CLIENT RETENTION STRATEGIES IN THE MIDST OF GLOBAL ECONOMIC TENSION

As economies are trying to recover from the setback caused by the coronavirus pandemic, the Russia invasion of Ukraine happened and there is no indication of how long the ensuing conflict would last, or how deep its effect is going to affect global financial markets. According to the IMF report in April 2022, global growth is projected to slow down from an estimated 6.1 % in 2021 to 3.6 % in 2022 and 2023.

Russia and Ukraine are producers of key items like wheat, minerals and energy resources. The war however is affecting fuel and food prices, hitting vulnerable populations in low-income countries the hardest and resulting in sizeable economic and financial shock.

In this torrid time, understanding the importance of client retention to small and medium-sized professional service firms, especially in less developed countries is critical to sustaining and maintaining adequate returns amid economic instability as a backdrop to the Russia and Ukraine saga. The path to growth and expansion, for all for profit-oriented enterprises is retaining its current clients and expanding its customer base and market share. This is a universally accepted strategy of business development and growth strategy for profit maximization and business expansion.

According to Gerpott et al (2001), client retention is the continuity of a business relationship between a firm and its customer. It involves repeat purchase behavior. This is quite straight forward, and research has shown that retaining existing clients is more cost effective than attracting new ones and the existing client you have good relationship with is likely to recommend you to other clients.

As financial advisors, it is imperative to the survival of one’s firm to retain existing clients which may seem like a daunting task at first but, the four simple highlighted tactics below would ensure your success in this regard if applied correctly.

  1. Gain Valuable Feedback

“Do you make your clients feel valued?”

Relating with clients does not have to end immediately after the services have been provided. In essence, feedback is important in retaining and winning over customers. This can be as simple as putting up a poll on your social media accounts or sending surveys to clients on services rendered to them.

2. Social Media Engagement

Leveraging social media is one of the most effective client advisor prospecting ideas, if you are not already following your customers on various social media platforms, it is important to reconsider. This will give you an easy means of keeping in touch with them as well as provide you with valuable insight into their interests and proclivities.

3. Transparency

Establishing trust can simply be accomplished by being transparent with what you do for the client. Transparency and trust are two of the most scrutinized factors in the financial services industry. There has been horrific scenarios of people losing their entire life savings because an advisor made decisions that wasn’t in the best interest of their client. Giving clients the opportunity to ask questions for them to feel comfortable with you handling their books is of utmost importance.

4. Good and Constant Communication

The foundation for all healthy relationships begins with frequent communication. One of the biggest reasons why clients are unhappy with their current advisor is that they feel that they are not being properly heard. This type of communication can quickly turn a relationship sour and lose you multiple clients in the process. Other great ways to ensure your clients keep you in mind can include sending monthly email newsletters, postcards and regular phone calls. It is also important to set expectations early on so that there are clear deliverables on both sides of the relationship.

The prevailing economic situation is a force majeure to businesses around the globe. This necessitates financial advisors to pay close attention to the important business growth factors within control. The saying by Nigel Sanders is a mantra that could become the game changer for businesses at this time:

“Every client you keep, is one less that you need to find”.