea is that time invested today will pay dividends down the line when your clients start thinking about remortgaging.
The great news is that brokers can actually spend zero time thinking about retention but still up their retention game in the process. Sound too good to be true?
The answer could lie in automated retention software, like Eligible.ai, which removes all the manual processes typically associated with retention.
With automated retention software, you can take advantage of personalised and relevant communication capabilities that will be much better received by your clients (boosting your retention levels in the process). This not only keeps your existing clients interested, but also allows you to focus on opportunities to grow your business in other ways.
Final thoughts
Ponder this: if you have a 40% churn on your existing client bank, and are simply replacing that 40% with new clients, you are never actually growing your overall client base/bank. Now imagine if you could reduce that 40% churn and still attract plenty of new business.
By taking advantage of automated retention software, you can steadily grow your overall business, without spending loads of time focusing on retention.
This will not only help you during downturns and safeguard your business going forward, but also improve your overall conversion rates. Existing clients looking to remortgage are more likely to complete than a new client who’s looking to purchase.
