Is There a Formula For Customer Service & Client Retention?

Laura Severn, a Director LMP Law, does the maths for us to see if there's a magic formula for holding on to your clients...

Any client, customer or consumer loves to feel looked after. We all want to feel listened to and we are beings hoping to receive the best answer to any questions we ask. Is there a formula for retaining our customers?

The Formula

There are various leadership and training courses we can all go on as businesses to understand the psychology of client behaviour and research up on the Retention Rate Formula:

xx Clients at the end of the period

Minus xx Clients Acquired During Period

Divided by xx Clients at Start of Period

Multiplied by 100

= Client Retention Rate

Let’s use an Americanism here and say that we all have customers or clients that “churn”, by this we mean that they might cancel a subscription, may not close a deal on a contract, might not renew their contract with you…etc.

Here’s an example of how the formula would work with churning:

You have 44 clients, you gain 12 new clients, and 13 clients churn so...

( 44 - 12 ) / 44 ) x 100 = 72% retention

We are not all sales and funnel people though are we? So, even though this formula is fabulous for some of the Myers Briggs’ analytical types….! It’s not for everyone. Which is why yes, it’s great to understand a formula, but from a thought perspective, what else is there we need to learn in business for customer service and client retention?

Client & Customer Return On Investment (ROI)

You’ve all probably heard of the Pareto Rule? Or 80/20 Rule as some like to say. I think that LMP Law and all our colleagues probably follow this rule without actually researching it too much, maybe we should!

It’s the rule of retaining 20% of your clients who will therein make 80% of your profits. So looking after your clients and customers SHOULD be a no brainer, not just from an ROI perspective, but from a brand management and PR angle. No one wants to be the business where no one comes back.

In 1906, an Italian by the name of Vilfredo Pareto made an interesting observation that about 80% of Italy’s land was owned, at the time, by about 20% of the population. It’s a fascinating concept and when applied to, well – pretty much anything, if thought about effectively it can work as a compelling advantage.

In management — 80% of your value is going to be created by 20% of your employees, and 80% of your problems are going to come from 20% of your employees (not necessarily the same 20%), therefore having great leadership that looks after their employees and offers them a sense of empowerment for their loyalty will of course be a knock on effect for your business.

Happy employees will want to work hard, look after their clients and so it goes.

Life In Property

Working in property law sees its share of legislation change, employment law updates, trials and tribulations. Working with businesses and individuals to ensure their lives either at work or their lives living in the “Land of Leases”, the team at LMP Law have to make sure that what we do really has an exceptional impact for the better.

Lawyers, per se, are often seen as dry and unwavering, addicted to risk aversion, however, we have to really know our clients and our clients’ businesses inside and out to make sure we mediate any external factors that might come into play.

Part of our model is to actively listen, get to know, grab that coffee as our property law life means we love being your “in-house” go to law friend.

We can’t speak for other lawyers, managing agents, recruiters or organisations in property and the leasehold sector, but what we do know is that we are proud of our client retention, it makes us grow with our partners and manage any problems before they happen. It’s all about maximising our efforts and minimising our losses!

Freeholders want to like and trust their managing agents, the managing agents need to trust and get on with their lawyers. We all want to be or at least feel, appreciated and valued. If we feel these emotions, we are more likely to work harder and excel better.

Flat owners can vibe this from seeing contractors and managing agents themselves. Seeing disgruntled contractors or never hearing from the landlord or managing agent gives off a vibe of nonchalance and therefore, we’ve found in working in property law for over 25 years, that there is much less likelihood of a dispute when there is open communication and transparency.

Customer/Client Experience

We have found that our clients (customers) have specific needs and the team at LMP Law work hard to fulfil these requirements. All business owners should set and meet their customers’ expectations, cause you’re empowering them.

According to the Harvard Business Review, “customers want to be empowered, not controlled. You have to act with empathy.”

As lawyers we need to BE in control but we are not controlling. We are advisors, and we will always do our due diligence in offering the very best in a situation. We are regulated, so we are controlled, per se, by the governing body, however, our clients are humans and each person within block management will need to instruct us on the advice we have given them, again – it’s about trust, together with professionalism.

How Lawyers Can Help Block Managers (So Their Leaseholders Are Safe)

Know the lease terms. We all know that blocks of flats can be incredibly busy behind the scenes. Often, each home within a block of flats might have a different lease to the home adjacent to it. As a block manager, we would advise you to look at the lease, communicate with the owner and check the requirements (especially what you are required to do for them).

Please remember to enforce your lease terms. Help your tenant understand the lease – it’s not just a piece of paper given as a formality, it’s about educating them so there are no disputes later down the line.

Health & Safety

More so than ever with the block management industry being in the public eye, it is PARAMOUNT that you, as a block manager, know your responsibilities for making sure the site complies with health and safety law and that all maintenance works are carried out by approved contractors. The safety and security of your tenants and leaseholders must be key and that communication itself is wonderful for client and customer retention. We all like to feel safe and valued.

Insurance

Remember what you must do regarding buildings insurance. Without the right cover if there is a problem, it could lead to devastating financial consequences and litigation.

Risk Assessment

Including fire safety. Get friendly with your local fire authority! Listen to their advice and take action.

Conclusion

We all have our own personalities and our own business models for working with each other in the property sector. It’s a friendly and extremely satisfying industry that has its pits and falls.

The team and I at LMP Law are aware of the speed of change and the importance of being proactive rather than reactive in these property law times. We would advise all our colleagues, clients and their clients to keep on top of legal changes, keep up to date with property law blogs, keep reading Flat Living Mag and call us if you’d like to grab that coffee and get a good grasp of how best to make sure you know about and understand all new legislation and amendments to existing laws that will no doubt, at some point in the future, affect the block and your management of it.

To contact the LMP Law team, head to their website, call 0115 7841614 or email enquiries@lmp-law.com.


Article first published in Edition 46 of Flat Living Magazine.