As part of our “Best of Subscription Show” members-only series, we’ll look back at some of our most popular speakers and sessions and share key takeaways that show why this information remains relevant and how you can use it to grow your subscription business or inform your decision-making. In this article, John Cozad, SVP of Operations at Gravy Solutions, and Ben Madden, Partner at Isochronous Media, share four simple steps subscription businesses can take to retain customers effectively.
Isn’t it funny that we often know what’s good for us, yet we don’t actually follow through? This applies to many situations, businesses included. What if subscription business owners could retain customers and see an explosion in their growth by following four simple steps? If it sounds too good to be true, it’s not.
“Nothing [I’m about to share] is going to be mind blowing. But it’s one of those things where its the 80/20 rule; 80% of the people never do these things even though they know they should,” says John Cozad, SVP of Operations at Gravy Solutions.
According to Cozad and Ben Madden, Partner at Isochronous Media, there are four straightforward steps that subscription businesses can follow to retain customers.
Stimulating growth and retaining customers doesn’t have to be complicated. In fact, John Cozad, SVP of Operations at Gravy Solutions, offers up four simple steps to help subscription businesses achieve these goals.
Make it easy
Check your own business to understand if it’s easy to be a customer. If it’s hard, dig in. Find out from customers (or hire outside help) to understand what is hard about being a customer and learn from that feedback.
Keep it simple
People do not like complexity. If any of your processes or services are complex, eliminate them. Talk to customers about where they draw value from your business and talk to people who churned to understand where they weren’t getting value from your business. You can grow exponentially when you get rid of the noise.
Make sure there is an element of your business that is focused on customer success. Is the customer service team acting quickly when a customer reaches out with an issue or question?
Develop a relationship with your customers. Be human, be reachable, be approachable. It will have a massive (positive) effect on your brand and your retention.
All these items are simple. But 80% of companies don’t do them. Be part of the 20% that follows through. Doing so will drive value in the company and maximize the customer’s lifetime value.
Make it easy
“In our businesses, we need to make sure we’re making things easy for our customers. A lot of times it can be hard to go through a process — either using the product or getting implemented,” says Cozad.
Grocery stores serve as a great example of “not easy.” Is it easy to navigate a grocery store? Not necessarily. Each store is unique, placing a variety of products in different locations. Of course, there are reasons why a grocery store layout is not easy to navigate; it behooves the grocery store to keep customers in their aisles, so they’ll buy more.
However, this is a hard experience for customers.
Cozad urges business owners to think about how customers perceive working with them. What processes are easy to navigate and follow through on? Which ones are difficult? Since business owners are “in” their business every day, most of the processes are obvious or clear to them. But failing to step into the client’s shoes is a major oversight.
“We want to make things obvious for the oblivious,” says Cozad.
But what are some steps business owners can take to better understand what is easy and what is hard for their customers?
Secret shop your company
Asking friends, family members, or even hiring a “secret shopper” to move through the customer lifecycle is a great way to get feedback. From using the website to the sign-up process to the sales process to actually using the product or service, these “shoppers” will point out areas that need improvement. Listening to what they have to say and making changes based on the pain points will guide business owners into creating an easeful customer experience.
Listen to sales calls
The sales process is one of the most important for every business. But are the salespeople overcomplicating the discussion or making it hard for the prospect to get involved? Clear, effective communication is one of the simplest ways to make it easier for the prospect to become a customer.
This is the number one area where a business makes the biggest impact on its bottom line. When someone signs up, the process that brings them into the company as a customer will determine their experience for the rest of their relationship with the company. When a customer experiences friction during the onboarding phase, it usually negatively impacts their perspective of how the company operates from that moment on.
Use the product
Don’t create something, put it out there and trust that it’s good, states Cozad. Business owners must test their own products and services to get a better understanding of 1) what they’re actually offering their customers and 2) how to make it even better. Business owners must understand the perspective of the customer to better serve them. Using the offering is a simple way to do just that.
Additionally, there are many digital tools available that can support businesses in overcoming customer pain points. Services that track customer webpage actions and movements can be a treasure trove of information for business owners.
“Hard products, hard services…people don’t want to deal with hard. They want to deal with easy,” says Cozad.
Keep it simple
People don’t like complex offerings. And complexity can show up in a variety of ways: too many features, too many options, too many steps, and too many buttons to click are just a few examples. Complexity often translates to confusion. And when people feel confused, they often feel like the situation is hard.
“I love websites where there are three things on it. It’s dummy-proof,” says Cozad.
There are two strategies to simplify that Cozad recommends from the book Simplify: How the Best Businesses in the World Succeed by Richard Koch and Greg Lockwood: simplify pricing and simplify the product.
Companies that figure out how to minimize their costs so they can reduce and simplify the pricing of their offerings see great success. Simplifying operations and cost structure can open the business up to a much larger market.
“If you can price down with quality, it opens up your market and keeps your customers happy and coming back because it’s simple for them. It’s an easy value proposition. They know what they’re getting, and they know what the pricing is,” says Cozad.
On the product side, it’s all about taking sophisticated products and making them easy to use. Though the technology or the process to create such an offering may be complex, it’s the company’s job to figure out how to minimize the external appearance of those complexities.
“The majority of the value that your clients get out of your service or product is usually the minority of the features,” says Cozad.
There are two additional ways that Cozad recommends for finding ways to simplify the business.
Business dashboards seem helpful, and they are when it comes to offering statistics and summaries of website traffic and actions taken on pages. But the information dashboards fail to provide is why a customer fails to stay on the website, for example. One of the best ways to get more insight into customers’ behavior is to call them — especially when they leave. Asking customers for feedback in such a direct way can help businesses better understand where customers are getting value in the business. From there, businesses can focus on where the customers perceive value and start to simplify the rest of their offerings or features.
Ask them why they bought in the first place
Though it may feel painful at times, it’s crucial to learn from the people that are leaving. Why they unsubscribed is likely at the forefront of any business owner’s mind. But it’s important to ask them: Why did they sign up in the first place? That will help point to why other people are staying and what needs to be done to retain other customers. Through these conversations, business owners may learn that they’re placing focus in an area of the business where people aren’t hoping to gain value. This is a key learning for all businesses that can radically change their retention.
“What is the value that people get most? It’s usually a smaller element that’s drawing people in. And there’s usually a lot of noise around it that can complicate your business and complicate your sales. Understand where is that maximum value that is probably in the minimum portion of your business,” says Cozad.
“Any time a customer has any sort of question or issue, you need to be fast on it,” says Cozad.
People want help fast. They don’t want to sit on hold or click their mouse endlessly to have their problem solved. When customers aren’t helped quickly, two issues arise: first, the reason for which the customer reached out in the first place is still unresolved; second, the customer is now unhappy because they can’t get the support they want.
“You have to solve the customer’s problem before the customer becomes a problem themselves,” says Cozad.
Customers simply want to be heard and understood. Most of the time, they’re seeking help with an issue they’re experiencing. When businesses fail to respond to their customers’ needs quickly, friction arises within the relationship. To eliminate this friction, companies need to consider what methods customers can use to get ahold of them. Chatbots, email, phone calls, texting, social media direct messages, tweets — there are so many ways businesses can make themselves accessible to their customers.
“The longer you delay, the louder those customers get. And if your customer is unhappy, they’ll tell 700 people how unhappy they are with your business,” says Cozan.
With that in mind, there are a couple of strategies business owners can implement to quicken their customer service response time.
Create time-based metrics
Consider who loses money if a customer isn’t responded to promptly. This is an important question to ask within the organization. Ultimately, it’s not the customer who is going to lose out. It’s the company that will not only lose a customer, but the revenue that customer provides. This is why time-based metrics for customer service responses are so important. Shorter response times are massive value drivers. Happy customers usually don’t tend to churn (though involuntary churn does happen).
Inspect your current processes
Anything from updating a profile photo to resetting an account password to entering billing information during checkout needs to be assessed. Are any of these processes difficult? If it’s a frustrating process, is there someone within the company getting to customers quickly to help them with the issues they’re facing?
“When customers don’t get answers fast, your brand diminishes, your churn increases, and you don’t keep them around,” says Cozad.
Business owners should try to solve problems before they become a problem. In order to do this, companies must have processes in place to make it easy for team members to solve problems. On top of that, team members must be empowered to make decisions and come to a resolution for their customers. When team members are empowered in this way, it reduces the amount of time it takes to respond to the problem and come to a resolution.
“In the world of automation and machines, personalization gets diminished,” says Cozad.
Though the pandemic did much to support the expansion of automated systems and processes, it also drove people to crave human interaction. In some areas, automation and machines took over and handled what used to be done by humans. Inversely, people became tired of the lack of human interaction and sought personalized experiences that (as of now) only occur when interacting with another human.
Customers want to be seen and known; they don’t want to be another number in a system. Most business owners can remember a time when an organization for which they were a customer made them feel acknowledged and valued. It’s a pretty good feeling, one every business owner should seek to provide their own customers with.
Unfortunately, in the customer lifecycle, most businesses are the most personal with their customers during the sales cycle or when they’re leaving. Though this sort of works, it’s not the best way to retain customers and maximize their lifetime value.
Cozad recommends the following strategy for creating a more personalized experience for customers.
Stalk your customers
This doesn’t mean sitting in the bushes or staring through their windows. But gathering information about customers through their social profiles — think Facebook, Instagram, LinkedIn, Twitter, TikTok, Reddit — can help company owners develop a deeper relationship with them. Celebrating birthdays, anniversaries and milestones is just one way to keep in touch with customers that makes them feel special.
Gift cards, care packages, flowers and the like are all great options. And though sending a gift to every customer may not be practical (or economical), Cozad urges companies to do for one what they wish they could do for everyone.
“Because that one will tell other people about it. They will be loyal,” says Cozad.
Stories like this can also help with branding and testimonial building — two more ways to create greater trust in the brand.
Hand-writing thank you notes to customers is a simple, but very effective way to make customers feel seen. And, with social media, it’s easier than ever for businesses to give a shoutout to their customer, which often can be very meaningful. Personalizing the experience in every part of the customer lifecycle will help ensure that their relationship with the business is a long and fruitful one.
“People love to spend money with the brands that make them feel like they matter,” says Cozad.
It’s true that none of this insight was necessarily earth-shattering. (But if it was, go forth and implement!) However, these four steps are ones that, when prioritized and done right, can create an explosion of growth and retention for subscription businesses. Though all of these are simple, it doesn’t mean they are not hard. It will take effort and time. But the payoff will be well worth it.