How To Calculate Your Client Retention Rate

PlumberSEO TeamAs the CEO of a local internet marketing agency I realize that there is nothing more important to the long-term health of my organization than client retention rates (what percentage of my clients do I keep as paying clients month after month). I’m a firm believer that if you provide great service and get your clients results (solid ROI) they will stay with you…and if you wow them, they will refer you to their friends & colleagues. As I network with other local agency owners I’ve come to the realization that many don’t really track their customer retention rates. Perhaps that’s because they don’t feel they have enough clients or maybe, they simply don’t know how.

In this post, I want to share a simple formula for tracking your client retention rate over time and would encourage you to run your retention numbers on a monthly, quarterly and annual basis. If you have a team be sure to share this number with them so everyone can get on-board with maximizing customer retention.

Formula for calculating client retention rate:

This gives us CRR = ((E-N)/S)*100

1. Number of clients at the end of a period – E

2. Number of new clients acquired during that period – N

3. Number of clients at the start of that period – S

You can set up a simple excel sheet that looks something like this:

January February March April
Number of clients at end of period 75 79 89 102
Number of new customers acquired during period 5 3 13 16
Number of customer at start of period 73 78 79 89
Retention Rate 95.89041096 97.43589744 96.20253165 96.62921348

** The Formula for the “Retention Rate” cell should read something like =((B2-B3)/B4*100)

Why Track Customer Retention Rates?

hamsterIt’s very easy to focus on “new client acquisition” and set aggressive growth goals…but if you are loosing clients as fast as you are selling them then your not getting anywhere. Your like a hamster on a hamster wheel. You need to focus just as much (if not more) on retaining your existing clients as you do on getting new ones.

I’ve found the old axiom “what get’s measured get’s done” to be very true. If you and your team are measuring retention rates on a consistent basis then your overall client retention will improve.

Are you tracking client retention rates? Is this formula helpful? Please post your thoughts and comments below.

 

{ 0 comments }

Who - The A Method for Hiring BookI am truly blessed to say that our company has grown at a very nice pace over the past 4 years and we are in the thick of growing & expanding our team. I believe that having the right members on the team is probably the most important aspect of our company going forward. In order to ensure that I am taking the best steps to attract and qualify the best talent I read the the book “Who: The A Method for Hiring” by Geoff Smart. It was a great book full of insights on how to hire the top talent for your team.

Below is recording of my key insights and findings from the book:

Pre-screening call

One of the biggest insights for me that had a direct impact on our hiring process was the notion of a “Pre-screening Call” prior to the interview. We invested hours interviewing many candidates and wasted alot of time. The book suggested having a structured “pre-interview” or “pre-screening” call prior to inviting a candidate in for an interview. Here are the questions they recommended for the pre-screening interview:

  • What are what are your career goals?
  • What are you really good at professionally?
  • What are you not so good at or not interested in doing professionally?
  • Who are your last 3 Bosses and how will they rate your performance on a  scale from 1-10 when we talked to them?

Doing this saved us a lot of time and ensured we were only meeting with prime candidates.

Hiring Score Card

The book also referenced a “Hiring Score Card” that can be used to create clarity around what the role is, what it is intended to accomplish, what the team member will need to be good at, etc. I searched high and low for a “Hiring Score Card Template” but could not find one. I wound up create my own (highly simplified) version. You can access my version of the hiring scorecard below:

 

The “Top Grading Interview”

In Brad Smart’s unique Topgrading interview, you start by asking about College (if they attended) with simple ice-breaker questions like: how did you fit into school?; high/low points?; any awards/achievements?; greatest influence?; hold any jobs?; etc.

For the job-related questions, they suggest the following:

  • What were you hired to do?
  • What accomplishments were you most proud of…and what were your low points?
  • Who were the people you worked with and how would you rate them and they rate you
  • Why did you leave that job?

You should select a set of questions that feel right for you, and then keep them standard for all candidates.

This type of topgrading interview should take about anywhere from 2 to 4 hours depending on how experienced the candidate is.

The Reference Check Interview

The book emphasized the importance of checking references. Here are a few questions they recommend for those calls:

  • What was their role?
  • What were ups and downs of their performance?
  • How would you rate their performance on a scale of 1 to 10?

Remember, people don’t like to and in some cases won’t give a negative reference. Be sure to listen to the non-spoken indicators. If all they are willing to do is confirm employment…they probably did not consider that individual to be an A Player.

In summary

I found the book to be a great read and feel confident that it will help continue and grow our best in class team.

PlumberSEO Team

{ 0 comments }

PlumbeSEO Quarterly Planning SessionAs a company we made a practice of conducting quarterly planning sessions. Even when it was just me and my business partner Dean we would block out half a day to set our goals for the following quarter (90 days). During these sessions we pick two personal and two business goals. Initially we did this as part of our ActionCoach program with our business coach John Layzell.

We have found this to be an extremely powerful process. As the company has grown it became more conducive to run these sessions as a team internally rather then in a group setting.

It’s so motivating and empowering to know you are working towards a specific goal for a finite amount of time and that you will be “STOPPING” at the end of that time frame to access your progress. Did you hit the goal? Why or why not? And then press forward with a new set of goals going into the next 90 days.

Planning sessions as a team

We grew from just the two of us; to four; and now we have twelve full time employees. It’s been amazing to see how powerful this process is for the team dynamic. We come together as a team and think about the next 90 days, set our personal and business goals and then hold each other accountable for completion. Everyone wants to be part of something bigger than themselves and grow as a person. Norton, our Operations Director said “These sessions are extremely motivating. Get’s everyone on the same page and helps us all connect on a deeper level”.

Here is the process we follow:

Set the stage

Start by explaining the value and power of Goal Setting and share some strong examples of goals achieve (both personal and business). As an entrepreneur you might be surprised to learn some if not all of your team members (even highly educated and motivated people) have never really learned about or practiced goal setting. The most powerful case for goal setting is the Harvard Goal Setting case study:

In 1979, interviewers asked new graduates from the Harvard’s MBA Program and found that :

  • 84% had no specific goals at all
  • 13% had goals but they were not committed to paper
  • 3% had clear, written goals and plans to accomplish them

In 1989, the interviewers again interviewed the graduates of that class.  You can guess the results:

  • The 13% of the class who had goals were earning, on average, twice as much as the 84 percent who had no goals at all.
  • Even more staggering – the three percent who had clear, written goals were earning, on average, ten times as much as the other 97 percent put together.

(Source:  from the book What They Don’t Teach You in the Harvard Business School, by Mark McCormack)

Let the planning begin

We like to start with personal goals. The fact is, we work to live not live to work. So setting personal goals that move us forward as individuals will have a deeper emotional impact than personal goals.

  • Let the team know that you will give them 5-7 minutes to think about their personal goals for the next 90 days.
    • Personal goals can be anything you want to accomplish in your personal life. Loosing weight, dropping body fat, learning a new language, taking a cool vacation, increasing savings, etc.
    • Remind your team to keep the goals SMART. Specific, Measurable, Achievable, Results Oriented and Time Specific (E.G. Will be accomplished by the end of the quarter).
  • Have everyone on the team say the goals that they picked and why they want to accomplish those goals.
    • Have someone on your team be the “transcriber” to write out the goals on a master sheet. This way you can have a record and circle back to it next quarter and see how everyone did.
  • Let everyone know that you will give them another 3-5 minutes to plan out what they need to do (specific actions) to accomplish those goals.
    • E.G. Work out 3 days per week and cut out carbs to lose those 10 lbs. Sign up for a course on Spanish so that you can learn that new language.
  • Have everyone explain their plan of action for accomplishing those goals

Now the personal goals are taken care of, the next step is to plan the business goals. Every business is driven by Revenue & Profits which tend to be driven by New Sales, Client Retention / Repeat Business & Cost Control. The business owners / sales team should come to the meeting prepared with some specific company wide goals.

  • Sales Goal – In terms of new clients / revenue
  • Retention Goal – Loose no more than “x” clients
  • Profitability Goal – This one you can choose to share with the entire team or keep within the ownership

Sharing these goals with the team gets everyone on the same page as it relates to the direction of the company because everyone will be working toward a common goal.

Each member of your team should come up with two “business” goals specific to their position that will help them contribute to the overall company goal.

  • Let the team know that you will give them 5-7 minutes to think about their business goals for the next 90 days.
  • Have everyone on the team say the goals that they picked and why they want to accomplish those goals.

That’s it. You now have a nice formula for quarterly team planning sessions that will move your entire company forward. Even if you are a one or two-man show, following this process will have a profound impact on your company.

“Without goals, and plans to reach them, you are like a ship that has set sail with no destination.” -Fitzhugh Dodson

This practice will have great impact the first time you do it, but the true power is when this is done on a consistent quarterly basis. It gives the entire team (and you) a destination to drive toward. Knowing that you are going to have to report on your progress at the next quarterly session creates a great scene of urgency and accountability.

I’d love to get your feedback. What do you think? Do you do something similar in your company? What do you think should be added to the process?

{ 0 comments }

Google Authorship Webinar

I conducted a webinar last week on the topic of “Google Authorship” – what it is, how it works & how to set it up. Check out the replay below:

To access the step-by-step instructions go to http://plumberseo.net/authorship

Post your feedback and follow up questions below:

{ 0 comments }

Josh Nelson's Favorite Business & Marketing BooksI am a big time believer in the notion that Formal Education will get you a job, Self Education will make you wealthy. Over the years I have read (or listened to) many books on Sales, Marketing, Business & Self Development. Below is a list of my favorite books based on the impact they have had on me:

  1. Self Development / Mindset – Secrets of the millionaire Mind by T Harve Eker
  2. Sales / Business Development – Book Yourself Solid by Michael Port
  3. Sales / Business Development – The Ultimate Sales Machine by Chet Holmes
  4. Online Marketing – Inbound Marketing by Brian Halligan
  5. Self Development / Mindset – Rich Dad Poor Dad by Robert Kiyosaki
  6. Business / Accounting – Simple Numbers, Straight Talk, Big Profits by Greg Crabtree
  7. Time Management – Eat That Frog by Brian Tracy
  8. Business Management – The eMyth Revisited by Michael Gerber
  9. Time Management – Getting Things Done by David Allen
  10. Self Development / Mindset – How to craft a world-class life by Robin Sharma (Speach not a book)

Other great books that I enjoyed and had a solid impact:

  • The Answer by John Assaraf
  • All the NO BS Marketing books by Dan Kennedy
  • Made to Stick by Chip Heath
  • Think & Grow Rich by Napoleon Hill
  • How to Win Friends & Influence People
  • Let’s Get Real or Let’s Not Play by Mahan Khalsa
  • All the sales books by Jeffery Gitomer
  • Customer service is worthless customer loyalty is priceless by Jeffery Gitomer
  • The Psychology of Sales by Brian Tracy (any thing by Brain Tracy is solid)
  • SPIN Selling by Niel Rackham
  • The Success Principals by Jack Canfield

I’m not a great reader and prefer to listen to books. If you not familiar, I highly recommend www.Audible.com. It’s a website where you can download audio books a play them directly from you mobile phone. I drive about an hour every day so my commute turns into great learning time.

What books have had the biggest impact on you? Post your comments below.

{ 0 comments }

As part of my ongoing learning and development process I enrolled in Michael Port’s 4-Week Book Yourself Solid Intensive program (which I highly recommend for any entrepreneur looking to grow their service based business). In the program he touches on a lot of great ideas but the one that really resonated with me was the concept of “Always Have Something To Invite Them To”.

Josh & Dean - PlumberSEOThe idea is, once you have a tight sales process with a steady flow of new leads coming in to your business from your idea target market you are going to need a well defined process for converting them from prospect to client. Some will do business with you right away but others will not. If you don’t have an ongoing (new) thing to invite them to you are going loose your relevance. Michael encourages you to put on a live (not pre-recorded) group event either via webinar or live meeting.

I’ve been doing weekly webinars for quite some time but they have all been pre-recorded as a simulated live experience. The problem with that approach is that you loose the live interaction and the NEW / Fresh element of the event. There is NO reason from someone to attend that event again in the future. By having a new event with fresh content on an ongoing basis you have the ability to build community and have live interaction with your audience. Initially I was concerned that this would be too time consuming (coming up with a new piece of content, conducting a live meeting, promoting that meeting, etc) but as a thought about it I realized the following:

  • I need to be coming up with and creating fresh content on an ongoing basis regardless. Having a scheduled weekly meeting would force me to create that content that can then be leveraged in a number of different ways in addition to the weekly session.
  • I conduct 1-2 hour evaluation sessions with my prospects on a daily basis. A live webinar would not take any longer than any one of these sessions

So I decided that I should give it a try and run with the concept. I put together the following email blast and sent it out to my customer base:

Subject: Live weekly Plumbing & HVAC Internet Marketing Call

Starting next week on Wednesday June 26th we will be conducting live weekly Plumbing & HVAC Online Marketing calls. These will be short interactive web-based meetings (20-30 minutes) covering a specific & important internet marketing or general marketing topic pertaining to your Plumbing or HVAC Business. During the call we will cover 1 core topic (examples below) and then open up the line for questions. The initial set of Q/A’s will be targeted to that specific topic but then will be open to any of your most pressing / current internet marketing or marketing related questions. You will have live access to Josh Nelson (Author of the Complete Guide to Internet Marketing for Plumbing Contractors) during the call so bring your questions and expect our best answers.

The online marketing world is a constantly changing and evolving puzzle. Things that worked even 3 months ago could now be hurting you. Remain up to date and upto speed with the latest trends and get your most pressing questions answered.

Below is a list of the topics that we indent to cover on these calls over the next few months. We would love to get your feedback. If there is a specific question, topic or trend that you would like for us to cover, please send a quick reply with your suggestion.

  • Google Authorship – What it is, why you need it and how to set it up
  • How to merge you Google+ Local listing with your old Google Places LIsting
  • Plumbing Keywords – Updated data regarding the most frequently searched plumbing & hvac keywords
  • The latest Google Algorithm update (Penguin / Panda) and what it means for your SEO Strategy
  • Video marketing for your Plumbing or HVAC Business – How to’s, examples, etc
  • Website Conversion – what your website MUST have to convert effectively
  • 2013 Q4 Marketing Plan – What you should be doing to market your plumbing business online in Q4
  • Mobile Marketing – Why it’s important, how to set it up
  • Facebook marketing – what you should be doing to maximize effectiveness
  • Re-Targeting with AdWords – What it is, why you might want to do it & how to setup simple re-targeting campaigns to follow your web visitors online as they browse the web.

Register now at www.plumberseo.net/weekly

 

There were a few unexpected benefits that came along with doing this.

1. Having a scheduled weekly session forces me to come up with new / fresh content on a weekly basis (new content is essential), a compelling reason to touch everyone in my email list on a weekly basis, and creates an opportunity share a great live experience including true q/a at the end of the session with my prospects.
2. The content from the webinar doubles as great content for our site and online properties (blog post, video recording of the webinar on YouTue and audio recording for our podcast). This pulls even more traffic and value from the same content.
3. I then have another compelling reason to email the database because they all want to receive the video with the replay (if they attended or not).

While I did not have any “direct sales” from people on the webinar…I had 2 new client (who had been lingering on my email list for years) reengage with me as result of the email communication promoting the upcoming weekly training.

This is what I put out to promote the event’s and where I am driving people:

Press Release about weekly events -http://www.prweb.com/releases/2013/6/prweb10871764.htm

Landing page for weekly events - http://plumberseo.net/weekly

My first session was on Google Authorship. Here is how I was able to re-purpose that content:

Blog Post - www.plumberseo.net/authorship
YouTube Vidoe - http://youtu.be/SVAoz-t4fDI
Podcast - https://itunes.apple.com/us/podcast/plumber-seo-internet-marketing/id471689306

Of course a separate email goes out for each event with a direct link to the GoToWebinar registration page.

I’d love to get your thoughts / feedback on this and your experience with the “Always Have Something To Invite Them To” concept. Post your comments below.

{ 0 comments }

Readers Are Leaders

Clic - PlumberSEO LibraryWe recently setup library in the office filled with the latest books on Internet Marketing, Marketing, Customer Service and Self Development at the office. We want to encourage our team to read and stay up with the latest trends so we established the “Readers Are Leaders” initiative.

As part of this program our team can check-out books and get credit for reading these books. Each book is with worth 5 points. Every time a team member earns 25 points they can redeem them for a $25 gift card at a store of their choice. It’s been a fun program and the team has really embraced it. Knowledge is power and the ROI of having an engaged, learning, cutting edge team can’t be beat.

Let me know what you think. Please post your comments below.

I created a follow up post with a list of the books that have had the biggest impact on me over the years. Check out my list of the Top Marketing, Business & Self Development Books.

{ 0 comments }

We have been blessed with success and rapid growth in our Local Internet Marketing business and as result have been asked to help train other online marketing entrepreneurs. Over the past few months I have been interviewed by a number of top internet marketing educators and conducted training sessions on how we positioned, marketed and grew our company so quickly. Below is a recoding of our recent interview / presentation for Scott Gallagher and the Local Marketing Source members.

If you would like to download my report on how to grow a successful local internet marketing services company by dominating your niche, you can download the guide here.

{ 0 comments }

I put together this presentation for the Local Income Lab members on  How To Establish Expert Status in your Niche through Speaking & Authorship. Check it out:

As part of our process of obtaining expert status in the Plumbing & HVAC Space we wrote and published our book “The Complete Guide to Internet Marketing for Plumbing Contractors” available on Amazon.com. It has been instrumental in positing us as the experts in this space and opened up speaking opportunities at the various industry associations. We were able to move from “chasing prospects” to being sought out by our top clients.

On this video I share how he we have grown our local internet marketing agency by establishing ourselves as the experts in our niche. On the video I cover:

  • Why you need to choose a niche (Area of specialty)
  • How to establish yourself as THE expert in that niche
  • Why Authorship is the ultimate strategy for obtaining expert status
  • How to publish your book on Amazon.com with ZERO upfront expense
  • How you can leverage that book to obtain instant expert status, get speaking engagements, become magnetically attractive to your target vertical and explode your growth

You can download the guide the I reference in the video by going to http://joshnelsonblog.com/niche

{ 0 comments }

Interview with Scott Gallagher

I was honored to be interviewed by Scott Gallagher of Local Marketing Source for one of his recent faculty calls. We talked about how we went about growing Clic – PlumberSEO and the strategies that have worked well for finding customers, building trust, providing our clients results and maintaining a happy and profitable client base.

Check out the interview:

Please post your comments, questions and feedback below. I would love to hear from you.

{ 0 comments }