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Client Retention

Client retention is good for your nonprofit’s financial performance and reputation.  Therefore, client retention will improve your nonprofit’s sustainability.

Client retention starts with the reasons clients contact your nonprofit.  It is more complex than their simple need for services.  The prospective client probably has several service providers to choose from.  In addition, the prospective client probably lacks the time and resources to shop the whole list, so there is a reason your nonprofit was among the select few to be considered.  Besides the marketing value, knowing their reason for choosing to investigate what your nonprofit has to offer, may help your staff better understand their expectations and desires, which will increase their satisfaction and your probability of retaining them as well as their probability of referring others.

The rule of thumb is that it is five times more expensive to acquire a client than retain one.  That is the view from the accounting office.  Then you have to add on the impact on your reputation when a former client is telling people, “I started the process at XYZ Nonprofit, but left after 3 sessions.  Their services aren’t right for me.”  Even so, many nonprofits are unwilling to empower their employees to do what it takes to retain a client.

One nonprofit we are aware of tells its donors that it served 96 clients last year.  However, only 8 of their clients completed the program.  If 88 leave and restart the process somewhere else, it is hard to feel that the 88 were truly served.  If the nonprofit changes their process and does everything necessary to retain 20 more clients, their completion rate increases dramatically but their costs remain unchanged.  How they spend their money will change (less marketing and client intake processing and more service delivery).  Probably the donors will be more generous because they and the community are receiving more value for their gifts.

Next Step:

Determine why prospects decided to investigate using your services

Determine why clients selected your services

Identify each point in your process where clients exit without completing the process

Determine how to change the process to lower the probability the clients will exit

Empower your staff to do what it takes to retain clients

Doing whatever it takes to retain a client sounds like the first step on the path to fiscal irresponsibility.  Actually, it is the next step toward greater productivity, fiscal strength, a better reputation, and increased sustainability.  Going from serving 8 to serving 28 is a large productivity gain.  Yours will probably be smaller but still significant.  Retaining some clients will be very expensive.  The expense will pay for itself in lessons learned about how to retain clients.  That is a benefit which is hard to gain any other way.  Your increased productivity and the increase in the number of clients served will attract more clients and more community support in all forms.  In addition, you will have stories to tell and data to share that will increase donor loyalty and generosity.  Look at the retention expense as a good investment, no matter how big or small, in your nonprofit’s future, sustainability, reputation, and community relations.

Take It Further:

Ask your board to grant you a budget variance so that you will have the funds needed to retain every possible client

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