While acquisition gets all the hype in business, retention is what makes or breaks a brand, especially when it comes to subscription-based services. Case in point: Harvard Business Review notes that it costs up to 25 times more to find a new customer than to retain one. In other words, the value of retention deserves a second look.
\r\nYour work is just beginning when a customer says “yes” to your product or service. And with 40 percent of revenue dependent upon repeat orders or subscriptions, you need to quickly and gracefully move beyond the excitement of the sale and into the long-term commitment phase of your customer relationship to keep your company afloat.
\r\nApproximately one second after you’ve hooked a customer, you should switch your mindset from sales to retention. Every word counts at this point, hopefully contributing to your customers' overall sense of satisfaction. When customers' expectations are not met or exceeded from the get-go, they’ll have no reason to renew their subscription or place another order.
\r\nIf you haven’t created a protocol for the renewal process or if you're in need of some major updates, use the following tips to guide your company toward a model that’s efficient and effective:
\r\nSure, you want renewals; that’s obvious. However, you can’t afford to push renewals on brand-new customers. Early shoves toward renewing a subscription can sour audience members. Furthermore, if you request for renewals too late or without proper notice, you could waste just as much valuable time.
\r\nAvoid possible conflicts by evaluating your current method of drip renewal notices to subscribers or buyers. Test to see where the critical retention turning points are, and then create content that encourages action without annoying purchasers. Additionally, try beta tests on select accounts to see which methods produce optimal returns.
\r\nRetention isn’t direct sales, so don’t treat it that way. Far too many renewal content pieces include a laundry list of features and benefits. This is a huge turnoff to customers because they can feel frustrated that they either didn’t know about the perks beforehand or haven’t taken advantage of them. Ideally, your sales speak should take place before the customer signs up, not afterward.
\r\nTo resolve this problem, act like a utility company. Think about it: Electricity and water bills don't plug advantages; they simply assume consumers are going to pay. This way, there are rarely any questions about the value of the company-consumer relationship. Instead, the business is taken care of and the two parties move forward together.
\r\nMaking the renewal bar high and difficult comes with no advantages. Instead, create an easy approach for consumers to stay with your brand rather than fall away.
\r\nWant your customers to renew online? Focus on ease and security by using a single sign-on functionality or direct-to-the-payment personalized URLs. If you make consumers hunt for their login credentials and wander through your website to find the payment page, you've lost them.
\r\nPut yourself in your customers' shoes and think about how you'd feel about the renewal process and next steps. In doing so, target your attention on how your customers prefer to pay, and then simplify this process where possible.
\r\nThe holy grail is an auto-renew on a preferred credit card, of course. However, that comes with its own challenges of maintaining an active card on file and a solid chase stream if the card fails to post. Or if customers are auto-renew-averse, give them an attractive alternative to renew for multiple terms. By doing so, you avoid the attrition windows, and consumers reap the benefits.
\r\nRetention marketing should not be limited to the employees who send out renewal instructions. Everyone who touches part of the renewal process plays an integral role in setting and keeping the right cadence in customer retention.
\r\nStart this delegation with your customer-facing team. Do their actions convey that they believe in your product and that they are empowered to satisfy the customer? Additionally, evaluate the personality and engagement of your customer communication messages. Ask yourself (and answer honestly): Are we customer-driven? Or do we make our decisions based on \"the system\"?
\r\nCheck in on your team by secret-shopping your own call center, and take note of individuals who carry through in successful customer renewal efforts. Celebrate a happy customer, and reward the staff members who consistently blend the needs of the customer with the health of the company.
\r\nFirst-time renewers, often referred to as \"converters,\" behave differently than those who have renewed multiple times. Consequently, you should break down your renewal prospects by converter versus renewer or similar cohorts within your particular audiences. This makes it simpler to take action if a subset is underperforming.
\r\nKeep in mind that not all customers are equally likely to renew, nor will all of them renew for the same reasons. The buyer wooed by a promotional offer or free trial may be less apt to renew than the loyal purchaser who has been around for months or years. Determine customers' key motivators using Net Promoter Score surveys and other data sources. Then, leverage the results to get ahead of the “renewal cliff” for each group.
\r\nRemember, customers engage because they want to, not because they have to. Use the power of persuasion to reinforce customers' decisions and keep them active, satisfied members of your brand community. Although it might not have the same sizzle as acquisition, retention certainly will have far-reaching payoffs in the future.
\n","docType":"article","guid":"articles_07d8488e1ab769e374f9980664e1cd2b","lastModified":"2018-04-30T16:18:00.000Z","published":"2018-04-30T16:18:00.000Z","structuredData":null,"subtitle":"Use the power of persuasion to reinforce customers' decisions and keep them satisfied.","template":"legacy","title":"Renewals Dropping Off? Rethink Your Retention Strategy with These Tips","type":"article","author":{"avatar":null,"bio":"Gayle Teskey is the CEO and founder of Membership Corporation of America, a consultative and marketing services organization with a specialization in enthusiast membership organizations and affinity marketing. Since 1993, Teskey’s hands-on approach to leadership has driven MCA to refine the best practices in consumer marketing, membership acquisition and retention, marketing technology, and creative development to meet the needs of today's membership communities.","name":"Gayle Taskey","image":null,"slug":null,"social":{"facebook":"","linkedin":"https://www.linkedin.com/in/gayle-teskey-756b581/","twitter":"https://twitter.com/membershipcorp","website":"https://www.membershipcorp.com/"},"status":"enabled","title":null,"type":"New BDC Member","user":{"imagePath":"https://staging.business.com/images/uploads/user/profile/46be7d5598c836b43714ee76eb7c85d383e7f.jpg","profile":{"company":"Membership Corporation of America","jobTitle":"CEO & founder","website":"https://www.membershipcorp.com/"}}},"breadcrumbs":null,"channels":{"primary":{"name":"Marketing","slug":"marketing"},"sub":{"name":"Customers","slug":"customers"}},"meta":{"robots":"index, follow","description":"Retention efforts have far-reaching future payoffs. Use the power of persuasion to reinforce customers' decisions and keep them active and satisfied.","title":"How to Improve Your Customer Retention Strategy - business.com"},"parsedContent":{"toc":[{"id":"maximize-retention-by-rethinking-your-renewal-process","title":"Maximize Retention by Rethinking Your Renewal Process"}],"json":[{"component":"p","children":["While acquisition gets all the hype in business, retention is what makes or breaks a brand, especially when it comes to subscription-based services. Case in point: Harvard Business Review notes that it costs up to ",{"component":"a","props":{"href":"https://hbr.org/2014/10/the-value-of-keeping-the-right-customers","target":"_blank","rel":"nofollow"},"children":["25 times more"]}," to find a new customer than to retain one. In other words, the value of retention deserves a second look."]},{"component":"p","children":["Your work is just beginning when a customer says “yes” to your product or service. And with ",{"component":"a","props":{"href":"http://success.adobe.com/assets/en/downloads/whitepaper/13926.digital_index_loyal_shoppers_report.pdf","target":"_blank","rel":"nofollow"},"children":["40 percent of revenue"]}," dependent upon repeat orders or subscriptions, you need to quickly and gracefully move beyond the excitement of the sale and into the long-term commitment phase of your customer relationship to keep your company afloat."]},{"component":"h2","props":{"id":"maximize-retention-by-rethinking-your-renewal-process"},"children":[{"component":"strong","children":["Maximize Retention by Rethinking Your Renewal Process"]}]},{"component":"p","children":["Approximately one second after you’ve hooked a customer, you should switch your mindset from sales to retention. Every word counts at this point, hopefully contributing to your customers' overall sense of satisfaction. When customers' expectations are not met or exceeded from the get-go, they’ll have no reason to renew their subscription or place another order."]},{"component":"p","children":["If you haven’t created a protocol for the renewal process or if you're in need of some major updates, use the following tips to guide your company toward a model that’s efficient and effective:"]},{"component":"h3","children":[{"component":"strong","children":["1. Plug renewals at the right time. "]}]},{"component":"p","children":["Sure, you want renewals; that’s obvious. However, you can’t afford to push renewals on brand-new customers. Early shoves toward renewing a subscription can sour audience members. Furthermore, if you request for renewals too late or without proper notice, you could waste just as much valuable time."]},{"component":"p","children":["Avoid possible conflicts by evaluating your current method of drip renewal notices to subscribers or buyers. Test to see where the critical retention turning points are, and then create content that encourages action without annoying purchasers. Additionally, try beta tests on select accounts to see which methods produce optimal returns."]},{"component":"h3","children":[{"component":"strong","children":["2. Avoid a salesperson's tactics. "]}]},{"component":"p","children":["Retention isn’t direct sales, so don’t treat it that way. Far too many renewal content pieces include a laundry list of features and benefits. This is a huge turnoff to customers because they can feel frustrated that they either didn’t know about the perks beforehand or haven’t taken advantage of them. Ideally, your sales speak should take place ",{"component":"em","children":["before"]}," the customer signs up, not afterward."]},{"component":"p","children":["To resolve this problem, act like a utility company. Think about it: Electricity and water bills don't plug advantages; they simply assume consumers are going to pay. This way, there are rarely any questions about the value of the company-consumer relationship. Instead, the business is taken care of and the two parties move forward together."]},{"component":"h3","children":[{"component":"strong","children":["3. Lower the renewal hurdle. "]}]},{"component":"p","children":["Making the renewal bar high and difficult comes with no advantages. Instead, create an easy approach for consumers to stay with your brand rather than fall away."]},{"component":"p","children":["Want your customers to renew online? Focus on ease and security by using a single sign-on functionality or direct-to-the-payment personalized URLs. If you make consumers hunt for their login credentials and wander through your website to find the payment page, you've lost them."]},{"component":"p","children":["Put yourself in your customers' shoes and think about how you'd feel about the renewal process and next steps. In doing so, target your attention on how your customers prefer to pay, and then simplify this process where possible."]},{"component":"p","children":["The holy grail is an auto-renew on a preferred credit card, of course. However, that comes with its own challenges of maintaining an active card on file and a solid chase stream if the card fails to post. Or if customers are auto-renew-averse, give them an attractive alternative to renew for multiple terms. By doing so, you avoid the attrition windows, and consumers reap the benefits."]},{"component":"h3","children":[{"component":"strong","children":["4. Turn renewals into a team effort. "]}]},{"component":"p","children":["Retention marketing should not be limited to the employees who send out renewal instructions. Everyone who touches part of the renewal process plays an integral role in setting and keeping the right cadence in customer retention."]},{"component":"p","children":["Start this delegation with your customer-facing team. Do their actions convey that they believe in your product and that they are empowered to satisfy the customer? Additionally, evaluate the personality and engagement of your customer communication messages. Ask yourself (and answer honestly): Are we customer-driven? Or do we make our decisions based on \"the system\"?"]},{"component":"p","children":["Check in on your team by secret-shopping your own call center, and take note of individuals who carry through in successful customer renewal efforts. Celebrate a happy customer, and reward the staff members who consistently blend the needs of the customer with the health of the company. "]},{"component":"h3","children":[{"component":"strong","children":["5. Develop early warning indicators. "]}]},{"component":"p","children":["First-time renewers, often referred to as \"converters,\" behave differently than those who have renewed multiple times. Consequently, you should break down your renewal prospects by converter versus renewer or similar cohorts within your particular audiences. This makes it simpler to take action if a subset is underperforming."]},{"component":"p","children":["Keep in mind that not all customers are equally likely to renew, nor will all of them renew for the same reasons. The buyer wooed by a promotional offer or free trial may be less apt to renew than the loyal purchaser who has been around for months or years. Determine customers' key motivators using Net Promoter Score surveys and other data sources. Then, leverage the results to get ahead of the “renewal cliff” for each group."]},{"component":"p","children":["Remember, customers engage because they ",{"component":"em","children":["want"]}," to, not because they ",{"component":"em","children":["have"]}," to. Use the power of persuasion to reinforce customers' decisions and keep them active, satisfied members of your brand community. Although it might not have the same sizzle as acquisition, retention certainly will have far-reaching payoffs in the future."]}]},"resource":null,"sponsorship":null,"thumbnail":{"path":"https://staging.business.com/images/content/5ae/863d092a3a4fa7e8b45a0/1500-0-","caption":"Jirsak/Shutterstock","isBlurred":true},"bestPicks":null},"related":{"relatedArticles":[{"title":"Using Lean Strategies to Achieve Team Synergy and Efficiency","canonical":"https://www.business.com/articles/lean-strategies-team-efficiency/","slug":"lean-strategies-team-efficiency","thumbnail":"https://www.business.com/images/content/5be/480e49c658a51108b458c/1500-0-","dek":"Learn more about lean manufacturing strategies and how to implement them in your business.","lastModified":"2018-11-08T08:00:00Z","published":"2018-11-08T08:00:00Z","sponsored":false},{"title":"Your Guide to Creating a Small Business Marketing Plan","canonical":"https://www.business.com/articles/sample-marketing-plan-outline-and-template/","slug":"sample-marketing-plan-outline-and-template","thumbnail":"https://www.business.com/images/content/5f3/3e1765a215eb62d8b4567/1500-0-","dek":"Follow these templates and guidelines to get started on creating your business's marketing plan.","lastModified":"2020-08-12T12:28:00Z","published":"2018-03-02T13:00:00Z","sponsored":false},{"title":"PowerShell: Everything You Need to Know","canonical":"https://www.business.com/articles/powershell-everything-you-need-to-know/","slug":"powershell-everything-you-need-to-know","thumbnail":"https://www.business.com/images/content/5b8/998581039eb8f738b457b/1500-0-","dek":"What you need to know to unlock Microsoft PowerShell's full capabilities.","lastModified":"2018-09-05T17:00:00Z","published":"2018-09-05T17:00:00Z","sponsored":false},{"title":"The Ultimate Small Business Guide to Credit Card Processing Fees","canonical":"https://www.business.com/articles/credit-card-processing-fees/","slug":"credit-card-processing-fees","thumbnail":"https://www.business.com/images/content/5d2/346547b437454698b4577/1500-0-","dek":"Learn about credit card processing fees and how to negotiate for lower costs.","lastModified":"2020-06-16T10:08:00Z","published":"2017-12-07T08:00:00Z","sponsored":false},{"title":"How to Hire for Your Business","canonical":"https://www.business.com/articles/how-to-staff-business/","slug":"how-to-staff-business","thumbnail":"https://www.business.com/images/content/5ea/9c8bb9c658aee018b456c/1500-0-","dek":"Sterling Staffing Solutions CEO Stephen Carter shares his tips on staffing your business.","lastModified":"2020-07-31T15:00:00Z","published":"2018-08-16T12:00:00Z","sponsored":false},{"title":"From COVID-19 to Hurricane Season: Disaster Preparedness for Small Business","canonical":"https://www.business.com/articles/business-disaster-prep/","slug":"business-disaster-prep","thumbnail":"https://www.business.com/images/content/5e7/a495e5a215eb11d8b4569/1500-0-","dek":"Natural disasters – whether a hurricane, tornado or outbreak like COVID-19 – can have a disastrous effect on small businesses, but they don't have to. 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