Yesterday, I blogged about the importance of customer retention in a subscription business and the first two steps toward churn reduction and customer retention. These were:
- Track customer retention and churn in a way that helps you address the root causes
- An executive needs to own the retention number and the organization needs to be structured for customer success.
Today, I’ll cover the last two steps.
#3. Retain customers by understanding their engagement with your business and responding appropriately
Sometimes this is called usage monitoring, customer intelligence, or customer engagement. This is a vital component of any online business’ customer retention strategy.
What is it and how you do it?
Imagine if you could spot a customer who is a churn risk well before they churn and take action to make them more successful with your business so that they don’t churn. This is what customer usage monitoring and response makes possible.
Then, for each customer, each user, each account, they track:
- How often they visit and for how long
- What actions they take in their system
- Their progress against business metrics that matter to the business.
The real power comes when companies use this data to respond proactively to customers based on their behavior and engagement. They can respond by phone, by email, or right in the application itself with an in-context message.
Here are a few examples from some of the customers with whom we are working. You can think of this as steps in customer engagement maturity
- Score customers on key performance indicators. Most companies are doing some of this. You capture business metrics.…like the number of things they use your system for numbers of users with whom they connect or collaborate.
- Look at visit behavior. Many companies trigger phone calls and email to their customers if their visit behavior changes. For instance, if their customers haven’t visited in x amount of time or if they are only spending a few minutes per visit, then they will reach out by phone or email.
- Look at key actions and features usage. Companies at this stage are posting in-context messages in their application and/or sending emails to their customers to encourage them to use key differentiated features or finish set up steps
- Use predictive analytics to analyze the data they have collected and look for unexpected contributors to churn that the data shows you. More sophisticated analysis can give you deeper insight, for instance, these are the behaviors that customers’ who churned displayed in the months prior to their churn.
#4. Design and build product that retains customers
Product is essential. The most important thing. If the product is off, no other strategy will help.
Three things to consider
- Initial Onboarding. Is your product easy to get set up? Do customers start using it and then stop? Is it not worth the time and are they just too busy to get over the hurdle.
- Ongoing value. This is obvious. Does your product add value and how much. Another thing to consider in a subscription business is how much value your product offers over time. Sometimes you can get 80% of the value out of a product in the first few weeks or months. That makes churn likely.
- Quality and ease of use: Is it high quality, accurate, helpful, and easy to use. Customers can get fed up, lose trust, and move on.
The second item, providing ongoing value is a strategic effort. But the other two, initial onboarding and quality/ease-of-use can be improved incrementally.
- We were talking above about digital measurement for understanding individual customers. Usage monitoring can help you with product as well. You can see which features are used and which aren’t. You can see where in a setup flow people are getting stuck.
- You can survey and ask your users what they like and don’t like, where they are getting stuck etc..
- You can use in-context messaging to improve the customer's experience right in your product experimenting and learning rapidly. Then, when you discover what works best, you can implement aspects of that directly in the product.
So to retain your customers, you have to focus on retention, track retention, organize around retention, build a product with retention in mind, and implement a customer engagement tracking and response solution to maximize your customer success. This last one is what Apptegic is all about. We’d be happy to give you a demo.