Phase 4: Retention
Okay, you’ve scored the touchdown (i.e., made the sale). But, that doesn’t necessarily mean you’ve won the game. After all, the customer truly holds the power; chances are, there are a lot of other options out there, and in the modern marketplace, it’s easier than ever for customers to jump ship or walk out your back door, never to return. That’s why, as mentioned in the section above, it’s so crucial that you form a strong partnership with each customer.
In reality, the retention phase includes several smaller phases, some of which are ongoing:
The onboarding process begins immediately after purchase. Your goal is to get your customers up and running as soon as possible. But that doesn’t mean handing them the keys and turning them loose right off the bat. After all, if they attempt to use your product with no guidance or training, they probably won’t be successful, and that will lead to frustration—which in turn, could lead them to regret their purchase down the road.
Instead, you should create a checklist of all the items (i.e., milestones) that your customers must complete in order to use your product successfully from the first time they put the key in the ignition. At minimum, that list should include:
- Migrating the customer from his or her previous system to your system (if applicable)
- Ensuring the customer’s technical setup meets your requirements
- Training the customer to use your product through self-guided learning systems, live and/or virtual training sessions, knowledge base materials, and/or consultative phone calls
While this checklist should help form the basis for your onboarding program, be careful not to let it completely dictate your approach. After all, successful onboarding isn’t just about crossing to-dos off of a list; you should be working toward an overarching goal (i.e., empowering the customer to use your product to its fullest potential).
To measure the effectiveness of your onboarding program—and identify opportunities for improvement—you should be collecting and tracking a few different data points. According to this article, these may include:
- days to onboard a new client
- days to achieve key milestones
- number of customer interactions during onboarding process
Compare the averages for these metrics over time to determine whether you’re improving, highlight areas where adjustments may be necessary, and measure the effectiveness of any such adjustments.
Finally, don’t stop at merely collecting data. To really get a feel for how you’re doing, you’ve got to get real, live feedback from your audience. “Getting qualitative feedback from your customers can uncover holes in your program and help guide you to make better decisions that data points may not be able to uncover,” the above-cited article continues.
Remember, onboarding is your customers’ first real experience with your product and your company, and the impression you make during the onboarding process will stick with them—and influence their satisfaction level—for the rest of the customer lifecycle.
Once a customer has completed the onboarding process and has begun using your product, it’s absolutely critical that you keep the lines of communication open in case the customer has any problems, questions, or concerns. This is especially true during the first 90 days, because if the customer does not immediately begin to see value in your product, then he or she will be much more likely to ultimately leave you. “This is a critical phase of the customer lifecycle…either you engage them here (what that means is 100% dependent upon the customer in the context of what they’re trying to—or would like to—achieve with your product) or you lose them forever,” Sixteen Ventures explains.
This is where churn rate comes into the picture. Simply put, your churn rate tells you how many existing customers you’re losing—and how fast they’re leaving you. Companies that fall victim to the ill effects of churn often are those that put all of their focus and energy into closing new deals, and then disappearing the moment the customer hands over his or her money.
Unfortunately, support—even during the initial 90-day period—often is provided on a reactive, rather than proactive, basis. Instead, companies should shift to an introductory support model organized around known milestones that are clearly laid out for the customer. “Rather than waiting for your customers and users to get lost and feel anxious about what to do next—or how to do it—you should build a proactive approach to Functional Support into your lifecycle messaging (ideally pegged to activity),” Sixteen Ventures writes.
And that spirit of proactive support shouldn’t fade when a customer hits the 90-day mark. Instead, companies should monitor their data to look for patterns that might indicate a customer is having trouble—or could potentially have trouble at some point in the future. That way, you can intervene before those issues negatively impact customer experience.
Still, even with a proactive approach to customer support and customer success, it would be impossible to anticipate customer problems and needs 100% of the time. So, you must provide your customers with an easy means of obtaining on-demand support so you can correct problems promptly and get back to delivering value to those customers as quickly as possible. On that front, there are a few items you should be tracking to ensure you provide the best support experience possible:
- Total volume by channel. This will help you maintain appropriate staffing levels and determine a strategy for using various channels appropriately in order to optimize customer experience. For example, Wistia removed the phone number for its support line from its website because based on research the company conducted, customers obtained a better experience when they submitted support tickets via email rather than via phone.
- Response time. Most customers expect to hear back from a company’s support department within a few hours of submitting a request or ticket, but at the very least, you should be tracking your 24-hour response rate. Taking longer than a day to respond to a ticket will severely impact customer happiness.
- First contact resolution rate. The fewer interactions it takes to resolve a customer’s problem, the more satisfied that customer will be. You should be shooting to resolve a customer’s issue the first time he or she contacts your support department.
- Help delay and abandonment rates. Once a customer makes live contact with you (e.g., via online chat or phone), how long must that customer wait for assistance. If it’s longer than five minutes, you could be in trouble. And if a large percentage of customers are abandoning those interactions before they’ve received the help they need, you could be in even bigger trouble.
- Moments of delight. It’s important to celebrate your triumphant moments. It’s even more important to dissect those moments in the interest of achieving even more of them. After all, satisfied customers are the building blocks of word-of-mouth referrals and positive reputation. So, each time one of your support representatives reports a “wow” moment, be sure to record the factors leading up to that success. Then, incorporate that information into continued employee training.
One of the reasons support is so crucial during the first 90 days after sale is that this is the period during which the customer should successfully adopt your product. What does that mean? It means the product becomes integral to the customer’s daily activities and operations.
Within 90 days—a full financial quarter—the customer should see clear value in your product. But if the customer doesn’t fully adopt the product, then he or she probably won’t see those results. And in the absence of results (i.e., return on investment), there’s no incentive for the customer to continue using your product (i.e., renew his or her subscription).
Thus, as explained in the section above, you should monitor adoption by tracking customer use, activity, and progress toward defined milestones. To get a feel for the specific data points you should be tracking, start by digging into your churn data. Pinpoint those customers who have left you because they didn’t get enough value from your product. Why weren’t they seeing value? Could you have done something to change that?
As for tracking usage for current customers, obviously the easiest place to start is capturing login information (if your customers must log in to use your product). After all, if a customer isn’t logging in very often, they aren’t even getting a chance to experience ROI.
Next, take a look at which product features the customer is using most often. Are they primarily basic features—which tend to deliver less value? Or are they the more in-depth, “sticky” features—the ones whose functions are much more difficult to replace? The answers to these questions should help define your customer success initiatives during the customer adoption phase.
When it comes to tracking usage, there are two main ways to capture this data:
- Feeding in-app usage data for users, companies, and time periods to a database or data warehouse.
- Using tracking codes on your web pages to track page views and actions (i.e., clicking certain links or buttons).
Remember, though, that isolated metrics aren’t super useful when it comes to formulating strategy. Rather, you should focus on usage trends. In other words, don’t just look at the usage data for a single week; also compare that data to that gathered over the last 30 weeks.
The only way to ensure your customers are happy and successful is to continually engage with them. This includes monitoring their satisfaction through:
- Net Promoter Score (NPS) surveys,
- customer health/happiness indices,
- customer advisory boards, and
- customer outreach initiatives.
Getting the most out of your engagement efforts means harnessing the combined power of technology and human interaction. After all, technology might be able to pinpoint areas of opportunity, but it alone cannot ensure your company continues to deliver value.
To do that—and thus, keep your customers—you have to continue nurturing them long after conversion and onboarding. Specifically, you must:
- build and maintain good relationships
- initiate contact at the right times
- anticipate issues before they affect your customers’ feelings toward you, and
- upsell and cross-sell when you see the potential for a particular feature or product to add even more value for a certain customer.
Your customer engagement management efforts should build off of those you initiated during the adoption phase. Even after the initial 90-day period, you should continue monitoring usage and behavior patterns and use that data to execute on the bullet points listed above. As this article explains, “…consolidating this information and identifying trends is crucial…to measure [customer] progress and take strategic action to help drive future revenue and reduce churn.” Furthermore, “Monitoring social networks using sentiment analysis to mine social networks, gives visibility to the company’s reputation at the macro level.”
Once you’ve collected and analyzed that data, you can use the results to create targeted messaging to users through in-app messages, live chat, emails, or phone calls. “In all cases, the company must prioritize efforts to provide excellent content so the messages are most valuable to the user,” the above-cited article continues.
You should be engaging with your customers across the entire spectrum of the customer lifecycle. However, keep in mind that the elements of engagement will change as the customer progresses through his or her lifecycle. In other words, you won’t—or at least, you shouldn’t—engage with your one-week-old customers the same way you engage with your one-year-old customers.
Many companies view upselling and cross-selling opportunities as a means of extracting as much revenue as possible from each customer. But that mode of operation isn’t sustainable in the long run. Why? Because if you upsell and cross-sell with reckless abandon, you can’t be sure you’re actually providing additional value to the customer. And if you’re not, your customers will catch on—and when they do, boom: all trust is lost. It won’t be long before those customers walk out the back door.
Instead, you should approach expansion with a goal of helping your customers extract as much value out of your product as possible. And as Sixteen Ventures explains, “The way that we do that is to create a customer experience that delivers increasing amounts of value over time, creating a natural growth in base-product use, a logical expansion into additional functionality, and where appropriate, adoption of adjacent products from your company.”
Again, as discussed in the previous section, this means using data to launch intelligent expansion efforts—ones that truly will deliver value.