QUESTION: Since the beginning of the pandemic, our growth has been stunted. Sales are now improving, but our client count is about the same. What can we do to gain more new customers?
ANSWER: Client growth is a function of attracting new customers and retaining old ones. It does no good to bring in a new account today if you lose an old one tomorrow.
Too often, owners and managers place too much emphasis on new business and fail to appreciate the value of long-term customer relationships.
I owned and operated an independent insurance agency for many years. We did an analysis of our customer retention rate and found that we were losing about 1 in 10 customers each year. The reasons included going out of business, sale of the business to another person or entity, and losing business to a competitor.
While we could not control the first two, we took a hard look at the third.
Customers change providers for many reasons. Surprisingly, studies show that price is a distant third to product quality and customer service. As we were a service-oriented business, we decided to renew our focus on customer service.
As an example, we had many contractor clients who required that certificates of insurance be delivered to a third party with short notice. We made a same-day commitment, returned all phone calls the same day and never made a promise we could not keep.