Let's Stop Talking About Retention

The (corporate) word of the day: Retention.

Every. Single. Day. 

Retention is the hot buzzword buzzed across boardrooms, business conferences, and executive communications. If I had a nickel for every time I heard “customer retention” and “employee retention” discussed recently, well, I’d be able to buy a private island. Maybe a football team. Possibly a small country.

What I tell everyone who wants talk about fixing “retention problems” is that it’s the wrong goal to have. Chasing after retention is a lost cause, because retention isn’t a cause at all - it’s an effect. It is the effect of maximizing the factors that matter most to the success of your customers and employees.

Focus on The Success Cause(s), Not The Effect

“Stay at cause, not at effect.” Coupa CEO Rob Bernshteyn sagely reminds in our leadership training. Staying at cause is having the ability to shape, drive, and impact outcomes. Being at effect is only worrying about the outcome and not taking ownership of what you can actually impact and drive.

I’m fully aligned with Rob’s advice--a simple mindset change goes a long way in achieving your goals.

For example, if you want to become a CMO, you should stay at cause--focus on strategically shaping your company’s leadership position in the marketplace, driving revenue, building tribes, and consistently nurturing your team to ensure their success. While this won’t guarantee a role in the C-suite, it will increase the probability of securing your wanted effect. 

This principle holds true whether you’re aiming to lose a few pounds, save for a big purchase, or retain your customers and employees. Let’s stop obsessing about retention, and start focusing on what actually delivers that outcome.

3 Causes That Drive Customer and Employee Retention

In today’s pay-as-I-go mindset and model, customers can cut the cord at any time, making customer retention all the more vital. Similarly, in today’s workplace, the stay-as-I-grow model is the mantra for employees, which makes employee retention a big challenge today. However, solving these challenges involves a simple mindset shift--from at effect to at cause.

In the chart below, I highlight the at cause factors that lead to the effect of retention. It illustrates the mind shift from customer and employee retention to customer and employee success. It also illustrates the specific at cause factors that maximize customer and employee success which in turn maximizes the effect of retention.

Let’s start with the at cause factors for customer retention: 

Drive Adoption: The first cause to the effect of customer retention is focusing on adoption. In B2B, this means that you must be relentlessly dedicated to delivering measurable value that ensures that your product is used by the people who are supposed to use it the way it's supposed to be used.  Without this, there is no path to customer retention. As software companies, we are not in the business of creating revenue, we are in the business of creating value--and this starts with each customer getting value out of what they’ve already purchased.

Focus on Expansion: Secondly, your team must focus on growth. For your business, this may be called “expansion.” The likelihood your customer will stick around increases when they purchase multiple products. But--only after your customer is happy with their initial purchase should focus on selling additional products and services. Many a marketing team doesn’t thoughtfully market to their existing customers - many times makes the mistake of positioning additional products too early or not understanding the current adoption pattern of that customer. My cable provider, who I’m not currently happy with, made the mistake of promoting a bunch of new products without caring if I was happy with my current subscription, which had the opposite effect of retention - it reminded me that I have been wanting to switch providers!

Nurture Advocacy: Finally, focus on creating tribes to nurture the cause of advocacy. Tribes have a unified passion for your brand and will shout their loyalty from the rooftops. To build a tribe, a key tactic would be providing a common benefit that can only be obtained as a member of that community, such as educational opportunities or capabilities in your product such as community intelligence from the collective data shared by tribe members. Then, focus on telling the personal stories of the heroes in your community and elevate their status as rock stars within the tribe. Together, these initiatives maximize the very important at cause factor, advocacy.

Let’s now shift to the  at cause factors for employee retention. Inside your organization, similar rules apply. You simply cannot achieve employee retention by focusing on employee retention. Here are three simple causes which ultimately drive the outcome of retention: 

Create a Sense of Purpose: Start by helping your employees identify a sense of purpose. The easiest way to do this is to make sure that every employee feels that they are the “CEO” of an initiative that has meaningful impact to the organization - without a clear objective and value to the organization, it’s fair to question why they’re doing the work in the first place. This means making sure they know what they own and “wear the jacket on,” so to speak. 

Ensure a Sense of Pride: Employees must also feel a sense of pride in working for your company and team. This starts with hiring the right people -- always trade up on culture fit and trade down on talent alone. As former Notre Dame coach Knute Rockne once said, “I want to play my best 11, not my 11 best!” This means that you should focus on nurturing your best team versus focusing on each individual, as being part of a winning team is the best way to create a sense of pride. At Coupa, we want to make sure that every employee is proud to work here. I’m personally proud to share that 95% of our employees say they are proud to work at Coupa in this year’s Great Place to Work survey.

Build a Sense of Growth: Finally, employees should have a clear career path and sense of progress from point A to B and beyond as they thrive in your organization. Are they advancing their careers and growing as people, not just succeeding in their jobs? As well-know author Daniel Pink says, employees are intrinsically motivated by mastery - the desire to continually improve at something that matters. By designing a learning platform that empowers employees to continually hone their craft via exposure to thought-leaders, mentorship programs, and management training, we can better create a sense of growth in our employees.

All these, built on a foundation of core values, serve as a guidepost for your strategies, decisions, and daily actions. At Coupa, we’ve had our three core values that have been a guidepost for our decisions and daily actions for the past 9 years: Ensure Customer Success, Focus on Results, Strive for Excellence. Our strategies and tactics have changed but the foundational core values have remained the same.

A Final Thought: One word you’ll notice I didn’t use here is “satisfaction.” 

As our CEO Rob Bernsteyn says, it’s extremely important to not aim for customer satisfaction or employee satisfaction but only aim for their success. 

It’s quite possible to have a “satisfied” customer who isn’t successful and you can have a “satisfied” employee who will jump at the next offer that comes their way. For example, we now value the school teacher whose approach focused on our success, not just on making us happy.

We must stop striving for both “satisfaction” and “retention” and instead focus on success and what causes this outcome. 

The next time someone says to you, “let’s talk about retention,” stop the conversation in its tracks and say “drop the R word, that’s the effect, let’s talk about the factors that are at cause.”

Not staying at cause means your retention goals will become a lost cause.

#customers #marketing #advocacy #customer_success #employee_motivation #employee_success #motivation