Episode 30: Client Retention for Cleaning Companies. Do You Know Your Numbers?

Learn the formula for tracking client retention, acquisition and attrition for your cleaning business.

To use the calculator mentioned in the video, go here: Customer Retention, Acquisition and Attrition Calculator

Do you know your client retention rate? Are you happy with it? If you're not happy with your numbers, what are you doing to do to change it? Post your comments below.

Episode 30

If you are a business owner, then one of your goals is to grow your business.  But many of us are so busy trying to gain NEW clients, that we often times forget about the importance of retaining our EXISTING clients.

If you are spending all your time trying to find new clients and little or no time on retaining your existing clients, then you'll have a hard time increasing sales and profits. Why is that?

Well first of all, as you all know, the cost of retaining existing clients is less than the cost of acquiring new clients. And that is because existing clients already know your company and your services, so they are more likely to buy from you again.

Secondly, if you are losing existing clients, then you are always playing catch-up with your new clients -- they'll be filling a vacant spot left by the one that left, and it will always feel like you can never get ahead -- and it's true; you WON'T be able to get ahead. Another thing to keep in mind is that you will only retain clients if you can keep them loyal and motivated to resist the competition. If your clients are merely SATISFIED with your service, they may still walk away if someone gives them a better offer. So besides creating a marketing strategy, it's a good idea to spend some time creating a customer retention strategy. Your strategy may include surveys, follow-up phone calls, in-person visits, newsletters, and customer loyalty plans. Find out what it is that retains your current loyal clients, and do more of that.

Okay, once you have committed to coming up with a client retention plan, you need to start tracking your customer retention rate. So let's take a look at how to measure customer retention. First you'll need the number of clients you had at the beginning of the year. Next you'll need the number of clients acquired during the year. And finally you'll need the number of clients you had at the end of the year. Let's say you had 75 clients at the beginning of the year; you added 20 clients during the year; and you ended the year with 80 clients. Your retention rate is 80%. Here is the calculation formula: (C - B) ÷ A x 100.  In this example,  the numbers would look like this: (80 - 20) ÷ 75 x 100 = 80%. So you know you had an 80% retention rate. You'll want to start tracking this every year, to make sure you are either maintaining a good retention rate or improving your retention rate. If you find your numbers decline, well then you know you have work to do.

Two other things you may want to start tracking in your business is acquisition rate and attrition rate. Acquisition rate is the percentage at which a company reports growth. Attrition rate refers to the percentage of customers that have discontinued services with a company.

Here is a screenshot of the same example I just gave you, using an online calculator that will give you all three numbers at the same time. In this case your retention rate is 80%, your acquisition rate is 26.67%, and your attrition rate is 20%. And at the bottom, the calculator also gives you the total number of customers lost during the year, which is in this case is 15. It's pretty eye opening, isn't it?

If you're not giving any thought to these numbers in your cleaning company, then I encourage you to start!  If you really want to increase sales and profits, you need to know your customers. And understanding the numbers will help you focus your time and effort in the right place. What I'd like to know from YOU is, whether you know YOUR client retention rate and if you're happy with it. And if you're NOT happy with it...what are you going to do to change it? All you have to do is post your comments below the video at CleaningBiz.tv.