July 10, 2014
Boosting Customer Retention in an Increasingly Service-Oriented Marketplace
I recently attended a super awesome meetup held by the DC Lean Startup Circle group in downtown DC. The talk, titled How to Retain Customers, Create Raving Fans & Make ‘Em Beg for More, was about — you guessed it — customer retention.
I was intrigued by this topic because customer retention is a huge issue. I suppose it’s actually always been an issue for businesses, especially startups, but it seems to me that with “Software As A Service” taking off, keeping customers around has never been more essential for growth.
So with pen and paper in hand, I trudged my way through the hot mugginess that is DC in June and found myself enthralled by the first speaker.
Her name is Donna Khalife, and she’s the CEO of Surprise Ride, a startup business that sells parents on a monthly educational/care package for their children. I think this is a winner of a concept. Even more interesting about this speaker was that her company was a recent Shark Tank contestant. I don’t watch the show, but I know it’s popular, and anyone who cut their teeth under the derision of Mark Cuban must have something good to say.
And so here are my notes from Donna’s talk.
Tactics to Minimize Churn
- Provide Social Proof: Prove to others that you’re the real deal.
- Amplify good news (especially news from customers)
- Example: Photo sharing contest
- Share testimonials
- Request Feedback: Always learn the good and the bad from your customers.
- On a recurring basis (e.g. monthly)
- Be Personal: Nothing is more effective than establishing a personal connection with your customer.
- Create Long-term Goals: Have a plan to keep your customers around for a long time.
- Loyalty programs
- Badges when certain milestones met
- Keep It Exciting: Products and services that surprise customers (in a good way) tend to live long lives.
- Product, marketing, communications
- Do not allow to get stale or boring
- Provide Excellent Customer Service: Pretty obvious. Treat your customers well and they’ll treat you well.
- Be generous when dealing with customer issues
- E.g. provide discounts or freebies
Tactics to Maximize Renewals
- Automate Reminders: Customers need to know when their renewal is up. Communication is important but also time-consuming. Automate as much as possible.
- Send email when subscription is about to end
- Invite users to come back
- Be Personal
- Make it Easy to Renew: Avoid adding noise to the transaction process.
- One-click renewal (no new signup or collection of info)
- Just reply to email to renew (good customer service)
- Reiterate Value: Remind your customers why they signed up in the first place.
- Bullet point benefit list
- Create Urgency
- “Don’t miss…” followed by some deadline
- Discounts for renewing
Actively Participate in Non-Retention
- Must email to cancel (do not allow one-click cancel): Add a little friction to the cancellation process, but don’t make it a pain in the ass.
- Address concerns
- Make re-subscribing easy
- No push back
- Cool product/features/marketing campaigns
- Cool for everyone
- E.g. Pixar movies appeal to both kids and parents
- Cool tools
- Creative methods for allowing people to refer you
- Cool story
- Share a background story that relates to customer
- Company founded on XX simple principles
Have a question or comment about this post? Drop me a line!