Client retention matters in every industry because as research shows, obtaining new customers can be anywhere from 5 to 20 times more expensive for businesses than retaining existing ones. 

For marketing agencies, client retention strategies are especially important. In a competitive field where client expectations are high, meeting and exceeding those expectations can be the difference between a one-time engagement and a lasting partnership.

In this article, we will take a look at some of the most effective client retention strategies with a particular focus on the marketing industry.

What Is Client Retention?

Client retention is a marketing tactic that has the primary goal of keeping existing clients engaged and satisfied with your products and services to avoid losing them to your competitors.

For digital marketing agencies, metrics that help gauge the success of customer retention rates are key performance indicators (KPI) that reflect your agency's excellence in client management.

Client Retention vs. Client Acquisition

While attracting new clients might seem like a direct path to revenue growth, it’s not always that simple. Pouring resources into acquiring new subscriptions for your marketing services may boost revenue initially, but if it leads to customer churn due to low satisfaction, this growth model becomes unsustainable.

With that in mind, what exactly is client acquisition, and how is it fundamentally different from client retention?

Client acquisition is the process of gaining new clients through marketing efforts, referrals, or other outreach activities. Here’s a visual summary of various digital marketing channels available at your fingertips:  Key channels include:

• Google Ads
• X
• YouTube
• Instagram
• Facebook
• TikTik
• LinkedIn
• Snapchat 

Key Metrics for Measuring Client Retention

Let’s take a look at several important formulas worth knowing about.

Client retention rate is a self-explanatory metric that measures the percentage of clients your agency retains over a specific period. Here’s the formula:  Churn rate is another useful metric that helps you assess how many clients choose to end their client relationship with your digital marketing agency in favor of a different service provider. You can calculate it using this formula:  When designing your client retention strategy, it’s worthwhile to prioritize customers with the highest customer lifetime value (CLV). This metric can give glimpses into the following information about your customers: 

• Customer loyalty and satisfaction: A high CLV indicates that customers are satisfied with the product or service and are likely to remain loyal to your brand over time.
• Revenue potential: CLV reveals how much revenue a business can expect to generate from an average customer throughout their relationship.

So, here’s how this metric can be calculated: 

The Importance of Client Retention

Regardless of the industry, client retention is important for several reasons:

• Ensures consistent revenue and business stability
• Keeps clients on board
• Helps turn clients into brand advocates who give word-of-mouth referrals and leave positive reviews

You may say that, well, okay, we’re on the same page about the importance of client retention, but what is a good enough percentage? Here’s a handful of useful data for you to remember in 2024:  As you can see, you should strive to maintain an 84% customer retention rate. Still not convinced?

Why Client Retention Is Critical for Digital Marketing Agencies

If you’re an owner of a digital marketing agency that provides services to SMBs, then you, no doubt, are well familiar with the high demands of clients from this marketing niche. 

In fact, according to Forbes analysis, in 2024, labor and inventory are the top two expenses for SMBs in the US. In fact, 70% of a business’s spending goes toward reimbursing employees, while between 25-35% is dedicated to inventory management, such as ordering supplies and paying for storage.

With such a distribution of expenses, it’s not surprising that marketing doesn’t account for the largest piece of the financial spending pie. It’s also rather apparent that if SMBs don’t see clear proof of marketing ROI, they’re likely to cancel their services with a digital marketing agency after 1-3 months.

Many SMB owners rely on client reviews and testimonials to choose their marketing service providers. If your agency suffers from high churn rates and doesn’t have a stellar reputation, it might be extra hard for you to grow your customer base even if you pour resources into advertising your brand.

8 Proven Client Retention Strategies

1. Deliver an Outstanding Onboarding Experience

As a marketing professional, you know better than anyone else that first impressions count! A good onboarding experience sets the tone for your whole client relationship. 

Implementing clear guidelines in the onboarding process can reduce early churn and create a solid foundation for a long-term partnership.

Take the time to clearly communicate expectations to build trust from the get-go. When working with franchises, align on the exact KPIs to measure the success of your multi-location marketing strategy, ensuring clarity and demonstrating measurable impact.. 

Here’s a helpful overview of which marketing KPIs matter the most in which industries:  Also, agree with your customers on the frequency of client reporting. Here’s an infographic to help you decide how frequently to deliver your reports for businesses from a range of industries:  Looking for additional information to take your onboarding to the next level? Check out this video: 

2. Personalize Your Client Interactions

Clients want to feel valued, and one of the ways to showcase your appreciation for your relationship with them is to personalize your interactions with them. 

If your agency has dozens of clients, this may seem tricky. This is where an AI-powered CRM saves the day by keeping your existing customers engaged and informed about your agency’s current products and services and the latest updates. 

AI-driven CRMs excel at analyzing vast amounts of customer data to uncover valuable insights. Beyond facilitating automated email marketing campaigns with ample room for dynamic fields that address each letter to the recipient using their first name, AI algorithms can also process customer interactions, purchase history, and engagement metrics to create detailed ideal customer profiles.  With the help of this information, AI can target ICPs with the most relevant materials to address their pain points. For example, your marketing agency could segment your existing customers based on industries: healthcare, tech, and financial companies. 

Personalized email marketing campaigns could hold clients from each industry in the loop about the most cutting-edge marketing solutions for their marketing niche.

3. Maintain Regular Communication with a Strategic Calendar

To keep you and your customers organized, set up a communication calendar that includes regular check-ins, performance updates, and proactive outreach. The latter can be particularly important for collecting all the necessary assets, such as images and videos for social media marketing campaigns.

Consistent communication with clients not only keeps your agency at the forefront of your mind but also ensures that clients feel supported and informed throughout your partnership. 

4. Provide Proof-of-Performance Reporting

Client reporting is essential to maintaining strong relationships. As mentioned above, a marketing agency’s ability to prove its marketing ROI can ensure long-lasting partnerships. Conversely, a lack of transparency into how a business owner’s investment pays off could become a deal breaker.

Pro Tip: If you don’t have a solid process for staying in touch with your clients, Vendasta’s B2B customer portal can help. One of its numerous outstanding features is white-label reporting. Vendasta’s Executive Report is a comprehensive assessment tool that provides clients with clear, data-driven insights into the performance of your services. 

5. Build a Client Loyalty Program

Rewarding long-term clients with loyalty programs, discounts, or exclusive content can help foster a deeper connection and incentivize continued business.

For example, your marketing agency could keep your clients incentivized with a loyalty program that relies on earning points. Here’s a hypothetical scenario of how this program could work:

You could assign a certain number of points for various actions, such as:

• Signing long-term contracts (e.g., 100 points for a 12-month contract).
• Referring new clients to the agency (e.g., 200 points per successful referral).
• Participating in quarterly strategy meetings (e.g., 50 points for attending).
• Subscribing to additional services like SEO or social media management (e.g., 150 points per new service).
• Providing feedback and reviews (e.g., 30 points for a review on Google or LinkedIn).

Clients can redeem their accumulated points for rewards such as:

• Free Services: For example, 500 points can be exchanged for a free month of social media management or email marketing campaigns.
• Exclusive Content: Offer access to premium content like e-books, webinars, or industry reports (e.g., 300 points).
• Discounts: Points can be used for discounts on future services (e.g., 250 points = 10% off the next month's bill).

6. Upsell and Cross-Sell Strategically

Building strong relationships opens up opportunities for upselling and cross-selling. Analyze client performance metrics to identify additional services that can further enhance their marketing efforts. For instance, if a client is seeing success with PPC, you might suggest SEO services to maximize their online presence. 

If your marketing agency doesn’t have the ability to offer the whole suite of services, opting for the help of a white-label service provider can be a solution to meet your clients’ demands. 

Pro Tip: Vendasta’s Marketplace offers a variety of complementary white-label digital marketing services, from social media management to reputation management, that you can offer to boost your clients’ marketing performance. 

7. Educate Your Clients and Offer Ongoing Value

Position your agency as a thought leader by educating your clients. Offering webinars, guides, tutorials, and other resources that help them better understand the importance of marketing and how it works increases trust and ensures they fully realize the value of your services. 

8. Provide Omnichannel Support

Clients expect fast, responsive support across multiple channels, whether it’s through phone, email, chat, or social media. Ensuring that your agency is available to address concerns across platforms shows that you’re committed to your clients’ success. 

Pro Tip: Vendasta’s Business App can help you manage all these different channels by becoming a single hub where your clients can reach you whenever they need assistance. This level of accessibility leads to higher satisfaction and retention. 

Automate Client Retention Strategies

If implementing eight client retention strategies manually seems like a daunting task, no need to sweat. With the AI revolution making waves in the marketing industry, your agency can delegate many of these processes to AI. 

Some ways AI can help with client retention have already been discussed above. Let’s recap those and add them to a comprehensive list of various ways in which AI can help you keep your SMB clients satisfied:

• Aggregating Customer Data in the CRM: Centralizing client information helps to track interactions, preferences, and behavior, allowing for tailored communication.
• Automated Marketing Campaigns: Based on customer behavior and preferences, AI-driven CRM can send personalized messages across multiple channels, including but not limited to emails, SMS, and push notifications.
• Scheduling Meetings with Customers: Automated scheduling tools that integrate with calendars streamline meeting arrangements without back-and-forth emails.
• Providing Proof-of-Performance for Marketing Campaigns: Automation tools generate detailed reports on campaign performance metrics, providing clients with clear evidence of success.
• Identifying Cross-Selling and Upselling Opportunities: AI and machine learning analyze customer data and identify patterns that suggest potential cross-selling or upselling opportunities.
• Providing Omnichannel Support with the Help of Webchats: AI-assisted webchats offer 24/7 personalized customer support.
• Predictive Analytics: By identifying patterns in customer behavior, AI can gauge the likelihood of your clients churning. Based on these insights, you could invest more effort into addressing concerns that you’re most likely to lose. 
• Sentiment Analysis: AI can analyze customer feedback to calculate each of the customers’ net promoter scores and recommend that you implement NPS management strategies for those clients that fall into the categories of either passives or detractors. 

Vendasta is committed to staying on top of marketing trends. Over the recent years, it has made a substantial leap in infusing its technology with AI. 

From white-labeled AI-assisted webchats to AI-powered CRM, your marketing agency can reap the benefits of the AI revolution to supercharge your SMB client’s online presence. Request a demo today!