How to Retain Customers

A condensed guide for essential service customers.

Even under the best economic circumstances, client retention should be a point of discussion as businesses review job profitability, pipeline goals and sales efforts. When faced with the possibility of a recession, it’s arguable that client retention should be given even more priority.

Why? Great question.

  • Companies that prioritize their customers’ experience generate 60% more profits than their competitors.
  • The cost of acquiring new customers is higher than generating revenue from existing customer relationships, regardless of the size of your business.
  • As you become more familiar with customer needs, you can attune your services to best fit the scope of each contract without starting from scratch.

So, how do commercial cleaning and security companies go about retaining customers, especially when they’re facing so many of the same challenges (tight margins, high competition, and economic uncertainty possibly leading to things like shrinkflation) as you?

What does customer retention look like?

Technically, customer retention is defined as the rate in which a customer stays with a business as a purchaser of goods or services.

Still, there are all sorts of more detailed ways to look at customer retention: customer loyalty, customer retention at the same rate of service or above (without scaling down scope or contract rate), customers outside of first-time buyer status, and customers by value delivered.

To measure different areas of customer retention, implement a reporting and analytics strategy that can measure:

  1. Customer health score: How useful is your service to your customers? Has it solved the pain points they’ve voiced? Have they (or would they) refer to industry peers? How often do they use your services?
  2. Customer lifetime value: The total revenue you can expect a single customer to generate over the course of their relationship with your company to determine the value of the customer over time.
  3. Customer effort score: How easy is it for your customers to get the help they want and need?

When you discover the results and effectiveness of these three metrics, you can put your findings to work, using this information as data-backed prioritization within your customer service, field-based and leadership teams.

Should I focus on my customer retention rate, or winning new customers?

While it’s generally recommended to make a concerted effort towards customer acquisition, in most cases, customer retention should be the  priority within your business strategy.

In fact, Hoover’s estimates improving customer retention by just 5% can have a ripple effect towards improved profitability to the tune of 75%. When measuring the amount of impact for output, customer retention should be prioritized as a method that delivers more ‘return’ for less ‘investment’.

That said, retention doesn’t always add the same value customer by customer. Here are a few sample use cases for prioritizing each strategy:

The use case: customer retention.

Let’s say you have a long-time customer who has contracted services with your business. Your teams are able to complete tasks, including ad hoc requests, without dipping into overtime budgets or straining other overhead costs. On paper, the customer is seemingly less lucrative than larger contracts, but you’re able to determine the margins of profitability are high.

In this instance, your company should make sure you are working to retain the customer. Although seemingly a lower revenue generator than other contracts in your portfolio, you’re able to deliver on SLAs while maintaining profitability, while building customer loyalty in the process. Make sure to continue to deliver on customer satisfaction to retain this business, even as you work to build your revenue with new business elsewhere.

The use case: customer acquisition. 

Let’s say you have a long-time customer who has contracted with your business. Your teams are well aware of contract scope and SLA needs. But, through the process of analysis, you discover that the real-world activity your workforce is delivering is worth more than the money that job is contributing to your bottom line.

In this instance, client retention could actually be costing your company. This is where software that measures job profitability can be a clear value-add to your business. After conducting a job costing analysis, present your findings to your client, and use it as leverage to renegotiate existing contracts. If either the scope of work doesn’t decrease, or the rate of billable work doesn’t increase, this may be a case to prioritize customer acquisition over customer retention.

Although it may seem tedious (especially without the help of job cost analysis technology) it’s important to look at each of your contracts at a granular level to help guide your business’ focus.

Understanding the reason for customer churn.

The first step to take in winning back departed customers is to understand why they left in the first place. Just as every customer should be treated as an individual, each case for separations should be treated individually, too. Take a step back, and ask yourself the reason ‘why’. Then, reevaluate your technology solutions partner(s) and portfolio to see if you can rectify the situation prior to implementing a win-back campaign. A few examples:

Were customers dissatisfied with service? Improve your quality assurance and proof of work toolkit. 

Did customers feel out of the loop? Improve your reporting, analytics and business intelligence skill sets. 

Were customers dissatisfied with the price of service? Provide detailed invoicing and billing connecting line item services. (And, back it up with your job costing analysis.) 

Were they concerned about risk? Demonstrate your strategies around health, safety and compliance. 

How to win back churned customers.

Our friends at Slingshot, a company within TEAM Software’s WorkWave family, provided this step by step proven example of an email-based customer win back campaign.

Step one – timing: Build an email sequence you can keep at the ready in the event of a client departure. If you send an email when they leave (even as early as that same day) they’ll be more likely to open the email and feel good that you noticed they left.

Step two – subject line: If possible, tailor the subject line of the email to each recipient – and try to make it catchy. Note: this isn’t the same thing as a gimmick. If a customer has departed because they’ve been dissatisfied with service, they likely won’t respond well to a gimmick. Keep it short; formal, but approachable.

Step three – recognizable ‘from’ line: Make sure the email is coming from a person or department they know or recognize (a.k.a. Not “”). Customers are less likely to cancel when it’s a person versus a company email.

Step four – short and meaningful conversation. Their time is valuable, so make the email short, to the point and empathetic. You want them to know that you understand why they left and that you want to do what you can to make it right.

Step five – incentivize. This might be harder to do, as economic shifts are leading to many businesses already tightening their belts. If the customer is worth the value, though, it’s important to offer an incentive for them to return.

If you’re interested in learning more about tools that can help with your customer retention strategies, request a discovery call today to find out how TEAM Software can help.