You already know that more referrals can translate into more clients and revenue. But did you know that referrals are more likely to become your BEST CLIENTS? It’s true.
In fact, a recent study published in the Journal of Marketing examined 10,000 customers at a German bank. Half of them were referrals, and the other half had become customers through other marketing efforts. Over time, the referred customers proved to be much more valuable because they were 25% more profitable for the bank, they were 18% more likely to stay a customer, and they had a 16% higher lifetime value.
As valuable as referrals are to your business, your profits, and your long-term sustainability, most MSPs take a weak approach (or worse, ZERO approach) to attracting and signing on referrals. In fact, most simply WAIT, HOPE, and PRAY for more referrals to fall out of the sky. That’s not an effective business model.
The most successful MSPs have learned that you can be proactive in securing more referrals. And because it’s automated, you’re essentially building a referral system.
It starts with an inspiring call to action and incentive. After all, simply including a small blurb like “We love referrals” in your email signature won’t move the needle. Instead, offer reasons why actively searching for referrals for you will benefit either their business or them personally.
Yes, bribery works. A simple gift card will entice more clients to hustle and find referrals for you. Research confirms that 39% of people surveyed by the consultancy Software Advice agreed that a financial incentive would make them “much more likely” to refer someone to a brand they love.
Next, with basic marketing automation, you can quickly create a series of emails targeting your clients. Each email can offer a different reason or unique incentive to bring referrals your way. Because the entire email is dedicated to referrals, you’ll be surprised how many clients start helping you out.
Upsell Your Existing Clients
MSPs tend to get marketing tunnel vision. They spend most of their time chasing new opportunities and new prospects for new monthly recurring revenue — and these activities are critical to success. However, if that is ALL you are doing, then you are largely ignoring what is easily considered the lowest hanging fruit: your current customer base.
Unfortunately, many MSPs are hesitant to market to their existing clients out of fear that they are somehow taking advantage of a customer. Rather than carry the mindset that you’re taking advantage of them by selling what they don’t need, adopt the mindset that you’re HELPING them and find ways to add value. The fact is that there are always more products and more services that your clients want and need for their businesses. And because they already know, like, and trust you, it’s usually easy, painless, and actually appreciated when you offer them additional products and services.
Routinely meeting with your clients on a quarterly basis to review their current situation and needs is a key opportunity MSPs often miss. Of course, it’s not the meeting itself most IT companies dread; it’s the nightmare of scheduling, following up, and rescheduling those meetings.
By systematizing your scheduling and follow-up phone calls and emails, it’s just one more thing that’s off your list and automatically done! You’ll know with confidence that every quarter brings new opportunities to turn small clients into bigger clients, all while your MRR grows by leaps and bounds!
Automatically Retain Your Best Clients
Here’s a shocking statistic: Every year, you’ll lose around 14% of your customer base. Of course, the exact statistic varies by industry, but the fact is that most companies lose 10%–30% of their customers each year.
So, why do they leave? There are many reasons, including closing their doors, moving away, or selling the business. However, about 69% of customers leave because they don’t feel you care enough about them or their business.
Too many MSPs think that marketing only involves enticing prospects to become clients. However, you should also include EXISTING clients in your marketing plan to ensure they continue to be happy clients. Yes, prospecting is critical to your success, but so is checking in with your existing customers.
Successful business owners understand that retaining current customers is 6–7 times less costly than acquiring new ones. Losing customers can seriously hurt your team’s morale, productivity, and efficiency. Putting a focused effort on “wowing” your existing clients will maximize your marketing efforts and your profitability.
Generate MORE From Your Clients … Automatically!
Don’t allow the lowest hanging fruit in your business to go unharvested and rot. It’s time to start thinking about your existing client base as your next sizable revenue opportunity. First, existing clients can be a great source of referrals, which can add many more clients and more MRR to your business. Second, you can upsell your existing clients. Meet on a quarterly basis with your clients and offer them new services, software, and products to turn small to medium-sized clients into whales. Finally, through an automated email campaign, you can better retain your clients for years to come.