For most subscription services, customer retention is the holy grail. Retaining a customer is cheaper than acquiring a new one. In addition, retention increases your chances of getting referrals. It is, mostly, a no brainer.
So, how do we actually go about retaining customers? While there are multiple levers, there are two that likely drive most returns. One of them is the obvious one – make sure the product or service is valuable. If there is a lot of value relative to what we are paying, we will stay.
And, the second key lever is customer service. If you have outstanding customer service, you do two things at once. First, through customer service interactions, you constantly surface additional value that we are probably not aware of. Second, you make sure we never leave in a fit of anger or frustration.
Now, the fact here is that value matters more than customer service in most cases. Comcast charged me an extra $10 on my bill for 4 straight months. I called their customer service 5 times in the process and was told, every time, that the problem was solved (until it eventually was). However, they do deliver a solid internet connection. And, besides, given their near monopoly where I’m at, they become more valuable. But, am I a loyal Comcast customer? Absolutely not.
On the other hand, the chances that you will get me to switch from either American Express, Audible or In Motion Hosting is very very low. They check the “deliver value” box comfortably. But, they outdo themselves in their customer service. In Motion Hosting, my hosting provider, is exemplary in this regard. I know they are an email away. I am sure they will be helpful. And, I also know that they’ll do so with cheer. They have made sure I will never leave.
The human analogy for a fantastic customer retention strategy is to think of competence and attitude. It helps a ton to be competent. In many cases, even if you have a bad attitude, if you are only among five other sought after rocket scientists on the planet, you will do just fine. However, layer in a great attitude and you will be indispensable.
4 thoughts on “Customer retention”
I like the human analogy, Rohan.
I will say, that on my team, I would much rather work with an extremely competent surly person than the super happy incompetent person.
Maybe I can be a bit surly myself, but I’ve come to loathe the happy, cheery people who bring breakfast 1x/week, decorate the office with flowers, et al, but then do lackluster work in which others have to pick up the slack. Give me the sour disposition that I can trust to deliver exemplary work over that person every single time.
I think value is without question the primary driver.
Value, and in there, time-to-value ;)
Fair enough :)
http://www.ALearningaDay.com – *Never failure, only learning and never older, only better..*
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