The value of collaborating to ensure client retention
Why client retention is so important
The age of the customer has meant those working in professional services have to do all they can to keep hold of their valuable clients. With the increase in competition for law firms, from other law firms or new law, clients are now inundated with choice, meaning client retention is increasingly important. Businesses in general benefit immensely when they have higher client retention with it being 6 to 7 times cheaper to retain an existing client than it is to attain a new one (Bain & Company). Additionally, Gallup found businesses focusing on their client engagement and retention have 85% higher sales growth than their competitors.
Improving engagement and building relationships with clients, makes them feel invested in the firm, thus helping to ensure their loyalty. For this to be attainable, firms need to alter their client interactions to increase engagement and collaboration. If this is successful, not only would the firm have high client retention, but also clients who trust the firm. Trust is key as many clients then become loyal ambassadors by endorsing your firm to prospective clients. For mid-sized firms, client engagement is especially important as competition to reduce client fees is high, making client retention vital for success. With this in mind, it’s not surprising firms excelling in client engagement and retention find the majority of their new business comes from existing clients.
If we consider the Psychology behind a client’s decisions, it is much easier to understand why it is so important to build a trusting relationship with them. The human brain is composed of two hemispheres; the right hemisphere being responsible for emotions and intuition, whereas the left deals with logic and facts. If a client is only focused on logic and facts, they will judge the company based on its size or how expensive their services are. This is where business is lost, as clients tend to favour larger companies who offer their services for cheaper fees. Whereas, if you focus on connecting with the emotional part of the client’s brain, they are more likely to trust you and stay loyal, rather than switching to a cheaper option.
Why collaboration is important
Research found 24% of firms aren’t collaborating enough when engaging with their clients and consequently 27% admitted they had lost business due to missed deadlines. Effective collaboration is key to building trusted client relationships for any professional services firm. How a firm works both internally and externally is a direct identifier of how successful you are in delivering your client promise, building trust and retaining your clients. Without successful collaboration, you will find your business’s client retention being low and having weaker client relationships. One collaborative software company found 70% of client loses are the direct result of poor collaboration and 18% of clients leave due to a lack of transparency. This means that firm-client relationships are largely dependent on a firm’s ability to collaborate and without collaboration, it is hard to build them.
Strong client relationships, built with collaboration, means it’s easier to solve problems as clients are more receptive to advice and assistance, making raised issues less frustrating for both parties. In addition, Heidi Gardner, found empirical research showing firms who collaborated correctly, achieved higher margins, had higher client loyalty and access to more lucrative clients.
How to ensure client retention with collaboration
Our extranet and collaboration portal, Hubshare, is perfect to suit your firms needs and to ensure high client retention. With Hubshare you can stay in touch with your clients from anywhere, whenever you want, allowing for fluid collaboration. It also ensures your business’s productivity is maximised with a dynamic portal, empowering your partners to collaborate with clients and build those all-important relationships. Hubshare can provide your business with all the tools you need, including granular rights, customisable portals, full DMS/PMS integration (such as with NetDocuments, iManage, eDocs, VisualFiles, Worldox), secure document sharing and a centralised portal where you can collaborate.
Not only do firms benefit from substantial financial benefits when they work hard to collaborate with their clients to improve client engagement, but they increase client retention and become a trusted advisor. Invest in Hubshare today.