Retention hacking jan 2014 slideshare

@johnnyforeigner
Retention Hacking
@johnnyforeigner
by
Ian Collingwood
The only metric that matters
All content copyright: Ian Collingwood 2013
Thursday, 26 March 15

@johnnyforeigner
Why

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2
3
4
5

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“..we’ve got a bit of a
problem with churn...”

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Retention/Loyalty
or
Churn/Attrition

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Hypothesis:
Retention is the
ultimate metric

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Growth hacking

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Growth hacking
is
Marketing

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Marketing is easy
Retention is hard

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Conversion is easy
Retention is hard

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Retention is a proxy for
happiness

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Retention:
“Am I delivering value over time?”

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Why it matters

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Churned customers are
unhappy customers
*Most of the time

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For every customer
complaint there are 26
other unhappy customers
who have remained silent
Source: Lee Resource

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Churn =
bad product/market ﬁt

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Churn = waste

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Fixing churn has huge ROI

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CAC vs. LTV

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a 5% increase in retention
can increase proﬁt by up
to 90%
Source: Bain & Co

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a 2% increase in retention
is equivalent to a 10%
reduction in costs
Source: Leading on the Edge of Chaos, Emmett Murphy & Mark Murphy

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Basket size for new
customers = $24.50
Basket size for repeat
customers = $52.50
Source: McKinsey

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Companies believe 48% of
churn is price-related
In fact it’s only 25%

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It costs 6-7 times more to
recruit a new customer
than retain an existing one

@johnnyforeigner
and yet...

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CMO priorities:
59% - Acquire new customers
42% - Launch new products
41% - Increase brand awareness
41% - Improve marketing ROI
Source: Forrester

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CMO priorities:
...etc
Source: Forrester

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CMO priorities:
...etc
.......etc...
Source: Forrester

@johnnyforeigner
CMO priorities:
...etc
.......etc...
.............etc...
Source: Forrester

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CMO priorities:
...etc
.......etc...
.............etc...
30% - Increase retention
Source: Forrester

@johnnyforeigner
Why don’t companies
focus on retention?

@johnnyforeigner
Optimising conversion is easy
Optimising retention is hard

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Silos
KPIs
Incentives

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Retention is a
systems thinking problem

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Holistic

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Retention is a
Service Design problem

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End-to-end

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Long term thinking

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Touches every part of the
organisation

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Retention Hacking 101

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Retention is a lagging metric

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...so seek proxies for
churn

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Net Promoter Score

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Retention is a noisy metric

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Segmentation matters

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Most businesses are giraffes
not camels

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Mean
Median
Mode

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Don’t believe everything
people tell you

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Dig into your data

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Build a churn model

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Cohorts, cohorts, cohorts

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Quantitative/qualitative
loops

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Listen, learn, predict,
check

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Prioritise features based
on improving your
retention proxies

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Channels matter

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Skills & tools of the
Retention Hacker

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Curiosity
Empathy
Listening
Observation
Patience

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Excel/Numbers
SQL
Cohort analysis
Machine Learning
Interviewing

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Long term thinking
Empowered employees
Shared goals
Trust

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Long term thinking
Empowered employees
Shared goals
Trust
Retention can’t be hacked

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Where to start looking for
clues

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Onboarding is key...

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...but think about the
whole journey

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Look to the stars

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Make it easy to complain

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Don’t believe everything
people tell you when they
leave

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Some traditional “retention”
tools and why they suck

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Lock-in sucks

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Lock-in
vs
Learning

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If you love someone...
let them go

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CRM sucks

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Stop telling me how
amazing you are

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Newsletters suck

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STFU

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Loyalty cards suck

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Can’t buy me love

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Some things that don’t
(always) suck

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Investing in “on-boarding”
hardly ever sucks

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Refer-a-friend sometimes
doesn’t suck

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Free trials sometimes don’t
suck

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Temporary upgrades
sometimes don’t suck

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Webinars very occasionally
don’t suck

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Tips and ﬁnal thoughts

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Customers are more loyal
than you think

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“Inertia revenue” is a
dangerous drug

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Upsell where possible
&
Downsell where necessary

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Learn SQL

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Tie your whole team’s bonus to
retention levels
(and nothing else)

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Happy employees create
happy customers

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Be in it for the long run.
Choose investors accordingly.

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Retention Hacking rule #1:
Retention can’t be hacked

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Be human

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Resources & reading

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Jacki Huba
Karl Stack
Bill Stewart
Paul W Farris
Neil T. Bendle
Phillip E. Pfeifer
David J. Reibstein
Totango blog
ForEntrepreneurs.com
Samuel Hulick - useronboard.com
RetentionHacking.com

@johnnyforeigner
Thanks:
Tom
Damien
Maria Jose
You

@johnnyforeigner
Thank you
ian@uxdna.co.uk
Ian Collingwood
@johnnyforeigner
www.retentionhacking.com

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