What is client loyalty?
The topic of client loyalty is essential for financial firms of all sizes. To successfully retain clients and promote business growth, it’s crucial to understand client loyalty and how to achieve it.
Client loyalty results from a positive relationship between a client and a financial adviser. This type of loyalty means that clients are not only satisfied with the services and products they receive, but they also trust and respect the firm. As a result, they are less likely to switch to a competitor, even if a cheaper option is available.
Nurturing client loyalty requires more than just meeting clients’ needs; financial advisers must also build rapport and create an emotional connection with their clients.
What is the difference between client retention and client acquisition?
Client retention refers to the ability of a firm to keep its clients over time. You can achieve this by providing quality services and products, maintaining good communication, and offering competitive pricing.
On the other hand, client acquisition is the process of attracting new clients to a business. You can do this through effective digital marketing and advertising campaigns that target the right audience.
Digital marketing is one of the most efficient and effective ways to promote client loyalty and grow a financial advisory firm. By creating a strong online presence and engaging with clients through social media, businesses can build lasting relationships with clients that lead to repeat business and referrals.
When it comes to client loyalty, financial advisers need to focus on both retention and acquisition. Businesses can retain their existing clients by providing quality products and services, maintaining good communication, and offering competitive pricing.
At the same time, financial advisers need to actively attract new clients through effective digital marketing campaigns. By doing so, firms can promote client loyalty and encourage growth.
“82% of financial firms agree that retention is cheaper than acquisition”
Source: SmallBizGenius
Client loyalty results in higher profits
Any financial adviser knows that acquiring new clients is essential to growing their business. But what is often overlooked is the importance of client loyalty. Not only will loyal clients provide a constant regular stream of fee revenue, but they can also help to generate new business through word-of-mouth recommendations.
Studies have shown that it can cost up to five times more to attract a new client than it does to retain an existing one.
Furthermore, loyal clients are more likely to forgive occasional mistakes, giving the business a chance to redeem itself. For all these reasons, fostering client loyalty should be a top priority for any financial firm that wants to improve its bottom line.
“56% of clients say client service is ‘very important’ in brand choice and loyalty”
Source: Microsoft
How to improve client loyalty
Content marketing, Email marketing, and Social media marketing are all great ways to improve client loyalty and increase profits.
Content marketing allows you to connect with your clients deeper, sharing valuable and relevant information they can use in their everyday lives.
Email marketing keeps your clients up-to-date on new products, services, and promotions and allows them to provide feedback that you can use to improve your service and marketing efforts.
Social media is a great way to build relationships with your clients, keeping them updated on what’s happening in your business and sharing valuable content relevant to your clients and prospective clients.
Content marketing
Content marketing is a strategic approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience — and, ultimately, to drive profitable client action.
When executed correctly, content marketing can be an extremely effective way to improve client loyalty. You can build trust and credibility over time by providing your audience with valuable content relevant to their needs.
In addition, consistently producing high-quality content will establish you as a thought leader in your industry, making your clients more likely to stay loyal to your brand. When done right, a successful content marketing campaign can be a potent tool for improving client loyalty.
“73% of companies that spend from 10% to 70% of their total marketing budget on content marketing were very successful”
Source: Semrush
Email marketing
Email marketing is a great way to improve client loyalty. You can keep your clients informed and engaged with your business by sending regular email updates about new products, services, or promotions.
In addition, a well-coordinated email marketing strategy will help you build relationships with your clients by personalising messages and offering valuable content. By taking the time to connect with your clients on a personal level, you can create a sense of loyalty between you and your clients.
“80% of advisers still rely on email marketing to assist with maintaining their client retention rate”
Source: Emarsys
Social media
Social media also represents a powerful tool financial advisers can use to improve client loyalty. Through social media, firms can constantly communicate with their clients, providing updates on new products and services, answering their questions, and addressing their concerns.
In addition, social media allows advisers to build relationships with their clients by sharing relevant and engaging content with them. When clients feel connected to a company, they are more likely to remain loyal to it. Thus, social media can play a crucial role in improving client loyalty.
“64% of online users make a purchasing decision after watching a video on social media”
Source: Biteable
Word of mouth
Word-of-mouth marketing is one of the most powerful tools you have at your disposal for growing your financial advisory firm. After all, client loyalty is one of the critical ingredients of success in any business. There’s no better way to generate client loyalty than delivering outstanding service and getting positive word-of-mouth reviews.
Of course, generating word-of-mouth marketing can be easier said than done. Clients with a positive experience with a service or product are likely to tell their friends and family about it. Word of mouth can create a ripple effect, resulting in more clients for the business.
Sometimes, word-of-mouth marketing can be even more effective than traditional marketing campaigns as it is more personal and trustworthy. People who hear about a service from someone they know and trust are more likely to be interested.
As a result, businesses should focus on creating satisfied clients who will spread the word about their business.
“75% of people don’t believe adverts, yet 90% trust suggestions from family and friends and 70% trust client reviews”
Source: Hubspot
Six stages of building client loyalty
Client loyalty results from a positive client experience that leads to ongoing business. Its essential financial advisers strive to create loyal clients as they are more profitable in the long run.
The six stages towards achieving client loyalty:
Awareness: The prospective client becomes aware of the firm and its products or services.
Interest: The prospective client becomes interested in what the firm offers.
Evaluation: The prospective client evaluates whether the firm’s services and products meet their needs.
Trial: The prospective client makes first contact with an adviser.
Purchase: The prospective client becomes a new client.
Loyalty: The new client recommends the services and products to friends, family members and work colleagues.
Financial advisers should create a positive client experience to create loyal clients at each stage. By achieving this, it will make them more profitable and have a sustainable business model.
The future of client loyalty
In today’s financial services environment, client loyalty is more important than ever. With so many choices available to prospective clients, financial advisers must find ways to stand out from the competition.
Many financial firms during this current economic climate may have been feeling the ever-increasing pressure to retain their current clients and increase their client acquisition.
Financial advisers who use marketing methods including; Content marketing, Email marketing and Social media marketing will build long-lasting relationships with their current clients and reach out to more prospective clients.
Nurturing those ongoing relationships with clients will lead to more profitability and reduce the risk of business going towards a competitor.
Looking to unleash your firms’s potential and grow online?
At Goldmine Media we invest in relationships with financial firms and brands looking to drive growth and succeed in what they do. Our integrated digital marketing company will work with your firm to grow more rapidly by using data-driven and award-winning digital marketing strategies. Ready to discuss your next project? Contact Goldmine Media on 0845 686 0055, or email: findoutmore@goldminemedia.co.uk.
Jack Reid, Digital PR and Creative Team Consultant,
Goldmine Media
