Mastering Client Loyalty: Strategies and Tactics for Building Long-Term Client Relationships
Ready to get serious about growing your coaching business? Client loyalty is your secret weapon.
When I was growing up, every family in the 1970s had two coffee choices: you were either a Folgers Coffee family or a Maxwell House family. There were no other options. No Pete’s coffee or Starbucks.
You bought the coffee pre- ground in coffee cans, which your mom opened with a can opener. The freshness of said coffee was questionable, but we always bought Folgers. I also bought Folgers for the first few years of my adult life. We put it in paper filters and used our Mr. Coffee coffee maker to brew it.
We were loyal to Folgers until we weren’t because in the 1990s and early 2000s, we had choices we didn’t have in 1974.
There are many coffee options now. You can buy a Nespresso or a $1500 Italian Pro-espresso maker. You can buy pods or beans or fair trade Java. You can import your coffee at $100 per pound from the Blue Mountains of Jamaica, or order pure Kona coffee from Hawaii.
We used our Keurig machine with coffee pods for years, but we recently switched to a regular coffee pot. Our new Cuisinart grinds the exact amount of beans before brewing. And suddenly, (just like that,) we became a “Starbucks breakfast blend” family. I am sure my dad believed we would buy Folgers forever! I now buy Starbucks at probably three times the price of Folgers in much smaller bags. Starbucks has our loyalty now.
Most lose millions because they take it for granted clients will buy over and over. But their clients aren’t loyal. Those businesses spend so much money, time and energy acquiring new customers. This also costs companies market share when their current clients buy from them just once and then go on to become loyal customers of the competition! Yet most industries stick their heads in the sand and don’t seem to care.
And they absolutely should care.
A few statistics about customer retention and its relation to loyalty:
Increasing customer retention rates by just 5% increases profits by anywhere from 25% to 90% Harvard Business Journal.
One in four consumers or clients will pay more for better service. That means they will come back specifically and be ok with paying more, over and over. (Forbes)
44% of businesses focus on customer acquisition, but only 18% focus on customer retention
The top five players in any market have an average customer retention rate of 94%. Their competitive advantage is similar to Folgers coffee's back in the day; clients buy repeatedly. A brand can grow by adding just a few new leads and a few added products. These brands don’t have to replace the attrition of unhappy clients. They keep the old clients, gain new ones, and dominate the market.
What’s the Impact of Client Loyalty?
Client loyalty creates automatic revenue and eliminates much of the expense and necessity of new lead generation. What would happen to your business in five years if you kept 94% of your clients from last year and added just a few clients each year?
Let’s do some client loyalty math:
Year one your revenue is $ 500,000.
94% of clients buy again the following year without new client acquisition costs. This means the revenue is automatic! And margins go up, meaning better profits.
You add $200,000 in new sales;
Year two revenue is $670,000;
94% of clients buy again. $629,000 BEFORE you add any new leads. Very little cost to maintain those clients.
You add 200,000 to your revenue each year through new sales or advertisements.
Year three revenue is $829,000.
Your projections are $1,000,000 by year five before adding any new business.
If you are a company that only makes eight million a year, you could make twenty million through client loyalty. If you are a company making twenty million, you could be making fifty million. If you are at fifty million, you could make one hundred million. You'll need to keep clients coming back to dominate the market and be one of the top five brands in your niche.
Why is Customer Loyalty Important?
Customer loyalty isn’t just about the money it brings to your business but also about the brand reputation you foster. It is about whether you have client evangelists who tell everyone they see how wonderful your client experience is or whether your clients are driving business away from you.
I was a die-hard American Airlines fan for years and years. My dad flew American so much that he had 5 million Award Aadvantage Miles. My husband had something like two million. But the experience with American Airlines deteriorated to the extent that we just decided it wasn’t worth flying American, EVEN WITH THE LOYALTY POINTS.
Even the first-class experience was terrible. I remember when there was fresh bread and warmed mixed nuts, but now the flight attendants are grumpy, the planes are old, and you can count on significant delays. There isn’t even a reason to fly first class anymore; they have taken the legroom away, put in uncomfortable chairs, taken away the perks, and decided to operate on customer churn (the opposite of good customer service!).
We turned down free trips because the customer experience had degraded so much. Now, we fly Delta (because we live in a hub) or Southwest because it is easy, more reasonably priced, and usually on time. When someone asks me what airline to book, I just tell them to go Southwest.
My dad flew American Airlines, and I did, too. But my son experienced the worst of that airline growing up, and now he won’t ever buy an American ticket. American Airlines lost my business, my husband’s business, and my son’s future business in the span of five years. When you think about it, our lifetime value to the airline as a family could be hundreds of thousands of dollars. Multiply that by families across America.
The airlines don’t care because they operate from too much demand and insufficient supply. So, the client experience is terrible. And the loyalty programs don’t provide enough perks to stay loyal to just one airline.
Coaches and consultants, any small business can’t afford to go the airline route—you need client loyalty.
We must understand that client experience and loyalty can make or break your business. They can make it easy or hard for you. If someone loves your brand, they talk you up, and you get more business. If someone dislikes the experience and has an awful time with your brand, they will advise everyone they know to avoid your programs.
A few years ago, I was in a coaching program where they only checked on me to change my credit card because they tried to charge it, and it had expired! I got into the program from recommendations from two people I respected. Between the time they took the program and when I bought it, the client experience had degraded so severely that no one was getting results, and the leader didn’t care.
Anytime I saw someone considering her program, I would tell them to stay away. I probably prevented her from earning $400,000 in sales over the last two years. I will continue to warn people away from her.
Not only did she lose my long-term client loyalty, but she also lost any sales in my circle of influence: potentially millions and millions of dollars.
Yet, I see her out there doing ads, drumming up new business. She needs lots of leads because she doesn’t deliver. I noticed recently she had abandoned the higher ticket offer she sold me and is now selling a course. Likely because the program got a bad reputation and became impossible to sell.
We can avoid her fate and be in the top five in the market if we do things differently.
Seven Keys to Building Coaching Client Loyalty
1. Be Honest & Transparent to Create Trust & Client Loyalty
Your marketing and client acquisition are the first place to build client loyalty.
Ask yourself, are you vetting your clients before they sign up?
Is this person likely to get great results?
Set up qualifications for new clients before they book with you so clients receive the transformation they came for. When you consider the marketing for your program, make sure you are not overpromising and are delivering at high levels before you expand. Try delivering to twenty people and check the obstacles they face before you grow to one hundred.
Double check your marketing if you are making grandiose promises because they sound good and create sales. Ensure you deliver exactly what you promise, promise less, and overdeliver.
If you are in a bind, get sick, or something crazy happens, be upfront with clients. Be open and honest if you can’t deliver as you promised. Find an alternative way to deliver what you promised or just refund them quickly.
One of my clients experienced a weird situation with a curriculum specialist.
This person went silent after a trip to Mexico and everyone thought she had been kidnapped by the Mexican Drug Cartel! It turns out she just got overwhelmed and didn’t communicate. Be upfront and honest all the way through! We don’t want to have to wonder about the Cartel.
2. Stay in touch with your past coaching clients through multiple channels.
Make sure you keep in touch with clients after they leave your programs.
Try email and, even better, snail mail. Everyone loves mail in the mailbox! Send gifts or notes. Offer them things simply because they have bought from you. Be creative. Go to their events, support their launches, and offer their names when people need referrals. Be their biggest fan, and they will come back to you over and over.
3. Show appreciation for your clients with an unforgettable loyalty program.
Loyalty programs are underused in the coaching industry, but we should make them famous because people will spend more to get loyalty points or achieve new levels!
Think about Starbucks. We all likely have loads of “stars,” so we can get free drinks! We work for loyalty points at hotels. Disney Chase Visa is a popular card because it maximizes the Disney experience. You get first dibs at character breakfasts, first choice on reservations, special unique experiences no one else gets. Think about your clients; what is most important to them? Set up a loyalty club with perks. Give swag no one else can get. “Brand loyalty cash” to use in your programs. Look at loyalty clubs with Ritz Carlton, Marriott, or even Dior. Set your club up accordingly.
4. Stay relevant to your clients as they grow.
This may require you to offer new programs at new price points or an ongoing program they can choose. These programs can be exclusive to clients who have already bought from you and gated from the general public.
You can create exclusive spaces, in-person events, special partnership deals with your network, or simply grow as they grow.
Brush up your skill set as clients move up so you can serve them better. Add perks and bonuses as would benefit them. Try to infuse more delight and joy when they think about your brand. How can you make buying from you easier, more fun, or more rewarding?
5. Make Yourself Available Both Before and After They're Your Clients
One of the best things about consulting and coaching is we can personally know the people we work with and go above and beyond to help them achieve their goals.
If a brand goes above and beyond the work scope to help me, it makes a big impression. I would never ask for free coaching or consulting, but if I have purchased from a brand before and they go out of their way to help me, even when I am NOT a client, you have a loyal fan in me for life! If someone does me a favor before I become a client, I am much more likely to buy and recommend the brand to everyone I know.
Unfortunately, most coaches and consultants are told by the market to never give anything away for free. When they tell you that, ask them how many of their old clients sign up again. If they are below 94% retention, you can tell them you are doing fine and don’t need their help. Do what others won’t do. Stick to the plan and watch your extremely sustainable business grow, year after year, without hiring sales teams or getting loads of leads. And watch as you move to the top of your market.
Key Takeaways to Build Client Loyalty
Customer retention is key to business growth: Acquiring new clients is expensive, while retaining existing ones is much more cost-effective. Loyal clients bring repeat business, positive word-of-mouth marketing, and increased customer lifetime value. Studies show that even a small increase in retention rates can lead to significant profit gains.
Client experience is critical for loyalty: Customers prioritize positive experiences and will switch brands if their needs aren't met. The article uses the example of American Airlines losing a family's business due to a decline in service quality. Building trust and exceeding expectations are essential for fostering client loyalty.
Loyalty programs can be powerful tools: Rewarding clients for their business encourages repeat purchases and strengthens relationships. The article suggests various loyalty program ideas, from points systems to exclusive perks and discounts.
Proactive communication and appreciation matter: Staying in touch with past clients through multiple channels (email, snail mail, etc.) demonstrates you value their business. Sending personalized notes, gifts, or offering them first access to new programs shows appreciation and strengthens the bond.
Grow with your clients: As your clients' needs evolve, offer new programs, services, or tiers of engagement that cater to their changing requirements. Continuously improve your skillset to stay relevant and provide them with even greater value over time.
