The best kinds of business partnerships improve client retention.
No matter what industry you operate in or who you sell to, few things can be more important for the lasting success of your business than client retention. Not only does acquiring new customers cost five times more than retaining existing customers, but simply increasing retention rates by five percent can more than double an organization’s revenue.
Despite this, churn can be a very real problem for many businesses, with some industries experiencing average churn rates between 21 and 25 percent.
Because client retention can have such an outsized impact on your profit margins, finding ways to continually improve retention and reduce churn should be a top priority for any business. With the right kinds of partnerships, this can become much easier and more effective.
1. Provide Something Truly Relevant
One of the most important considerations when embarking on a client-focused partnership is whether that partnership is truly relevant to your target audience.
This can be seen when larger “big box” retailers partner with specialty retailers, such as Target entering into a strategic partnership with Ulta Beauty in 2020. What made this partnership work was that the two brands had a shared relevance to a specific audience. Ulta Beauty’s reputation for quality products would serve as a natural draw to Target stores. At the same time, the larger footprint of Target stores would make Ulta Beauty products more readily available.
This partnership served as a true win-win, because both partners stood to improve client retention (and acquisition) by providing a relevant partnership that created value for their core customers. Complementary goods and services helped create a stronger retail experience.
2. Focus On the Client Experience
Some of the strongest partnerships focus almost exclusively on improving the customer experience. This doesn’t necessarily require that you do something new or change your services. Instead, it entails using a partner to provide a higher-quality experience throughout.
Globally, 73 percent of consumers say that the customer experience is an important factor when making a purchasing decision — and they are often willing to pay more for traits that they feel deliver a better experience, such as greater convenience or a “friendly” experience.
This is often seen when a brand will outsource some of its client-facing activities to a partner — such as how luxury hotels use several different suppliers to manage tasks like food or laundry services.
When such partnerships are used to improve an activity that the company was attempting to manage on its own, but simply didn’t have the resources or abilities to do effectively, it can deliver a much stronger experience to clients. This can also improve your organization’s other activities by giving your team more time and resources to further strengthen their areas of expertise.
3. Expand Your Offerings
Another key advantage of strategic partnerships is their potential for helping your brand expand what it is able to offer to its clients. When you can expand your offerings to become a true “one stop shop,” you open up the potential to significantly increase your earnings from current clients, while also encouraging them to stay loyal to your brand.
For example, vcita’s partnership program serves as a powerful tool that expands what agencies and financial institutions are able to offer their clients. Integration with other apps and the ability to offer small business customers a branded app that supports scheduling, payment management, email SMS marketing and more can serve as a powerful value proposition that adds on to the services that clients are already receiving.
Partnerships that focus on adding features and services that truly benefit your clients can help your organization increase engagement while also building trust and loyalty with existing clients. Such tools can even create new opportunities for cross-selling and upselling by letting clients pick and choose from a new selection of partner-powered or otherwise integrated services.
4. Back Up Your Messaging
One of the most important things your clients will consider when deciding whether to continue to do business with you is if you can “walk the walk,” and not just “talk the talk.” This means that you must be able to fulfill the promises you made when you first onboarded that client.
Whether you’re part of a B2B organization that promised to help its clients streamline their supply chain, or you run a lawn care company that promised stunning results for its customers’ yards, your ability to fulfill these promises is crucial in keeping clients around for the long run. This can even affect word of mouth for your brand and influence your ability to attract new clients.
The right partners can help ensure that you are better positioned to deliver on those initial promises that you made to your clients. Partners who improve your own operational efficiency or improve your service offerings in relevant ways strengthen your ability to fulfill promises and keep clients happy for the long run.
Turn Partnerships Into a Powerful Force for Retention
Partnerships can help manage a wide variety of aspects of doing business — but few areas should receive a greater emphasis than client retention. When you utilize partnerships that focus on delivering a better experience for your customers and keeping them loyal to your brand, you and your partners will be able to enjoy higher profits as you consistently deliver quality results to your clients.
