Customer retention is the work that keeps a customer choosing the company when the need arises again. In the sales team, the head of sales is responsible for it: they assign clients to salespeople, review reductions in orders and the reasons for pauses every week, and make sure agreements are honoured. The business owner decides which clients the company serves, what terms it is willing to offer and how much of the company's resources to allocate to this work.

At the end of the quarter, the business owner notices that a familiar client is paying less and less. The contract is still in place, the invoices have been paid, and there are no complaints. But the company used to clean four premises for them, and now it cleans one. Another contractor already looks after the rest.

In this illustrative example, the client was leaving in stages, so they do not appear on the list of lost clients. The salesperson is busy with new contracts, while the administrator schedules the cleaners' visits. Each person sees their own part of the work, and the owner is the first to notice the shrinking relationship, through the quarterly revenue.

I believe that, before discussing loyalty bonuses, there is another decision to make here: appoint someone who is responsible for the client between orders. And agree on what change they must notice, even if the customer keeps paying.

Who is responsible for an existing client after payment

The assigned salesperson is responsible for each customer. They know what the client currently receives, when they will decide on their next order and what is preventing them from continuing to work with the company. In a small team, this is the same salesperson who brought the client in. A separate department to look after existing clients is not needed to begin with.

The head of sales has a different task: distribute this work, set aside time for it and look into anything that is off track. If a salesperson both finds new clients and looks after existing ones, the head of sales sets the workload for each part. Telling them to look after existing clients in their spare time means that those clients will be left waiting again when enquiries flood in.

The service team is responsible for delivery: in our example, cleaning, scheduling and access to the premises. The salesperson is responsible for continuing the commercial relationship. If a client removes premises from the contract, the salesperson finds out why and decides what to do with the head of sales. The service employee passes this information on to the salesperson, even when the customer explains the change calmly and does not complain about anyone.

The business owner establishes this arrangement between the department heads. Otherwise, the head of sales is responsible for retention but is the last to hear about a change in volume. When handing a client over to another salesperson, details of the customer's upcoming decision and any unfulfilled promises need to be passed on separately: changing the name in the record does not do this on its own.

Why clients leave

A customer does not have to announce a tender for contractors or warn you about a trial order with a competitor. So the absence of a complaint tells you little about their next choice. The sales team needs to know why that choice changes.

Start with four different situations:

  • The need has decreased. The client has closed premises, finished a project or reduced production. The evidence is their message and the new volume of work. The salesperson checks the remaining need; the previous sales plan for this client's purchases is dropped.
  • Buying has become inconvenient. To agree the schedule, the client writes to several employees every time. You can see the trail in the correspondence: one question gets forwarded, there is no answer, and the customer sends reminders. The head of sales agrees with the service team on a single response and a deadline.
  • The terms no longer suit them. The customer needs a different volume, delivery time or payment arrangements. The salesperson records the specific requirement, and the head of sales finds out whether it can be met. A discount makes sense only when price is really the obstacle.
  • The choice within the client's company has changed. A new buyer reviews suppliers, or the person in charge assigns some of the work to another team. This calls for a conversation with whoever now makes the decision and an understanding of their criteria.

If there is no answer, the reason is unknown. A note saying “too expensive”, based on the salesperson's guess, will send the head of sales to get a discount approved when the customer was actually tired of arranging the cleaning. It is enough to separate what the client said from the salesperson's interpretation in the record so the head of sales does not mistake one for the other.

A separate issue is the loss of trust after a mistake in delivery. The article “The faulty goods were replaced, but there are no sales. Why didn't the client return?” covers it in detail. Correcting an order and deciding to buy again rest on different grounds; here we will focus on clients who leave without complaining loudly.

How to measure retention when the number of clients is unchanged

First, choose a period that reflects when the selected group actually makes repeat purchases. For monthly services, a month is suitable. For a seasonal service, compare seasons. Combining them in a single monthly percentage makes no sense: a seasonal customer's lack of an order will look like a loss.

Illustrative calculation: in September, the company served 40 clients with a monthly need. In October, 32 of them continued buying. Another eight came for the first time. The total was 40 again.

October retention for the September group: 32 / 40 × 100% = 80%. New customers are not included in the numerator. The unchanged total number of clients hides the fact that eight previous clients did not buy that month.

But it is too early to declare all eight gone for good. Suppose the following was established in the same illustrative example:

  • three confirmed that they had moved to another contractor;
  • two had closed their premises for repairs and said when work would resume;
  • the sales team had not yet received a reply from three.

All three groups stay in the report. The two clients having repairs done cannot be retrospectively removed from September's 40 to make the percentage look better: they were part of the original group. The pause explains the result and gives a date for a conversation, but it does not amount to an actual order. Unknown reasons are also shown separately.

There is another trap: all 32 clients who continued buying count as retained, even if some reduced their volume. So alongside the client count, the head of sales shows the change in paid orders from the original group. In the cleaning example, it is also useful to see the number of premises being cleaned: a price increase can hide a reduction in work. For goods, compare like-for-like quantities; for services, compare what the order included before and what it includes now.

The business owner gets two answers: how many customers remain and how much business remains with those customers. The second answer reveals losses before clients leave for good.

How to retain a client

To retain a client is to preserve their reason for buying again. What you do depends on what has changed for that particular client. Calling everyone to offer a discount skips this distinction.

Before the customer's decision: notice a change in volume

The salesperson compares the current order with the previous one: fewer premises, less frequent deliveries, some services have disappeared. Then they ask what happened. A reduced need and an order passed to a competitor look the same from the outside, but call for different actions.

For the illustrative cleaning example, this question would work: “Only one of the four premises is left in the new schedule. Have you closed the others, or do you now arrange cleaning there differently?” This is a sample conversation, not a client quote. The question lets the customer explain the reason calmly without having to justify their choice.

While the choice is still open: remove the specific obstacle

If it turns out that agreeing the schedule took too long, the salesperson gives the head of sales the facts and the client's preferred way of working. The head of sales and the service team decide who will give a single response and by when. The client is offered only a way of working that has been confirmed.

The result of this step is that the customer has agreed to consider continuing on new terms, and the company has carried out the promised action. An order is counted separately once it has been placed. A note saying “everything was explained to the client” does not mean the lost volume can be counted as recovered.

If there is no current need: agree on a reason to get back in touch

When premises are being repaired, the salesperson checks the expected reopening date and a convenient time to get in touch. If there is no recurring need, they do not schedule weekly calls indefinitely. The sales team's work needs a regular schedule; the frequency of contact depends on what the customer needs to do.

Winning back clients who have already stopped buying is a separate task. “Sales have fallen. And who was supposed to bring existing clients back?” explains how to find a reason for that conversation. To retain clients, it is better to learn about a change while they are making a choice and still deciding how to allocate their next order.

How to increase customer loyalty

Loyalty shows in a willingness to choose the company again. Start by removing the extra work the customer has to do to buy again: explain their requirements again, find the person responsible and remind people of the agreed time. A friendly salesperson helps, but the client still does these tasks at their own expense.

In the cleaning example, a meaningful change is one contact for agreeing the schedule and a response within the promised time. A message thanking the client for many years of working together does not solve the problem that led them to assign three premises to another contractor.

A benefits programme should be tied to a known need. If the customer needs predictability, offer a schedule agreed in advance. If they need regular purchases, offer an easy way to repeat an order. Before promising priority service, the head of sales agrees with the people doing the work how it will be provided and how it will affect other clients.

Discounts also require calculations. The business owner sets acceptable terms and the minimum income from an order, allowing for the work involved in serving the client. Keeping a contract that requires more and more free work just for the retention percentage is a poor goal. The sales team must be able to offer an option it can manage and accept a refusal.

It is better to ask how easy the company is to work with after a specific event: whether the schedule was agreed without repeated requests, whether the documents arrived on time. The result of the change becomes visible when the client next makes a choice: they kept the same volume, increased it, reduced it or decided against ordering. A thank-you for the conversation is useful feedback, but it should not be given any other meaning.

What the head of sales does every week and what the owner receives

Every week, the head of sales gathers information on changes among existing clients: who is about to decide whether to continue, who has reduced their order, where a promise has been broken and where the reason for a pause is unknown. For each case, they identify the salesperson's action, the deadline and the service team's necessary involvement. They look into any critical warning immediately, without waiting for the group meeting.

The head of sales sets aside the salespeople's time for this work and resolves conflicts between priorities. If a salesperson is assigned both an urgent new deal and a conversation with an existing client before renewal, the head of sales makes the choice. Otherwise, retention will once again depend on whoever makes themselves heard most loudly.

Here is a ready-to-use instruction the business owner can give the head of sales:

Within five working days, prepare a list of reductions in volume, pauses and upcoming renewals for the group of monthly clients. For each, give the assigned salesperson, the previous and current order, the confirmed reason for the change or “unknown”, the action and the deadline. Agree with the service team how information about reductions in work will be passed on. Show how much of the salespeople's time is set aside for existing clients. List separately the terms and expenses that need my decision.

The five days are the deadline for preparing the working arrangements. Recovering orders depends on customers' timings and decisions.

A completed entry for the illustrative example: cleaning — four premises became one; reason — a lengthy process for agreeing the schedule, confirmed in a written message; responsible — the salesperson; by Thursday, the service team confirms a single process for responding, and on Friday the salesperson discusses it with the client; no volume has been recovered yet.

The business owner only needs to compare such a record with the decision reached. They do not need to listen back to the whole team's conversations. In later reports, the head of sales shows changes in the original group of clients, unresolved obstacles and cases where the deadline for action has passed. Total revenue from new and existing customers is shown alongside this and does not replace this picture.

When the reasons for losses remain in correspondence

With many clients, the head of sales finds it hard to compare salespeople's explanations with conversations and deals. RENTROP has AI ROP for this task — AI for the sales team: it analyses calls and correspondence alongside the deal record, shows who needs a reply, which deals to take through to payment and which to bring back. AI ROP only reads data; the head of sales still needs to change terms and organise people's work.

Clients leaving quietly stop coming as a surprise in the quarterly report when a reduction in an order reaches someone who can act on it in time. The client still has one of their premises cleaned by the company, so the sales team has a specific conversation to have about the other three, and the business owner no longer has to be the first to discover that they are gone.