As I was finishing up a podcast convo with a fellow founder, I mentioned how larger clients focus more on retention and not just new business.
Naturally, I got asked, “How do you optimize for retention?”
Here’s the thing – retention is simply a reflection of your operations:
• Personnel skillset
• Fulfillment processes
• Client management and communication
and it boils down to a simple equation:
cLTV = relationship x results
But if you want to nerd out (like I do) and dive deep to truly optimize for retention, you need to look at the entirety of your business model:
cLTV = ($1 x value of problem being solved) x rMonths (((client experience > client expectations) + onboarding^ small wins) + Ongoing Communication x New Scope Opportunities) ^ RelationshipLevel
And manage your variables knowing they are influenced by the depth of your client relationship:
1 – The value of the problem you solve to the market
2 – The crafted client experience with you and your team
3 – Professional communication, scoping and expectation setting
4 – A dopamine-infused onboarding experience to delight clients
5 – A strategic ongoing communications plan to deepen client relationships + find new opportunities to solve anticipated client problems (some people call these upsells)
From there, you can scale:
CAC < cLTV
If you need help solving for cLTV, reach out.