With the rise of the app economy and the shift to subscription-based (often freemium) models that come with it, there's been an increasing focus on retaining customers. In this new world, customer retention is the new customer acquisition. Unfortunately, improving retention is especially challenging because it often involves making changes to your product that you cannot track instantly. With this in mind, here are five proven techniques for improving customer retention without changing your product drastically.
- Provide support. Most people don’t expect there to be support for apps. So, they promptly delete them at the first sign of trouble -- be it a crash or setup dead end. Make sure that you establish from the get-go that you're available if anything goes wrong. Prominently place a "get help" button (like this one) on your initial splash screen that leads to an email composer, or something a bit more robust. Over-communicate that you’re going to get back to your customer quickly (unless you don't plan on doing so). Make sure to look at your analytics to see what steps lead to the highest attrition, and add a similar "need help" prompts on those pages (or any blank page/dead end).
- Survey every customer. Satisfaction surveys not only help you instrument a better product, they also help you identify at-risk customers before they leave you. This is why Evernote CEO Philip Libin loves his angriest customers: “Complaints are great...they tell us where our product or overall experience is failing.” Savvy companies drive all poor ratings directly to an assigned sales or support team for email follow-up. Informing them of upcoming product enhancements, offering discounts or simply letting them know that you’re listening is worth doing. Use positive ratings to identify people for VIP programs or for driving social promotion. We found that in-app satisfaction ratings have the highest response rates, but email surveys are a nice way to reach inactive users. Be sure to keep your surveys brief (1-2 questions) and make sure emailed users don't need to go to a separate survey site to complete the form. Don’t just take a sample either -- try to ask everyone you can.
- Don't automatically downgrade users. If a user misses a payment, they’re often downgraded to a free version of the product. Avoid doing this, because a user will often log in later and not realize they’ve lost some premium functionality. Instead, put them into some sort of “deactivated” state that makes it clear what functionality has been lost. Then, make it easy (a single click + credit card form) for them to get it back.
- Offer discounts to accounts before they churn. If you analyze your cohort retention rates, you might discover a certain timeframe that has an increased level of churn. Some products won't have this -- they'll consistently churn out the same percentage every month. But if yours does, you can consider proactively and automatically offering discounts based on their continued usage. This is undoubtedly risky and should only be considered if you have some serious churn issues (which you should hope to eventually correct with product improvements). You should also make sure they have to jump through some minimal hoops to get the discount (like filling out a more in-depth satisfaction survey). Bonus points for driving them to tweet/like the fact that you just gave them an unexpected discount.
- Require a reason for downgrades and cancellations. If you don't know why a customer is leaving you, it's really hard to figure out how to increase future satisfaction. And making the downgrade reason optional means most people will just skip it. Turn mandatory responses into direct tickets that your customer team can categorize and hopefully follow up on (just like they do with your satisfaction surveys). The right follow-up can often rescue a customer. Finally, the right language goes a long way too -- be sure to communicate how important this information is to you and how much you appreciate the favor.
The path to customer retention nirvana comes through building and iterating your product with your users. There's no substitute for a great product or antidote for a terrible one (though excellent marketing can do a good job of covering it up). These five tips should provide some easy wins to bump it up a few percentage points.
Richard White is a Co-founder and the CEO of UserVoice, where he focuses on making sexy products for un-sexy markets like customer service. He’s proud to say that his works give people more time to waste rather than waste more of their time.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.