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Customer Retention Management

As our industry continues to grow, so will the entrance of certified trainers, competence is no longer a point of differentiation, but merely the price of entry. Meaning, our client’s decision to retain us will not be based solely on the efficacy of our offering and the ability to produce results, but the outcome our offering provides - coupled with the experience it’s packaged in.

Case in point is IBM. If you purchased hardware from IBM in the 1960’s and 1970’s, they would provide your company with a full implementation plan, at no cost. In conjunction with the hardware purchase they provided a peerless service plan that encompassed the necessary service’s to maximize customers return on their investment.

This earned them the slogan, “IBM Means Service.” IBM dominated their competitors. However, as customer demand began to exponentially increase and the justice department began intervening in the company’s operations, IBM began to charge explicitly for their service and give away their hardware. They found, that their customers were willing to pay a premium for their services. It wasn’t the hardware or operating systems that customers valued, but the benefits of peace of mind and the increased performance of their business. In short, delivering what customers expect in the first place is no longer enough.

Solution

The growth of our industry has resulted in numerous choices afforded to our prospective clients; leading to greater expectations and demands.

We are up against two emerging forces in this industry. They are, the growth of information and competition. In order to position yourself as the preeminent option available to your prospects, you must have a systematic approach to the individualization and implementation each component of your programming strategy. In addition, the cultivation and preservation of professional relationships are indispensable to your success.

Retention is important because:

  • It is significantly less expensive to keep a client than to acquire a new one
  • Attrition is measured monthly, but compounded annually
  • Meaning if you have ten clients and lose one per month, that’s ten-percent. However across the span of a year you’ve had to replace 12 clients. When you consider the lost revenue of the average sessions per week of all twelve clients and the acquisition costs of replacing a client per month, the financial consequences of mere 10% attrition (client loss) can be significant.
  • It forces you to pay attention to the variables affecting client behavior and purchasing habits
  • Attrition is often silent attrition which prevents you from identifying and correcting areas of dissatisfaction within your client base, which is one of the major reasons businesses fail.

Therefore, an investment in your clients can yield a substantial return. In part one of this series we will explore the interpersonal dynamics related to building relationships that lead to greater retention. In part two we will examine specific practices that will cultivate reciprocity and assist you in establishing a point of differentiation in the mind of your clients. Each of the following components will increase your ability to retain your best clients long-term.

  1. Emotionally Engage them

    University of California researcher Paul Ekman, demonstrated that certain postures and facial expressions have a profound impact on emotional state. Using an Electroencephalogram (EEG) subjects showed more activity in the left hemisphere, the part of the brain associated with feelings of happiness, when they produced a sincere smile. When they ceased to perform the pattern of movement consistent with a sincere smile, the activity in the left hemisphere diminished. Doctor William James of Harvard, stated in his book The Principles of Psychology (1890), that emotions are the result of our physiology or body language.

    “…We feel sorry because we cry, anger because we strike, afraid because we tremble, and not that we cry, strike or tremble, because we feel sorry, angry or fearful…”

    2. Researchers Cacioppo, et al (1992) & Rome, et al (1990), have recently reported similar conclusions. In addition, Hatfield, Cacioppo & Rapson (1992) propose that not only does our body language and facial expression control out emotional state, but is contagious to others as well. People have the
    tendency to unconsciously mirror our body language. Therefore, be aware of how you show up to your sessions? If you are in a negative emotional state, your body language will reflect that; and that means you may adversely affect the state of those around you. We desire to be around people who make us feel good. If your client experiences a negative state change most of the time they are with you, obviously this can hurt retention. Conversely, if every interaction with you promotes positive feelings and associations, their view of you as an invaluable component of their life their life increases. The maintenance of any relationship depends largely upon the feelings that two or more people associate to each other. Therefore:

    • Be keenly aware of your body language and posture, in addition to your clients?
    • Be conscientious about the messages you send through your facial expressions, vocal tonality, attentiveness, etc.

    Take nothing for granted, determine:

    • How your client feels emotionally, mentally and physically at the start of each session.
    • What is most important to them during (?) each session? Tie in every component of your session to his or her desired outcome.
    • Monitor their emotional state throughout the session. Is it improving? What sessions did they find especially enjoyable? What was it about those sessions they liked most? How can you replicate that every session?

    Finally, emotional engagement results from challenging our clients beyond their current scope of possibility. What separates leaders from laggards and excellence from mediocrity is vision; the ability to see our clients beyond who they are, but rather, as who they could be. The greatest contribution you can make in your clients life, is to help them in creating that vision for themselves as well. Continually challenge and encourage them. Help them set and achieve goals slightly beyond their current self-expectations. That gives them a glimpse of the possibilities within them, which in turn alters their self-concept. By altering ones self-concept you can far exceed incremental progression to their goal, you can create a substantial shift in your client’s self-concept.

  2. Uncompromising Customer Experience

    3. Our clients are inundated with solicitation of innumerable products and services on a daily basis. Therefore, the only thing that they will notice as a point of differentiation is something that goes far beyond a typical point of contact. Essentially, uncompromising customer service is what we are willing to do beyond what’s required. Performing a session with professionalism, excitement and delivering superior program design and coaching, ultimately resulting in the achievement of their goals is not extraordinary. It’s simply the minimum measure to be retained. The word uncompromising means that you’re adamant, rigid and unwavering in your commitment to do whatever it takes to ensure an optimal experience and maximum results for your clients; so long as it doesn’t undermine your business.

    This doesn’t mean offering things like a free session for every ten that they purchase. If you gave away one session per every 10 package sold, you would lose the cost of the session, in addition to the time slot you could have booked someone else. Don’t forget the hour you could have been prospecting to build your business. That’s at the least twice your hourly compensation, for an experience that’s no different in your clients mind than the past 10 sessions!In addition, it will eventually become expected by your clients, not appreciated. If the value of your services is worth what you are charging, a free session is not an added value.

    Industry consultant Tom Plummer says, “Never discount, always enhance!” Instead, do something special that they will remember. Patricia B. Seybold in her book “The Customer Revolution” suggests that we consistently exploit opportunities to do things for our customers (clients) that make them feel important and appreciated. Some effective ideas include periodically rewarding purchases, re-signs and incremental achievements with things like:

    • Tickets to their favorite sporting event.
    • Tickets to the theatre.
    • If they told you that they would like to fit into a certain outfit or size pants when they lose 10 pounds, Get them a gift card at their favorite clothing store when they achieve that goal.
    • To augment their self-myofacial release and flexibility program, buy them a massage. This is a great investment in your network as well. If you are sending business to a massage therapist in your club or community, they will be wise to send business to you as well.
    • Dinner at their favorite restaurant.
    • Merchandise from your facilities pro-shop if applicable. This also promotes another profit center in your facility.

Look out for Part 2 –in our August newsletter Don’t receive our newsletter? Simply become a member of PTA by filling out the form on the website.