There is a pretty simple metric to determine your impending growth or decline in sales: Run a 12-month trailing report on how many new customers with orders you have vs. how many customers quit ordering.
Your subscription program is the best way to see the health of your brand.
New subscriptions are the result of your recruiting and customer-acquisition culture. Cancelled subscriptions are caused by many factors.
With every order, you have an opportunity to either blow out a customer or secure them for life.
Which are you doing?
Which are you doing?
Many studies have proven that if we can keep a customer for three consecutive orders, we can keep them for years.
If those studies are true, what is the value of a long-term customer? 20 years at $1,200 a year is $24,000. Perhaps $2,400 of that is profit for the company, but up to $12,000 of it is commission to the sales force, which, for them, is oxygen.
There is a lot at stake in securing lifetime customers. The question is: What are we investing in that first 90 days to secure them?
“Event Opportunities”
Every event is an opportunity: an opportunity to impress and inspire or … generate a “forget it!”
👉🏻 Someone considers ordering. Are the choices clear? Are the ingredients, features, benefits, comparisons, reviews, and Frequently Asked Questions simple and easy to find?
👉🏻 Someone decides to order. Is the cart super simple to navigate? Is it designed for a 70-year-old or a 17-year-old? Are the shipping options clear in terms of cost and ETA? Is payment as slick as Amazon?
👉🏻 We receive the order. This is an opportunity to thank them, show them the order, confirm how it will be shipped, when it will be shipped, and when it is due to arrive. Are we doing all of that in a simple, easy-to-read format? SMS and email?
👉🏻 We pack the order and hand it off to the shipper. This is another opportunity to update the customer and include their tracking number link.
👉🏻 Transit time. This is an opportunity to educate the customer on what to expect when they open their package … what it will look like, how it’s packed, how our packing impacts the environment, and how to use the product.
👉🏻 A second communication during transit can give the customer an update on their delivery date. We can also provide more info on how to best use the product and include 5–6 testimonials from others who just got started on the product and are loving it.
👉🏻 A third communication during transit would offer an FAQ on that particular product. FAQ is a huge part of product selection on Amazon. Are we using it? Do we even have one on every product?
👉🏻 The day of delivery. We know when a product is delivered. Let’s celebrate it. It could just be an acknowledgement of the delivery. And it could include what the customer can do if they have a problem. What if it is damaged? What if it leaked? What if it is the wrong size? What if something is missing? What if it is the wrong product?
👉🏻 Every problem is an opportunity. Most companies use the “Hide and Hope” strategy. Let’s hide any possibility of a problem and hope the customer will not assert themselves. Are your exchange, complaint and return buttons large and hot links to expedite the process or are they dumb words designed to hide behind incompetency?
👉🏻 If I want to return the product, do you make it an inspiring process or a pain in my ass? Do you want me to take my time to box it up, label it, drive to the post office, and stand in line to return your mistake? If so, you lose me forever. If, however, you realize the cost of goods is not worth losing a lifetime customer over, and you tell me to keep it or give it to someone who may like it, you have me at hello.
👉🏻 The product gestation period. How long does it take for the product to “work”? How long before the customer ought to be “happy”? How long before they may be a Raving Fan? That is different for every product, but that period is an opportunity. An opportunity to educate and inspire. More FAQ, more testimonials, more education, more appreciation, more celebration. So many companies are not even confident enough in their products to want to hear from a customer during that gestation period. Again … the “Hide and Hope” strategy.
👉🏻 In one of my companies, our featured products were a 30-day supply of meal replacement shakes and a daily energy and mood drink. The number one reason customers cancelled their auto ship after a month or two was “too much product on hand.” Why? Because they were not in the habit of using those kinds of products EVERY DAY no matter what. We didn’t need to improve the product or lower the price, we needed to educate and inspire them to remember to use it every day ... to make it in their minds as valuable as air and water.
👉🏻 Time for a second order. If the customer purchased a 30-day supply, there is obviously an opportunity for follow-up at the 2–3 week mark suggesting a reorder or they may run out! This is an opportunity to trust our products and ask for an honest review. If it worked, we have the right to ask for the reorder. If it did not work, we have the obligation and opportunity to find out how to fix the experience, either by improving the product or the process.
👉🏻 The data always suggests that three consecutive orders is the Holy Grail of Lifetime Retention. If we get the second order, what do we do to deserve the third order? That is another cycle of opportunities. This may be an opportunity to offer an incentive: free product, a coupon or free freight. Remember the value of the lifetime customer, to us and to our sales force. What are we willing to invest to secure them?
The 10 Mistakes of Customer Retention
1️⃣ Failure to communicate the 3 Fs: Frequency, Friendliness, and Fonts I Can Read.
2️⃣ Failure to prioritize the investment capital in retention. What is your “first 3 orders” retention budget? Who is in charge of that department?
3️⃣ Failure to empathize with the fears and frictions of becoming a new customer.
4️⃣ Hold times over 1 minute. (And stupid messages like “due to unforeseen higher-than-normal traffic.)
5️⃣ Live customer service reps who do not speak my language clearly.
6️⃣ Rude or apathetic customer service not empowered to make creative decisions.
7️⃣ Lack of email, text or chat options. (Personally, I don’t ever want to call anyone, anywhere, anytime, no matter how nice they are.)
8️⃣ Customer service that prioritizes saving the company money on errors and “just follows the rules.”
9️⃣ Transferring me to “another department” so I can stay on hold another 20 minutes listening to crap music.
🔟 Asking me to return the product. Are you kidding? Product that has a COGS of 15% of what I paid for it, and you want me to undertake the return hassle, from boxing it up to driving and standing in line, because YOU made a mistake?? Give it to me. Suggest I give it away. Suggest I throw it away, but never, ever, ever ask me to ship it back!
Making the most of every event and avoiding the 10 mistakes of customer retention can secure customers for life versus them hightailing it somewhere else. Try it, and just see how it impacts your 12-month report.
The Work Is Worth It,
Richard Bliss Brooke
P.S. My blogs are, for me, a conversation. I rant for a bit and then … if so inspired, you respond. Your comments close the loop of conversation. They let me know I was heard. They let me know I contributed something … or not. I encourage you to close the loop … or open a new one and say something.
Terrel F Transtrum
September 12, 2022
RBB, your insights reflect your decades of hard work in the trenches. The blog itself is so rich that you could take each topic and develop it further for a year. To bring the customer and distributor experience into focus from a management angle, a good question for your readers might be, “what is the mission of the customer service department?” The simple answer would ultimately boil down to this: keep customers and distributors happy. It’s a mission that is loaded with all the points you make here. Thanks for your timeless leadership. T