You’re Fired!
The trouble is, sometimes you don’t find out until your customer has hired another supplier - at which point it is too late to get your job back.
They call this customer churn, and there seems to be an expectation in many businesses that this is simply a fact of life. Unavoidable, like death and taxes.
Imagine if your business had no customer churn? What would it mean to your bottom line if the customers you acquired did not leave? - Less new ones to find if you want to grow. None to find if you’re at capacity. Instead of always being on the hunt for new clients, you just rock up to work, give your customers love, and go home at the end of the day knowing they’ll all be there tomorrow. Business utopia!
Everyone knows it is easier to retain a customer than gain a new one. But the curious thing is, I’ve seen few businesses that have a distinct retention strategy. Their retention tactics are typically lumped into the one marketing plan where the majority of the activities lean towards acquisition.
This seems counter-intuitive as it’s a lot easier to plug a leak in your bucket than to keep having to keep filling it up.
The reason is incentives. Growth is rewarded. Maintaining the status quo is not.
You cannot avoid all the LinkedIn gurus talking about funnels, GTM strategies, growth hacks, etc. They clog our feed because there’s an appetite for their promises. It’s proof we find hunting more alluring than farming. Compare the excitement that comes from winning a new customer compared to keeping one. When was the last time you popped a cork for retaining a customer?
As a consequence, keeping the finger on the pulse of your customer gets less attention. We rely on assumptions, bathing in the comfortable belief that we know our customers (and occasionally checking in with our confirmation bias to assure us things are all good in the hood).
If incentives were more strongly aligned with customer retention, I suspect many businesses could discover some surprising efficiencies.
When the All Blacks play Ireland, if they assumed the Irish would use the same tactics as they did the last time they played them, everyone would decry the All Blacks as being naive and stupid. Yet in business, our analysis of the customer is often lacking in breadth or depth, despite our dependency on them to pay our bills.
The All Blacks are always moulding their game plan to tailor it for each encounter. They do not assume things will remain the same. They know change is a constant. Business is no different.
Imagine if you had the whole nation looking to see how many customers you kept, and every time you lost some, your strategy, execution, and product/service became heavily scrutinised and debated. You probably pay a little more attention to retention!
And it starts with looking to be proven wrong. How many times has market research been used to confirm an existing belief? And if it doesn’t there was clearly a fault in the research methodology!
Our challenge is that we hate being wrong. We are experts. We know our business.
But there lies the opportunity to stand out.
Love being proven wrong.
Seek it out.
Continually test assumptions.
That way you’ll find new ways to do things while your competitors sit comfortably in their rut of incorrect assumptions and quietly get fired by their customers whilst beavering away at replacing them.
So instead of replacing your customers, build a retention strategy. And that begins with solid and fresh customer insights (not strolling down the easy street of assumption).
