Attracting new customers is a top priority for many companies. Also in the business services industry. Yet it is advisable for this type of companies to invest more time and energy in retaining customers instead of attracting new customers.
Better chance of a sales deal with an existing customer than with a new customer
In business services, the sales process for new business usually takes a very long time and competition is often fierce. From the longlist to the shortlist to the final decision, one party after the other is excluded from the selection process. The chance of a sales deal with a new customer is therefore very small, in many cases less than 10%. This is different for existing customers. They are familiar with your organization, your people and your capacities. If they are satisfied with the level of service that you offer, the chance that they will choose your organization for a follow-up project is considerable. As a business services provider, therefore, invest a lot of time in customer satisfaction and customer relationships. It increases the chance of a sales deal with a new project.
Acquisition costs are much higher than retention costs
Accountancy firms, law firms, software vendors and consultancy parties invest a lot of time and resources in meetings, discussions, presentations, demonstrations and negotiations to convince a company to choose for their organization. These acquisition costs can add up enormously. The many non-chargeable hours that your (often important) employees spend on preparation, research, travel, meetings and follow-up can skyrocket. While the costs of customer retention are much lower. After all, the customer already knows you well and knows quite a bit about your capabilities. When an existing customer has a new project, plans to expand the business, renews IT or optimizes processes, coordination with you is required, but these retention costs are considerably lower than the acquisition costs for a prospect.
Happy customers bring new customers
Happy customers are the best possible ambassadors for your organization. Substantial investment in marketing and sales can be profitable, but a simpler and cheaper way is to pay careful attention to existing customers. Make sure they are satisfied, or even better: make them enthusiastic. Then they will recommend your organization to others. And a recommendation from a colleague organization or competitor is considered many times more reliable than the texts of your own marketing department.
Customer retention allows you to build customer relationships
In business services, trust is key. And trust is created by acting in line with agreements, delivering on promises and delivering quality. By being a reliable and strong partner for your customer over a long period of time, you build a valuable relationship. And that is crucial in business services. After all, it is always people who make business decisions. No matter how strong your product or service is, it is the emotions and instincts of people who make the difference in sales processes.
You are not faced with the choice to either bring in new business or to retain customers. Divide your time and energy well over both. And for many business service providers, this means paying more attention to retaining customers, as this often receives less attention than acquiring new customers.
Teun Arts is Service Manager at Dysel and it is his job to ensure that customers make optimal use of the software, now and in the future.