The Secret Sauce to Customer Retention

June 17, 2015

Today, customers want everything. They want-it-all – the competitive pricing, the dynamic performance and above everything high-quality service and support. What’s more, they won’t even think for second, before shifting over to someone else if they don’t find the stuff they are looking for. If you want customer loyalty, you need to earn it.

According to a Harvard Business report, increasing customer retention by even a mere 5% can increase profits by 25% to 95%. Another report suggests that acquiring new customers costs about 30 times more money than retaining a customer and keeping them happy.

Do you know why your customers are leaving?

It’s crazy how sometimes the most obvious course of action is the one that we end up not taking. Are your customers leaving? Do you know why they’re leaving? The product manager, customer service team etc have their own hypotheses. But do you know why your customer is leaving?

The answer is a simple phone call away.

This is what Des Traynor, co-founder of Intercom has to say

“I spend about 20-25% of my week talking with customers learning who they are, what their product does, where they were based, how often they use Intercom, how they found us, what they love, where they want to see improvements etc. Any question beginning with “I wonder if anyone…” inevitably makes it’s way into my next conversations with customers. Rather than guessing, debating, or testing there is so much value in just asking.”

Pick up the phone and talk to your customers

When was the last time you answered a brand feedback survey? That seemingly personalised email that a brand sent you, did you reply to that one?

Didn’t think so.

I personally believe that telephonic interactions work massively better than, say, a discussion over emails. One big advantage of speaking to someone is the ability to ask follow-up questions to arrive at a real understand of what the customer is trying to tell you.

Next time you speak to a customer, try the 5-why’s approach to get to the root cause of the issue. Imagine sending 5 emails back and forth to understand what the customer really means!

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Imagine your car has stalled and won’t start. You try to explain to your mechanic the issue you’re facing with your car. If the mechanic stops with the first why, he’s just fixing the symptom. Your car will stall again very soon and you are going to be pissed off with your mechanic and in all probability, not go back to the same mechanic again.

Record, analyse and share the feedback with your team

The CEO of Groove spoke to more than 500 customers over a course of 4 weeks in an effort understand his customers better and thereby improve their growth metrics.

“This benefit can’t be understated enough: the number of positive reactions, even from customers who complained about bugs or issues, was huge. Surprisingly, I heard from many of our customers that no other businesses that they used were doing this, and that the gesture of asking them for their thoughts — not just with a mass-emailed survey, but by reaching out for a one-on-one conversation — meant a lot to them.

It’s amazing how easy it is to stand out with a bit of effort.”

When he shared the feedback of this exercise with his team, it led to changes in the product and the product roadmap, improved customer retention, better marketing messaging and also, data for a fantastic blog post 🙂

One of the major outcomes of this kind of conversations with customers is its massive contribution into building a better product.

Like Des Treynor says

“Blaming your customer support team for unhappy customers is like blaming weathermen for the rain. Sure they’re involved, but only on the receiving end.”

Ben Chestnut’s upside funnel, in spite of being unconventional and whacky, describes perfectly what happy customers can do for your business.

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“When you start a business, you don’t have a budget for marketing. You probably don’t have the time or talent for it, either. The only thing you’ve got is your passion. That damned, trouble-making passion that suckered you into starting your business in the first place. Take that passion and point it at your customers. Deliver awesome customer service. Delight them.”

Go forth, talk to your customers, delight them!

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