We’ve all spent some long nights looking over models of Long-Term Value over Cost to Acquire, and the math doesn’t get kinder with time. The natural levers are the natural levers. More customers. Greater value. Longer relationships.
It’s well known that the cost to acquire a new customer is higher than the cost to retain, usually by a factor of several times to several dozen times.
But if this is the case, then shouldn’t we be costing out how much it will take to double the lifetime of our relationships, and putting strategies in place to delight our customers in order to do it?
It’s true, customer acquisition often operates on a known equation. X dollars for an MQL, Y dollars for an SQL. My lead conversion rate is this. My close rate is that.
But why do my customers leave me? If, as a startup, you’ve had 5,000 at-bats with prospects from demo to close, and only 300 total customer relationships, it can be hard to empirically know the difference between one or the other.
So for startups on their first or second rounds of funding, the differences between acquisition and retention demand a sort of faith. You have to believe in the idea that if you take care of your customers, they’ll reward you with long, profitable relationships, referrals and the maintenance of your good name.
So if you’re up for helping your clients service that good name, here are some tactical retention levers that we’ve seen work, both in our own business and in clients’:
1) Listen, and respond immediately
Social media is great for instant access to information, but it has also opened the floodgates when it comes to leaving companies open to criticism online. Bugs in the last release? You’re going to get tweets. Password issues? The chat service is going to light up. Digital response times are crucial. Here are a few ways to make sure you’re doing everything you can be to delight customers:
- Escalation plan – Know when issues escalate, to whom and how.
- Crisis volume plan – Who do we tap when #$%* hits the fan?
- Automated delayed follow-up – Several days to several weeks after a support request, follow up independently of the issue.
- Categorize support requests – Work your top three issues into new releases, marketing materials, how-to’s and guides.
2) Create a retention team
Want to make retention a priority? Dedicate people and time to it. Talk about why customers love you, and why they don’t. Set regular time on your calendars to meet and drive your plans forward.
- Never forget the human side of your customers. Birthdays, kids, hobbies are all relevant. Your customer wants to like you. Make it easy.
- Take a hint from top healthcare providers the world over. Hire for compassion, teach for technical skills.
3) Measure and automate engagement
Nothing says unsubscribe like a service that doesn’t get used. Think HBO in the “Game of Thrones” off-season.
- Reward engagement with encouragement (and helpful next step advice).
- Segment tiers of engagement among your customers so that your account teams can prioritize their communications toward the groups that need it most.
4) Upsell at the right time
Since you’ve put considerable energy now toward measuring engagement (we assume you nailed #4 already, good job!), take your most highly engaged accounts and introduce them to premium features, since they already have such a great handle on your service. Strictly speaking, this isn’t a “retention” strategy, but the aftereffects of a very good one.
- Introduce premium features to highly engaged clients. They’ll be more likely to buy.
- Network into other areas of your client’s business. You already work with Jane at Acme Finance, why shouldn’t you work with John at Acme Accounting?