Remember the days when consistent repeat business as a recruiter was virtually unheard of?
In the worst examples, some recruiters employed a “slash and burn” approach that maximised commissions at the expense of ruining any chance of working with the client again.
But even among the most ethical recruiters, repeat business was a lottery, with clients generally using whichever recruiter produced a decent candidate the fastest.
Times have certainly changed. While some recruitment dinosaurs still seem to operate on a “one and done” strategy, most modern recruiters recognise the value of building relationships by adding value to their service.
No doubt, you have a similar approach.
But just how effective is your repeat business strategy?
If another recruiter approached all of your clients with a similar service at a cheaper price, how many of them would remain loyal?
Hmm… that’s the kind of thought that festers.
It can take a lot of effort to win new clients, especially the key ones that provide the bulk of your business. Wouldn’t it be nice if you could lock them down and virtually guarantee that they stick with you through thick and thin?
This is how you do it…
Golden Handcuffs
If you’re not familiar with the term, a Golden Handcuff is a benefit offered to an employee that encourages them to stay in place long-term. This usually takes the form of financial rewards that kick in after specific periods of time.
I was reminded of these recently because of a benefit offered by medical insurance provider, Vitality.
The insurance industry has some similarities to the recruitment industry in the sense that it has a large number of providers, all offering – at least to the layman’s eye – very similar services.
At the end of each year, when the premiums inevitably go up, the customer has a choice to stick with what they know, or look for a cheaper provider.
Some will stick with the provider they already have, simply because they don’t have the time or the patience to switch. But that’s a very tenuous form of loyalty.
If it can be called loyalty at all.
But Vitality have done something rather clever. One of the benefits they offer to their customers is an Apple Watch with payments spread, interest-free, over two years.
That, in itself, would be a pretty good deal, but each monthly payment can be reduced depending on how active you are. Do enough exercise – and it has to be a lot – and your monthly watch payment can be reduced to zero.
For a health insurance provider, this makes good sense. Active people are less likely to get sick and therefore less likely to make an insurance claim.
But it’s also good business sense.
Because when the year ends, and the premiums go up, switching to another provider will require paying off the remaining balance on the watch. Far easier to simply let the insurance roll over for another year.
But what about after the two years are up, and the Apple Watch is paid for?
No problem. You can upgrade to the latest model on a new two-year plan.
Let’s call this Vitality’s, Golden Apple Handcuffs.
Sorry.
Creating Loyalty in Your Clients
If you provide your clients with a high-quality recruitment service, there’s an excellent chance they’ll come to you the next time they have a vacancy.
No doubt you have a good relationship with the key decision-makers within a number of different businesses.
But just how secure is that link?
Just like the insurance industry, clients often stick with the recruiters they know because it’s easier than finding somebody new. But that can change in a hurry.
What happens if your main contact leaves the company and is replaced by someone who has a prior relationship with a different recruitment firm or who is keen to shake things up and see what terms might be available through a different recruiter?
Is there a way to put Golden Handcuffs on your clients to cement their loyalty?
There are various value-added features you can add to your recruitment service that your clients will appreciate and be reluctant to lose. The challenge, of course, is coming up with something that most other recruiters can’t or won’t match.
But there is one recruitment feature we’ve discovered that is not only rare, but helps us win new business and quickly build strong loyalty.
It’s called a “Free Replacement Policy”.
You know this one. It’s not especially new. Basically, we provide our clients with assurances that, if the candidate we place leaves within a period of time, we will, if possible, locate a replacement without additional charge.
But what makes this hook somewhat unique is that, depending on the seniority of the position, we offer this guarantee for up to two years.
A lot of recruiters balk at this.
“What if the candidate leaves for reasons that couldn’t be foreseen?” they cry.
“What if they just don’t get along with their workmates?” they shriek.
“I can’t put myself on the hook for something that is out of my control!”
At which point I rub my hands with glee. Because I know those recruiters will never steal our business.
Because we offer something they can’t. Or won’t.
But this is more than just a USP.
This is our set of Golden Handcuffs.
If we fill a senior role and provide, say, a 12-month free replacement policy, the client is very unlikely to leave us for another recruiter during that period.
They could, but only at the risk of losing that policy.
And if we make another placement with them during this time, then that policy window is extended again.
Naturally, this has to be factored into our costs. But because it helps us maintain a long-term relationship with our clients, it’s a worthy investment.
This is a powerful method of ensuring repeat business. And all the more so because our competitors are so unwilling to match it.
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It’s worth noting that offering this policy is only possible because we’ve taken the time to track our placements and we know what our retention rates are over 12 and 24 months (at the time of writing it’s 100% and 96% respectively).
This isn’t accidental. Our job and candidate surveying techniques, carried out using the i-intro® method, is designed to produce accurate placements with accompanying high retention rates.