This is the eighth post in the series 12 Days of Ideas: Building & Marketing Web Products.
Illustrated by Krista Seidl
It’s so easy to get focused on conversion rates, but gaining customers is pointless if you’re losing those same customers three months later.
Earlier this year I ran across a killer post about retention by Jerry Jao that caused me to spend a little less time obsessing about our conversion rate, and more time watching our retention rate.
Here are my key takeaways:
Existing customers are repeat customers.
Existing customers already like your product, and ideally they like your company as well. What do you have in the pipeline to sell to them? Re-acquire these customers with new products, features or services.
You’re no longer courting customers, you’re maintaining a relationship.
Existing customers have bought into your premise; they’ve purchased your product, or hired your services. Hopefully they have a positive feeling about you. You’re living up to the promise you made to win them over, so now it’s time to do the things that make your relationship with them special.
“When you see our strange billboards that don’t even say our name, or when you see our random “high five” shirts, vinyl toys, or hear ridiculous radio ads, just know that they defy logic because they’re for our existing customers. We’re not going for new leads, let alone conversions…. We’re going for customer service. Which, by the way, leads to leads.”
— Ben Chestnut, Why I Hate Funnels
Happy customers tell people about your product. Of course, so do unhappy customers. So it’s a good use of your time to keep your active customers in the former camp. From the CMO post:
“A study showed that satisfied customers tell nine other people about their positive experience, while dissatisfied customers are likely to talk about their negative experience with 22 other people.”
— Jerry Jao, Customer Retention Should Outweigh Customer Acquisition
Clearly retention is a major indicator of long-term success, and we should spend more time looking at the people on our accounts list instead of looking wistfully at those who aren’t. It turns out that one leads to the other.