Earning customer loyalty is an uphill battle, but it is always worth the effort.
You’ve seen the data: the Harvard Business School report that showcased how, on average, increasing customer retention rates by 5% increases profits by 25%-95%.
Much to everyone’s disappointment, traditional business publications often only have top-level coverage on tactics concerning retention and churn.
You’ve heard the amazing feats from places like Disney World, which has a 70+% return rate for customers. How can you get people to love your business like that?
There are no easy answers, but hopefully this round-up will put you another small step forward. It’s a collection of some of my favorite reads on loyalty, churn, and retention, with a bias toward online businesses (particularly SaaS and ecommerce).
Customer Support & Happiness
I’ve written about improving service, loyalty, and retention for about 2 years now. This resource is a beautifully designed re-cap on some of the most important advice and research we’ve gone over on the Help Scout blog.
From our friends at BigDoor. Let me to assure you that Joanna Lord and Ashley Tate write some of the most insightful pieces on loyalty out there. You’ll walk away with a lot of notes.
This is a bit of a different take on loyalty, which is why I’m featuring it near the top. The Buffer team, known for their transparency, publishes a stellar monthly report on what they’ve been up to behind the scenes to create and keep a massive customer base happy.
Companies who say they “love” customers but place support as a low priority are just posturing. This piece by Jack Altman explains why service is intrinsically tied to all aspects of your company.
A simple title, but a wonderfully insightful article by Joanna Lord (formerly of Moz) on creating a “loyalty measurement framework” that can help you track results.
The concept of a “frugal wow” is one that we love, because it places the emphasis back on the action rather than the expenditure. Bootstrapped businesses take note: goodwill can be built without deep pockets.
In this Qualtrics article, Dr. Scott Smith explains how companies can utilize four different measurements (and example questions) to get a sense of customers’ overall satisfaction.
Customer happiness is not a simple process that can be outsourced or handed over to one department. Creating happy customers starts with understanding them, which is why getting in the trenches via Whole Company Support is key in helping every department learn how to interact with customers.
37 Signals (now Basecamp) support superstar Chase Clemons knows a thing or two about customer support. Since support has such a meaningful impact on loyalty, and since much of your communication with customers will be through email, you should brush up on your skills in writing emails customers love.
Loyalty programs aren’t for everyone, but if they are a fit for your industry, you need to see this research from Professors Dreze and Nunes on the “endowed progress effect.”
From Buffer’s wonderful Courtney Seiter, this is the best place to start putting together a strategy for keeping tabs and saying thanks to all of your customers across multiple social networks.
“While manufactured delight can lead to great press, it’s not much of a customer generation or retention strategy in practice.” Michael Redbord makes the necessary argument that the exceptional cases of service are just that: out of the ordinary. Long-term retention is built around the fundamentals: speed, accuracy, and completeness.
A brave piece on why the current obsession with “growth hawking” (the dark side of growth hacking) may be ruining your company’s customer experience. The bump in user signups may be temporary with an aggressive “spam your users” strategy, but the customers you lose (and the stain on your brand) will last forever.
“Being merely correct doesn’t make for happy (or even satisfied) customers on its own.” A short but very important article on delighting users; answering their questions accurately is just the price of entry. Great support identifies the proper tone that your customers expect and makes good use of it (whether it be casual or more serious).
This list wouldn’t be complete without at least one case study of a company taking a look at some real support metrics. Zapier delivers in spades here; if you’re a numbers person, be prepared to take some notes.
Surprise! Most customers do not want to “engage” with your business. This research from HBR found that customers actually care about shared values.
Simply giving support reps a “spending limit” to delight customers is missing the point. This piece on the Harvard Business Review details why guidelines and coaching are more important to educating service reps than hard limits and robotic scripts.
Your support team needs to play a much more important role than simply being the voice that says, “I’m sorry.” This article from Mig Reyes of 37 Signals / Basecamp explains the art of teaching the support team so that they can “feed themselves.”
“Imitation may be the highest form of flattery, but it is not innovation.” Part of a great customer experience is seeing things you’ve never seen before. Copying and pasting your experience strategy will leave you sweatin’ and stealin’ a year-and-a-half behind, as Rudyard Kipling would say.
From the source (Fred Reichheld) himself, this is a great starting point for understanding the all-important Net Promoter Score and how it can help you gauge customer sentiments about your product.
Retention and Onboarding
If you read any ForEntrepreneurs article, make it this one. It’s the most essential overview to the metrics that matter, with a distinct focus on retention and churn.
Samuel Hulick definitely fulfilled a huge need by providing what is the best step-by-step teardown on top companies’ techniques for onboarding new users. If you like what you see, also be sure to check out the full book.
Brennan Dunn is someone who truly knows how to implement those little extras that “wow” new users, but this critique offers up a far more detailed showcase of just what he does right with his startup, Planscope.
Expecting customers to succeed with your product without your help is expecting too much. Lifecycle emails serve as “polite persistence” to help guide users to the features and practices they’ve been missing out on. Here’s Samuel Hulick’s primer to get you started.
Don’t worry, it’s not so evil. Lincoln Murphy explains in this article what companies can do to improve their retention, without frustrating customers who already have their foot out the door.
Your CLV is a prediction of the net profit attributed to the entire future relationship with a customer. Mike Bal of Single Grain examines the how and why of stepping away from acquisition to focus on increasing this highly important metric.
Building a successful SaaS company is a long uphill battle. Customer delight for the long-term is taxing, but this talk at the wonderful Business of Software conference discusses how to make the climb.
Actually a video of a presentation, still very much worth your time to get a HubSpot founder’s take on creating an strategic retention through customer happiness.
Alex Turnbull explains why hearing cancellation reasons is necessary in improving your product, even if they hurt your ego. After all, progress can’t be made in a positive feedback echo-chamber.
Marketing analyst Lars Lofgren explains how the KISSmetrics team is able to get such valuable feedback from their customers and how you can do the same.
Getting to know your customers means talking to them, and a well-constructed survey allows you to do that at scale. This Inc. column is a great place to get started.
This is a quick, concise article that I believe highlights the concept of G.L.U.E, or giving little unexpected extras. The best part: it’s written by acustomer who was totally won over by this company’s exceptional intro-email.
Did you know that 70% of consumers expect a company website to include a self-service application? The numbers are equally as aggressive for mobile users. People want tools that can help them help themselves. (Just remember that great self-service requires great design.)
This article from Wistia’s Alyce Currier is my favorite one to recommend for helping companies get started with “help” video content. It’s such an important form of self-service, and you need to be able to do it right.
How Help Content Improves the User Experience
The first line says it all: “Though often under-appreciated, well-written help documentation can improve the user experience and get people back on track when they stumble in complicated workflows.” It’s the very reason we created Help Scout Docs.
Churn and Customer Success
Defining Your Churn Rate (No, Really)
For SaaS, perhaps nothing is more important than constantly tracking (and improving) your churn rate. Shopify breaks down how to really measure your churn that goes beyond [number of churns over period] / [number of customers at beginning of period].
It’s your job to ensure that customers succeed with your product. Customer success is thus one of the most important “non-glamorous” jobs at your company, and this article offers one of the better overviews of how a smart customer success strategy increases overall happiness.
I consider this a great starting point, perhaps a “best of” for Lincoln Murphy’s wonderful blog Sixteen Ventures. Each article is concise, thoughtful, and explores the angles that matter when it comes to getting customers to stick.
In this article, you’ll see why “activity churn” is what you should measure and how you can reengage customers who have stopped using your product.
Ross Beard of Client Heartbeat takes a look at common causes of customer churn (different expectations, competition, etc.) and outlines how companies can keep customers around by communicating their value clearly.
David Skok’s ForEntrepreneurs blog is held in high regard, and this article will show you why. It’s an essential read on why churn is the make-or-break metric for lasting SaaS businesses
“Customer Success has a much longer, and ultimately deeper, relationship with the customer than sales or anyone else in your company.” From Jason Lemkin’s exceptional blog, you’ll get the low down on hiring and implementing a stellar customer success team.
From our friend Chris Hexton, this is a long but very well developed take on identifying the metrics that matter for your business, as well as advice for stepping back from acquisition to focus on extracting more value from the customers who already pay you.
Previously, Michelle Sun helped with growth at Buffer, and in this article she examines the six techniques Buffer has employed to keep users coming back. Well worth the read.
Despite my reservations with the phrase growth hacking, this is a smart look (with a presentation) on actionable ways SaaS companies tame an out-of-control churn rate.
A very smart look at a few successful cases of reducing churn for web apps and software companies.
Patrick McKenzie (also known at patio11) presents a beautiful case for tackling this startling fact: “40–60% of users who sign up for a free trial of your software or SaaS application will use it once and never come back.”
Faced with a worrisome 4.5% churn rate, this company decided to take a closer look at the metrics that mattered, and they adjusted their messaging for a big win.
Provocative title, but a very important reminder that when you’re talking to customers, you probably aren’t listening closely enough. “The purpose of customer interviews is to extract insights from the minds of your customers. Talking can’t achieve this; only listening can.”
If you find this article valuable from a retention perspective, Zach Bulgyo’s wonderful roundup is the equivalent for customer development. You won’t need to read anything else to get started with customer development.
The Data on Why Retention Matters
I appreciate your dedication in making it all the way to the bottom.
Last but not least, be sure to check out our collection of customer retention data that puts the effectiveness of “sticky” loyalty in plain sight.
Gregory Ciotti is the marketing strategist at Help Scout the invisible email support software for small businesses who love their customers. He writes about creative work and human behavior at Sparring Mind