Are you a Keeper?

Customer Retention
When dealing with membership based offerings- subscription based services in the form of a gym or a mobile phone, or products in the form of term limited licensed software certain level of attrition is normal.

What the normal attrition (membership drop off) rate is- depends on the industry. What’s average for mobile phone service will not be average for a magazine subscription. This normal attrition is nothing to sweat. Consumer needs and tastes change and while your portfolio may contain a robust long view, how current day products and services match to current demand will fluctuate.

If due diligence reveals that your attrition rate is higher than average you need to improve your account management efforts. It’s always easier and more cost effective to retain a current client and make them happy than to win a new customer. Keeping the churn low is a way to minimize costs to your business unit. There is no standard ratio, but it’s generally accepted that retention (keeping a client or renewing their commitment) is far less expensive than acquisition (finding a new one).

So- how do you maximize your retention?

Honeymoon’s over!
Picking up the phone about 3-6 months after an install and just making sure they’re happy with you is easy and potentially lifesaving. Instead of waiting until the contract is coming up for renewal, touch base when the honeymoon period has worn off, and make sure you’re meeting their needs and are using your product. Remember to keep it in the client's interest- not your own. Your interest will come later (when they extend or renew). Right now- it's just about them.

Constant relationship care and feeding is essential to understanding and keeping ahead of those changes needs and demands.

By being proactive about meeting their solution needs, and how you handle it can instill a trust. A trust in the company, and a trust in the offering- that would be close to undillutable.

Upgrades
In the case of custom software, making small upgrades to the install will keep you top of mind with them. If it’s gratis, they will likely be thankful (if the upgrade or change has an impact on the function or benefits to them). Best approach to ask if they want the gratis upgrade; describe how it will affect them.

Upgrades on a gratis basis are intended to improve existing functionality or to overcome shortcomings. Upgrades which provide new functionality are a sales opportunity. Focus on continuous improvement as an enhancement to your product or service. Focus on value add in order to enhance sales.

Up sell
It’s easier to start with a barebones core solution, then approach the value add latter. Spreading out the development, or adding on the extras in a piecemeal fashion mitigates the risk in the customer’s mind that that they are making a mistake.

It’s easy to be more casual about the process behind up sells. Take the same approach as you would with a new sale. Do your needs analysis, prepare an Invoice or CO (Change Order)) and commit the changes to the next version of the master spec sheet.

Gracious Loser
Some companies have hoops they require their customers to go through to cancel services. The thought is make it harder to leave- people will stay! I remember a gym that required 2 months notice to cancel service, and you had to survive a pretty aggressive grilling by a Customer Service Representative.

You’re not doing your customer service any favors by making it harder for your clients to leave. The client will be annoyed, and in the chance they find themselves shopping in your market space again- your company will not meet the short list.

In Conclusion, proper account management goes beyond sending out a yearly Corporate Christmas card. If you can master taking care of your clients, you will not only reduce costs, but you’ll find that your referrals and up sells will increase as well, which is easy revenue.

Thanks to John Murray who told me he's listening to Muddy Waters.