This is Article #5 in the Customer Retention series.
This 9 part series teaches you how to build a predictable customer retention strategy using customer insights. By the end of this series, you’ll be on your way to confidently increasing your customer retention.
- Why Customer Retention Is So Hard to Improve
- 3 Tools to Improve Customer Retention (only 1 is software!)
- The Best Customer Retention Strategy for Growing Companies
- How to Build a Predictable Customer Retention Strategy
Hold onto your seats!
In this article, we’re going on a wild ride. You’re going to learn the ‘small wins to create big gains’ strategy that led a pro team from zero victories to becoming one of the most powerful teams in the sport in just 10 years. We’re going to use their winning strategy to find small customer insights wins and compound them into large customer retention gains.
110 years of failure
Whether you’re a fan of cycling or not, you’re going to be impressed with the feat the British Cycling team managed to accomplish in 10 short years. They went from zero Tour de France wins in 100 years to winning 6 Tour de France races in 7 years.
Even more impressive is that in an ultra-short 5 years, British Cycling went from winning 1 gold medal in 104 years of Olympic participation to winning 60% of the track cycling medals in the 2008 Beijing Olympics.
How did they do this?
In 2003, Sir Dave Brailsford was hired as the head of the British Cycling team. British Cycling had such a bad reputation that bike companies didn’t want to sell their bikes to the team. Companies didn’t want to be associated with the British Cycling team.
Brailsford, who held an MBA, was looking for a 180 degree change. He wanted to create a winning team. He wanted companies to compete to have the British team ride their bikes. He was looking for a monumental change.
But to get there, he needed a strategy. Looking to his MBA education, Brailsford decided to use the Japanese principle of Kaizen. Kaizen is a strategy where employees of all levels of a company work together to proactively achieve regular, incremental improvements to the manufacturing process.
Brailsford wanted to apply the Kaizen strategy of regular, incremental improvements to turn around the reputation of the British Cycling team. They would win big by compounding their small gains.
Forget about perfection. The focus was on progression. And compounding the improvements they achieved.
Brailsford recalls, “experimenting in a wind tunnel, we searched for small improvements to aerodynamics. By analyzing the mechanic’s area in the team truck, we discovered that dust was accumulating on the floor, undermining bike maintenance. We painted the floor white, so we could spot any impurities. We hired a surgeon to teach our athletes about proper handwashing so as to avoid illnesses during competition. We also decided not to shake any hands during the Olympics. We were precise about food preparation. We brought our own mattresses and pillows so our athletes could sleep in the same bed every night. We searched for small improvements everywhere and found countless opportunities. Taken together, we felt they gave us a competitive advantage.”
Competitive advantage indeed! In 5 years, the team had won 60% of the track cycling medals at the 2008 Beijing Olympics. By 2012, they had won their first Tour de France title. From 2012-2018, British cyclists dominated the Tour de France by winning 6 times!
Using customer insights to win big
In the last article, you were given the formula to build a predictable customer retention strategy. You’ll use this simple, predictable strategy to find the small customer insight wins that will compound over time to give you large retention gains.
When you first launch your strategy, you won’t notice much of a difference in retention. But over a short time, your small customer insight wins will add up to large impacts on your retention. This graph by James Clear, the author of Atomic Habits, shows you how powerful a daily 1% change adds up to a big difference over time.
By now, you should see that focusing on small changes leads to powerful end results. But there’s one more thing we haven’t touched on yet — this strategy will also build your clarity and your confidence as your small customer insight wins start to accumulate.
My hope for you is that you can proudly show your executive team and your board that you are confident in your ability to increase customer retention. Now, wouldn’t that be amazing?
Before we go any further, I want to recap some of the parts we’ve covered so far in this series. These parts are important to remember as you launch your strategy and start searching for your small customer insight wins.
1. Customers make decisions based on feelings, then they justify those feelings with reason. (article 1)
2. Early churn is caused by Buyer’s Remorse. Buyer’s Remorse is when customers quickly move from feeling hope or excitement about their purchase to regret. (article 1)
3. There are 25 churn factors that affect your customers’ decision to stay or leave. (article 1)
4. There are 3 tools to improve customer retention: bits & pieces, software and customer insights. In this series, we’re focusing on increasing customer retention through customer insights. (article 2)
5. Customer insights are informally, formally, actively, or passively collected. (article 3)
6. There are 3 principles of a customer retention strategy:
When you’re first starting out, keep your strategy simple.
Your first customer retention strategy should start with one team.
The customer insights data collected through your retention strategy should be both continuously collected and collected for specific projects. (article 3)
7. Your mix of customer insight components will vary depending on your goals. Your strategy needs a mix of monologue, dialogue, shallow and deep customer insights. (article 4)
8. The formula to create your simple, predictable customer strategy is to pick 4 customer insights activities (article 4):
9. Start with small wins. Continuously improve.
Your early customer retention strategy
Regardless of your company size, if this is the first time you’re creating a formal customer retention strategy, you need to keep it simple. I can’t stress this enough. You want to take the time to get predictable results before you add complexity to your strategy.
In the Early stage, you will focus on using the 4 customer insight activities you chose earlier. Analysis and reporting at this stage will be basic. The focus in the Early stage is on priority retention areas like onboarding. I started off this series with a discussion about how all humans make decisions by feeling first and then justifying their feelings with reason.
When customers first purchase, they are at an emotional peak – they have hope and are excited that your product can help them with their problem. If the customers’ expectations aren’t met or the customer has a poor experience, they can quickly fall into Buyer’s Remorse. This is why onboarding is a priority retention area.
You can also focus on pre-renewal as a priority area. When we launch our client’s new retention strategy, we always focus on onboarding first. Once we’ve accumulated some small customer insight wins, then we look to pre-renewal as the second priority area.
You’ll also want to launch your customer retention strategy with one team first. Given our clients are SaaS companies, we always launch the strategy in Customer Success. If you don’t have a Customer Success team, you can launch your strategy with whichever team in your organization is responsible for customer onboarding.
At this point, I’m not going to talk about Growing and Mature customer retention strategies. You can look at the diagram to see how your strategy will become more complex over time. One thing to note is that the Growing stage requires support from your executive team and multiple teams will provide input and data. We recommend creating a formal team which oversees the customer retention process. The team can be a committee or a formal department in the company.
The next article is where the rubber hits the road and leads you to customer retention gold. You’ll learn the right way to collect your customer insights. You’ll be able to quickly analyze them and find the low-hanging fruit that will give you your small customer insight wins. I hope you’re excited. Because I know I am.
Churn No More: A Tactical Workshop for Customer Retention
A game-changing workshop designed to help you identify your next high-value retention win and earn a seat at the executive table. Consider it your FastPass to big retention wins.