Retention is Everyone’s Job

Most organizations place responsibility for retention with Marketing–-and that’s where a lot of the levers are:

The entire marketing department contributes to retention.? Even when it comes to acquisition, the people creating and placing messages that attract new customers also set customer expectations about the kind of relationship they’re going to have with your organization.? For example, the kind of people who sign up may be easy to acquire but hard to keep – for example, if they only care about price.

Ensure that everyone on your marketing team understands how their role contributes to retention.

But let’s take it a step further….and look at the bigger organization.? Maybe there are other levers to help your organization reach your retention goals.

If you are in charge of retention in your organization, ask yourself whether you can be an advocate across the organization. And if you can’t, maybe your manager can help you. If you have good data to show that streaming cancellations are caused by technical glitches and not boredom with the content available, for example, you might have a good case!

Here are some more levers to try.

CEO: Everything starts at the top. Does your CEO brag about retention, customer lifetime value or NPS scores the same way they talk about acquisition growth and/or overall revenue?? Do they even know these numbers? It might be up to you to make sure they have this data. Aggregate numbers can hide poor retention–for example, let’s say you have a pile of money to invest in acquisition, and you acquire a lot of customers, but they don’t come back. As a result, you might hit this quarter’s target, but if you were strategically tracking engagement, retention, and repeat purchases (even for a fraction of customers), you could spend your acquisition money more effectively.

Product:? There are “acquisition benefits” in any product: these are the features that make a customer transact.? “New and Improved” and so on.? But you need to balance your acquisition benefits with retention benefits–the features that drive engagement and expansion.? You want to strive for customer feedback like this: “I first joined the gym because it was near my office–but I stayed after switching jobs because of the amazing bootcamp program,” or “I signed up with Netflix to watch SquidGames, but I stay for the recommendation algorithm–there’s always something to watch,” or “I went to my first NBA game because my local team had a record-breaking scorer, but I keep coming back because the food is great and the ushers are so friendly.” They call that getting the fan (all great customers of any business are fans, hopefully) to come for the name on the back of the jersey and stay for the name on the front of the jersey!

Customer Care: A big sticky factor in driving loyalty is having a problem beautifully solved. If your customer reaches out to you with a problem and you help them with compassion and capability, they are likely to return again and again.? But you can take it a step further by changing from customer support to customer success. Customer success is more about solving problems before they arise, and ensuring that the customer gets the value they’re entitled to. It’s way more proactive than Customer Support.

Finance:? If they aren’t already thinking about how much investors love loyalty, educate them and encourage them to track your data differently. Recurring revenue is more predictable and gets a higher multiple than transactional revenue, which results in a higher valuation. If you look at the individual unit economics of each customer and dig into what it costs to acquire them vs. what it costs to get that customer to spend again and again with you, you’ll see how much more profitable recurring revenue is.

IT/Ops: No matter how good the product is if execution doesn’t work, then customers won’t come back. If the streaming is spotty, or the retail returns are complicated, you might be killing the proverbial golden goose.? Track the reasons voiced by your best customers for canceling, and if it has to do with the product not working as promised, do everything you can to escalate in the organization.

Conclusion

More organizations should take the time to track, understand and optimize for retention. As long as your customers have other choices, retention matters. Retention is powerful; it has a multiplier effect, it drives revenue growth and profitability,? and when done well, improving retention can be a secret weapon for your organization.

About Robbie Kellman Baxter

Robbie is the founder of Peninsula Strategies LLC, author of?The Membership Economy , and?The Forever Transaction , as well?the Instructor for 10 LinkedIn Learning courses including:?Create a Membership-Based Business ?and?B ecome an Entrepreneur Inside the Company .?Her clients have included large organizations like?Netflix ?,?SurveyMonkey , and the?National Restaurant Association , as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with subscription-oriented clients in more than 20 industries.

As a public speaker, Robbie has presented to thousands of people in corporations, associations, and universities. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business. Find Robbie on Twitter,?@robbiebax ?on Instagram @robbiekellmanbaxter and on?Facebook .

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