The secret to keeping a high customer retention rate is more obvious than you think

Written on Oct 29, 2020

By Jessica Salerno, OSCPA senior content manager 

Companies and firms looking to keep their customer retention rate high should consider going back to the basics. 

Brian Suthoff

"In the end, it really comes down to growing revenues and growing profits by really knowing and understanding the customers,” said Brian Suthoff, CEO and cofounder of Tally Street. “Being able to continually drive that repeat business and repeat sales to those customers, while finding new ones who would fit into that same strategy.” 

Tally Street is a software company that enables small to midsize businesses to grow using data they already have. Suthoff said it might sound easy to know customers when the business is small, but as the client list grows it’s valuable not to lose a sense of the most impactful client base. 

“Look at your customer retention, but also your revenue retention. So, which customers did you not only keep, but continued to buy more, spend more and grow over time,” Suthoff said. “And the reason that is especially valuable or important is to the profitability of a business. So, looking at those two things together can help a business go back and see which customers they lost that weren't spending that much in the first place.” 

Jim Hall

Company co-founder Jim Hall said as a business owner, understanding the best customers can be a freeing feeling. This knowledge can make a difference when losing customers, because depending on the type of customer, a business would know how impactful it is to revenue.

“You want to understand who your champions are, who your really good customers are and find that avatar,” Hall said. “And where do they hang out? Who do they know? Who can they refer? What associations do they belong to get those referrals that for your business are the most successful?” 

Suthoff said this can also impact marketing and product decisions because there is a better understanding of where the product or service best resonates. Finding the right software for this work also can free up time, giving accountants and CPAs time to focus on other tasks, such as advisory or consulting work. 

“We think advisers, accountants, need to move into that process sooner rather than later,” Brian said. “This is a great opportunity to basically tease more value out of the work you've already done and are already doing, and provide those the insights of the customer insights that are uncovered to clients so that they can make better decisions by acting on those insights.” 

PHOTO: Top: Brian Suthoff; BOTTOM: JIM HALL

For continued learning on this topic, check out the 15 Laws of Growth in MyOSCPA. And learn more about Tally Street at their website: https://tallystreet.com/