Signing a new client is great, it is rewarding, validating, and exciting. Generating new leads and converting prospects is huge part of staying operational but developing strategies to retain customers is arguably more crucial than converting leads. Repeat customers typically account for 65% of a company’s current business so, a focus on retention is beneficial for property management companies looking to expand their portfolio. After you bring a new customer on board the goal becomes oriented around keeping that customer, but only about 32% of executives say that retaining current customers is a priority.
Competitive
To stay competitive and effectively expand your portfolio, it’s essential to keep existing customers satisfied and loyal. Driving retention rates in conjunction with attracting new customers allows companies to increase their market share and expand their customer base instead of simply maintaining the same number of customers through sales alone.
There are hundreds of thousands of active property management companies operating across North America. In the US alone the industry has grown 2.5% over the last 5 years, meaning property management companies are no stranger to competition. Improving retention stops customers from taking their business to competitor and strengthens your foothold in the industry.
Marketing
Repeat customers are customers who are loyal and are content with your service therefore they are act as free or cost-effective marketing for your business. When a customer chooses to do business with one organization over an extended period of time they can attest to the quality of service through testimonials, online recommendations, and references to drive new business. 28% of people agreed that word of mouth marketing is the most important factor in deciding if they engage with company. Long standing business relationships offer your company marketing material that is more impactful and less costly than traditional advertisements. Studies show that word of mouth marketing can drive 5X more business than paid media.
Cost-Effective
Raising retention can help improve an organization’s bottom line by reducing money spent on marketing and sales. Studies show that just a 2% increase in retention can have the same effect on profitability as cutting costs by 10%. Keeping customers loyal inherently reduces operating costs by minimizing the time spent on qualifying leads, setting up new properties and accounts in your property management software, or signing agreements. Extending business relationship is less costly because it requires less marketing or less sales efforts, instead all it requires is exceptional delivery of the service your organization offers.
What increases retention?
Research shows that about 68% of customers defect to competitors because they feel that their original service provider was indifferent to them. So, to amplify your retention numbers its important to ask for customer feedback and adjust accordingly when possible. Evaluating your customers’ response to your team and strategies enables your operation to remain in tune with your customer base and deliver the level of service that’s expected or beyond.
Working with the same customers makes the job easier and smoother, overtime your team and customers can establish a relationship and understanding that minimizes stress, increases trust, and drives loyalty.
