Shiny objects that are screwing up your retention strategy

Hi, Val here!

PSA: this one’s for the peeps who are tasked with retention KPIs and overwhelmed by where to begin.

If it all feels like too much to tackle, lean in, and let’s chat.

If I had a quarter for every marketer who quoted the (completely unsourceable) stat that it costs 5x as much to get a new customer than to retain an existing one, I might be able to sponsor this newsie. But, alas, I have zero quarters and yet marketers everywhere keep saying those words.

So anyway, despite the overuse of that phrase (and its questionable roots), it’s truly not hard to believe that customer retention is important.

I mean, you’re here reading about customer experience and retention, so I hope that’s already clear to you. And, thankfully, those of us who have been screaming into the abyss for a decade or more finally have some company in our ranks.

Brands are hiring more and more retention marketers. There are communities – and entire conferences – popping up to bring retention minds together. SaaS companies are bringing brand-side retention peeps into their fold to support their customers and help them grow (hello from me and Eli). And “retention” doesn’t just mean email. It’s the full customer experience.

Nik saw it all in his crystal ball:

It’s a full-funnel motion that brands are finally catching on to. And here’s the best part:

Customer retention is mostly cool because you can do so little and have such a huge impact. That’s the secret, friend. I’m a lazy marketer.

I love this field for many, many reasons, but it doesn’t hurt that since the customer retention bar is so low, a few tweaks to your program can make a major difference. 

In a recent interview, Olympic star Raygun, the Australian who competed(?) in the newest Olympic sport of breakdancing, said, “I was never going to beat those girls on what they do best, the dynamic and power moves, so I wanted to move differently, be artistic and creative…” and that’s what we’re channeling moving forward with our retention strategy.

While everyone else is over there making fancy new moves, you can whip out the old-school sprinkler and become an international superstar.

And like Raygun’s Olympic performance where effort ≠ impact, your retention game is going to be pure impact with very little effort. Because we aren’t going to spin on our heads until we can master the worm.

/end breakdancing analogy 

Ready to work smarter and not harder? Here are the things you can set aside in your retention strategy:

1. Deep segmentation in emails:

I’ve audited a lot of email accounts and have seen both ends of the extreme:

• One list, everyone gets all the same emails

• More segments than a centipede, with 10 customers in each segment

Believe it or not, there is such a thing as too much segmentation. Of course, every brand has unique needs, so I can’t sit here and give you a magic number of segments you should have, but the absolute basics are below.

I’ve seen too many people stall out because they’re overwhelmed by all the ways you can segment, so here’s your game plan:

1. Engaged in the last 60/90/180 days (either all 3 or pick one that makes sense for your purchase and messaging cycle)

2. VIPs (multiple purchases or long-time customers)

3. Engaged non-purchasers

4. Un-engaged non-purchasers

5. Un-engaged past purchasers

From there, you can look at:

1. Purchase types 

2. Location

3. Onsite behavioral data

4. Subscription behavior

5. Amount of spend

But, again I will caution you, please do not get too in the weeds here. Get those first 5 set up and then – and only then – go into some of the deeper segmentation.

2. Silo’ing your retention efforts from your brand’s growth efforts:

When I talk to retention folks, they’re all stoked on zero and first-party data collection. And rightfully so!

Gathering data from your customers and site visitors to help guide them in their journey with your brand is smart marketing in 2024. Leveraging a quiz or survey on your website can help you gather valuable data you can use later on down the line.

The trick is actually using that data.

Retention and acquisition are often siloed apart with different people in those roles. But you can work together!

Think about how useful all of that zero-party data would be to your acquisition team’s retargeting efforts. Think about how your website team could leverage data that shows an opted-in prospect has visited your website 3 times in the last week.

Nothing but impact and opportunity right there.

So talk to your growth team about pointing some spend at the page that hosts your quiz. I know that driving traffic anywhere but a PDP is a wild idea to growth people, but it’s worth at least a conversation.

What could happen if you invest dollars in driving traffic to that zero-party data collection site? 

3. Focusing on a loyalty program when your customers aren’t demanding it (yet):

Loyalty and membership are hot topics these days. And with good reason – some brands are seeing major success with these programs. But there’s a cautionary tale in here, too.

What you aren’t seeing is that those brands that have been most successful with loyalty and membership got there through customer demand. 

Please don’t get distracted by the shiny object of loyalty programs.

Loyalty and membership are truly great programs that can enhance your retention efforts, but they’re 1) a big lift for you and 2) more work than they may be worth early

4. SMS:

Okay, this is a hot take, but I’ll keep it brief: do not bolt on an SMS program if you’re just going to use it to send the same thing you’re sending via email.

My one and only use case for this is if you have a truly important email and you want to make sure they see it. Then – and only then – can you set it up to send the SMS if the email isn’t opened or clicked within a set number of days. Otherwise that SMS does not send if they saw the email.

There will be outliers here, so before I get hate mail for this, know that if you’re an SMS-first brand or you’re using SMS for transactionals, then, of course, keep going, but what I’m saying is if you’re thinking of adding on SMS is going to help your retention efforts, look elsewhere.

5. Not talking to your customers:

When I was a consultant, I ran a lot of customer interviews. It was a required part of working with me. Want my help fixing your retention problems? I have to talk to some of your customers. Not 100 customers or 50 or even 20. I can talk to 8-10 customers and know most of what’s going on. Why? Because I know how to run a customer interview. So let me give you a few tips:

A. Leave the list of questions behind: Do I have a list of questions I use in my customer interviews? Yes. Do I go down the list and ask every single one? Absolutely not.

The trick is that these are customer conversations, not true interviews. You want to be able to follow threads, pull on them, and see what unravels.

If you just pop down your list of questions, you’ll get surface-level answers for everything, which isn’t helpful. You have to dig in and treat it like a chat, not like your customer is on the witness stand.

B. Talk less, listen more: Don’t be afraid to say things like “What do you mean by that?”, “wait, go back to that last part and say more,” “Why do you feel that way?”. You have to run customer interviews like a curious 5-year-old. The more you ask “why” and let them expand on what they just said, the better. 

C. Check your biases: Sometimes we’re our own worst enemy. If you have preconceived notions about what should be or can’t set aside your own opinions about your brand, then please hire someone who can. While they’ll still have biases – we all do – an outside set of eyes and ears can remove potential friction here.

When I did this for other brands, I always started by saying, “Hey, I don’t work for this company full time, and I’m not personally invested in the product, so you can be as honest as you want, and it won’t hurt my feelings.”.

It’s amazing what people will share when they feel like they have a safe space to just be themselves.

Lazy Easy Mode, Activated:

There, doesn’t that feel better? That’s what it’s like to lighten your load. Get a little lazy. Let a few things go so you can focus on more impactful efforts.

Retention doesn’t have to be hard and this is your path to turning on easy mode.