5 Pillars of Customer Retention
At Decoded Strategies, we know what it feels like to pour all your time, energy and money into growing a thriving business. After spending 15+ years focusing on marketing and retention strategy for social enterprises and tech startups, we know what it takes to ensure you’re not wasting time, money and energy on new leads that won’t stick around for the longrun.
This guide is meant to be a practical help to you in your business. It’s something you can begin implementing immediately.
Most companies spend huge amounts of time, money and energy acquiring new leads, and often struggle to convert those leads to paying customers.
After putting in all that work, they don’t put time and efforts into keeping those customers. And that is costing them big time. It’s like trying to fill up a bucket with water. Meanwhile, water is pouring out of a hole in the bottom. Except it’s not water. It’s money. A lot of money.
A marketing strategy without focus on retention will cost you time, money, and customer loyalty. And that can cost you your business.
How many customers leave after just one purchase?
Why are they leaving?
Is your team burnt out by fire-fighting to save customers with one foot out the door?
These are common challenges businesses face. And when you’re fighting for the survival of your business, it’s hard to implement proactive strategies to keep the customers you fought so hard to win.
In the startup world, it is 5x more expensive to get a new customer than to keep one you have. So why are you spending all your money on marketing that doesn’t result in long-term, dedicated customers?
Customer retention isn’t rocket science. But it does require work. Luckily, it’s the right kind of work that makes sure your business stays healthy and growing.
In my leadership roles across nonprofits and the tech sector, I’ve compiled everything I’ve learned to share with you. I have identified 5 Pilars of Customer Retention that are the foundations every company needs to be successful. These will guide you toward a future with satisfied customers who stick around. And who doesn’t want that?
Put these 5 Pillars of Customer Retention into action so you can gain and keep your hard-won customers. You worked too hard to get their business to lose them now.
Focus Your Marketing on Acquiring Leads Most Likely to Succeed in The Long-Run
Often, companies are so eager to make a sale they promise the world to any potential customer that shows interest. The problem is, this leads to a lot of mismatched customers to your product. By aligning short-term sales goals with retention goals, you’re guaranteed to grow revenue much more consistently.
The first step to attracting the right type of customer is to define your Ideal Customer Profile (ICP). The ICP should represent all the qualities in a customer you believe are the best fit for your product or service. This will provide clear guidance on how to approach your sales and marketing.
To develop your Ideal Customer Profile, start by answering the following questions:
What industry and verticals are most successful using your product or services?
What type of business problems are you most able to solve?
Are there certain demographics your product can best serve?
You’ll be well on your way to developing a clear ideal profile of your dream customer!
It’s About The Journey, Not The Destination
We’ve all heard this old saying before, and it’s all the more true in business. Make sure there is always a very next step each of your customers can take to stay connected to your business.
A lot of businesses focus only on new sales without an eye towards retention. This leads to constant fire-fighting to save customers who have one foot out the door. It’s hard to set aside time to think about the big picture, and map out your ideal customer journey. Creating a customer journey map will clarify your goals and focus on sales and retention.
The secret sauce here is to create two parts to the journey- an ideal path with your customers’ actions, and the path with your actions. Write out all the steps your dream customer should take with you. Then, map out all the actions you need to take to help encourage customers along the ideal path.
Start to build a customer journey map by answering these questions:
What are the 10 most important actions each customer should take while working with you?
Where are the friction points along the way? The key here is to select the most challenging experiences your customers may have. Then, focus on making changes to address these within the customer journey.
Do these milestones align with the ICP you’ve defined?
Great work! This customer journey map will now serve as your foundation for driving an amazing customer experience.
The First Moments Are Your Most Valuable Moments
Chances are, you’ve already thought a lot about your onboarding process. But have you built it out? Are you keeping track of how well it’s going? It's important to make sure your customers know exactly what they should be doing when they start working with you. We all know what it’s like to feel lost, and no one wants that for your customers!
There is a ton of data out there showing that a successful onboarding is one of the biggest keys to longterm success. First impressions are important. Setting your customers up well from the beginning has positive effects that are hard to make up for later. Clarifying your onboarding process will have a huge impact on customer retention.
Answer these questions to start building a killer onboarding strategy:
What are the biggest problems your product is helping the customer solve? Continue focusing on how your product will solve this pain, and you’ll keep customers’ attention much longer.
What is the single most important thing you know customers have to do to be successful? What are the second and third most important things?
Have you made it clear for your customers to easily to understand how to do these things?
How are you communicating about these key milestones to your new customers?
Often, your brand-new customers are still a little on the fence. Make sure you don’t stop selling them on the value of your product, and how you are going to make their lives better. If you knock their socks off with clear and easy to understand onboarding, you’ll give them confidence in continuing to work with you.
Make it Sticky Through Social Proof
Let’s pretend you decided you wanted to cancel your Netflix account to save a little money. You probably share your Netflix account with a partner, kid, old college roommate… and so you’d likely have to think twice before cancelling. My husband would kill me if he couldn’t keep watching new seasons of Cobra Kai on Netflix. There’s no way our subscription is ending anytime soon.
This is a great example of the power of a sticky product because of social proof. Social proof is just a fancy way of saying people stick around if their friends and family are involved. If your customer invites their friends and family into their relationship with your business, it will be harder for them to leave you.
A great way to keep your customers longer is through proactive encouraging social proof. One of my favorite pro-tips is to encourage your customers to invite their friends and family to work with your business. Get your customers to refer their colleagues, neighbors, Facebook friends and your business will grow. It’s that simple! But so many companies aren’t doing this yet. Here’s your chance.
Encouraging social proof helps your company in two ways:
Customer referrals means they value your service. This is great feedback on what you're offering.
Your customers are more likely to stick around if their friends and family also rely on your product and services. You’re making the value of your business go farther by serving more people.
Here’s how to start considering how to make your product or service more sticky:
Is there an opportunity for your customer to add friends, family or coworkers to their account?
Can you offer a bonus or discount code if they refer your product to someone in your network?
What small changes could you make to your offering to further incentivize either of the above?
In my work with B2B tech companies, one of the biggest indicators of long term customer success was if the customer added 2 other people to their account. Once we discovered this, we quickly added this into our onboarding to make sure every customer added their family and friends!
Be Proactive With Your At-Risk Customers
Create clear criteria for your at-risk customers and track their behavior. There are patterns you will be able to track that show you the behavior of your customers most likely to leave you.
By identifying these patterns, and implementing proactive steps to address them, you’ll massively increase retention. You don't want to be spending your precious time and resources saving the customer who has one foot out the door. Identify the key indicators of churn and then encourage your customers in the right direction to help them thrive.
Start building your “At-Risk” customer action plan by answering these questions:
What patterns have you noticed from the customers who have not remained with you in the past?
Do you or your staff have theories about indicators of potential churn?
What’s one consistent thing you’ve seen from your happiest customers? Is there any way you can encourage that type of behavior with other customers?
No one wants to spend time fire-fighting to save customers. Instead, come up with a proactive set of steps to rescue at-risk customers. This will make a massive impact on your retention and help your bottom line.
There you have it- the 5 Signposts of Retention! By focusing on even one of these will result in greater retention, more revenue and happier customers and staff.
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Brands with incredible products get beat by the competition every day. Confusing messaging will cost you on every critical front of your business. Decoded Strategies delivers messing strategy & marketing services to communicate about your business in the way your audience actually wants to hear it.