A group of ex-client management students reporting on this topic once said that it is similar to a love relationship… when you are single you tend to “collect and select”, but when you have found the right partner you work on that relationship and try to make it last. It’s quite a practical and simplistic comparison, yet somehow it does ring true…
Love this analogy. The only difference is that people might be cheated in love sometimes, yet might still be tolerant of the other; while as an agency we can practice “polygamy” with multiple clients, however, mistake might occur once and for all.
I think retention is more important. Because 80% income is from the recent client, 20% is from new client. Therefore, if you want to have the high income in your agency, keeping client is the better choice.
I think it depends on the situation and the purpose of maintaining the relationship with your client.
From my point of view, both are important, however, client retention is more important for almost cases. The obvious thing is that client acquisition is really necessary for new company/ agency, however it is just a very first basic step, and the company will not be successful if they have a lot of clients without building up and remaining the close relationship with them.
Having good relationship with clients not only helps the company work effectively and easily based on the mutual understanding between each other, but it also gives special chances to extend the business and other relationships for both clients and company.
Let’s imagine that your company has a huge number of clients but you do not have a close relatioship with them. All you could receive are small contracts, unsure about keeping promises from the clients, short term business,etc and that’s all. Whereas the situation will be reversed if you have good relationship with them ( although you don’t need to have a lot of number of clients). What you can earn are cooperating and expanding the business, having trust from them and they will help introduce other potential clients for your company.
Interesting comments guys… keep it coming! I guess its always a debate with questions that ask you which came first, the chicken or the egg?
New client is necessary, but existing client with good relationship will give agency much more new clients.
In my opinion, client retention is more important for most of the cases except for start-up agencies or those looking to fill up their excess service capacity.
Building up good relationship with clients not only do save us from having to look for new ones but also boost the efficiency through the mutual understanding established.
The Pareto rule says that 80% of our profit comes from 20% of our customers anyway.
thanks bao… tick the box to vote!
I believe both are important, without acquisition, we have none to maintain. Without retention, we will never be successful.
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