Jacobsen has also been skydiving once.
In this talk, Jacobsen will be confronting fallacies she's noticed in customer retention - namely, that making customers happy increases customer retention - and how to build a better customer success strategy.
Prevailing wisdom says that if you can make your customers happy, they'll be loyal. The Effortless Experience states that making customers happy with memorable experiences leads to higher retention.
However, in practice, you can make a customer delighted, they can say really nice things about you, and they can still churn 6 months later.
Conversely, really angry customers that complain all the time in your support can stick around forever.
Why do unhappy customers stay, and why do happy customers leave?
The answer lies in a parallel field to customer relationships. John Gottman studies married relationships and can predict with 90% accuracy if and when a couple will get divorced. His findings are rooted in the concept of "good enough" - if a person is unhappy in a marriage that's good enough, they're probably going to stay.
People don't need to be happy to stay in a relationship. If a person is getting their need met, they're likely to stay.
As in married relationships, customers are nearly as likely to stay even if they're unhappy as long as they're getting their need met.
You may love making customers happy. It can be an incredibly joyful experience. If you're bending over backwards to delight your customers, however, you're not being economical. Your time and attention would be better spent elsewhere on your business if your goal is to increase your customer retention.
Once you're consistently meeting the expectations of your customers, you're already doing the most economically viable thing you can do.
We'd like to think that if you build a great product, customers will love it. Here are three examples of great products that failed to help their customers be successful, and their strategies for achieving customer success.
Docker went through a massive growth in 2014. Public job postings for engineers with Docker experience between 2014 and 2015 increased 17x from 2,500 to 43,000.
This massive growth in demand meant that companies that wanted to use Docker couldn't. The product - Docker - was excellent, but companies couldn't get the support they needed to successfully use it.
In response, Docker developed a free training program in late 2014 so engineers could get certified and meet the new demand. Docker adoption went up 40% the following year.
Fender Guitars has been in a tough spot for the last decade. Ten years ago, they sold 1.5M guitars/year. Now, they're selling only 1M guitars/year - a 40% decrease. Additionally, the churn rate of guitar use within the first year is 90% (i.e.: there is a 90% probability that a guitar purchased today won't be in use one year from now).
In response, Fender developed Fender Play - a $10/month guitar education app focused on helping their customers successfully use their product. Note that Fender didn't change anything about their guitars, and didn't better advertise their guitar's features - Fender focused on helping their customers play the guitar.
When Drip was acquired by Leadpages, they went from targeting a very specific type of customer to needing to cater to all of Leadpages' 43,000 customers. In response, Drip introduced a free plan that could be more accessible to more people.
These new free customers had a preexisting concept of email marketing (carried over from other free tools like Mailchimp) which they tried to apply to Drip. Customers complained that Drip was too complicated and heavy to use in the way they were used to.
In response, Drip developed a training program focused on teaching businesses the principles of marketing. In this weekly webinar and accompanying feature-based training program, Drip gave customers a framework to become their own consultant for email automation.
In all three of these examples, the product (Docker, Fender Guitars, and Drip) was amazing, but customers needed more help to be successful. Each of these companies deployed training programs that met their customers at their need. These programs didn't teach customers about product features - they taught how to accomplish specific tasks.
TSIA ran a survey on SaaS customers and found that this type of product and strategy training increased the percentage of customers able to use the product more by 68%, use more features by 56%, and work more independently by 87%.
How do we judge when someone has adopted your product? Adoption certainly doesn't happen when a user first signs up. It's not clear that a user has adopted your product even if they've set up certain features. High user activity in your app isn't even necessarily a marker for adoption.
Just because someone uses your product does not mean they've been successful. They have to change their broken process too. You're the expert in the room, so take responsibility for your customer's success. Don't give up on them after they've paid you - share your expertise.
Taking responsibility for your customer's success is clearly a valuable goal, but what does that mean specifically? Jacobsen has four strategies to guide you.
What does a salesperson look like in your mind?
The stereotype of a salesperson is someone strongly financially driven to make as many and as large of sales as possible. On a call, this type of person would likely talk all about their product features and give you a compelling pitch for why you should choose them.
However, being patient, present, attentive, compassionate, and prepared is a better sales strategy. On a call, this type of person would likely ask a lot of questions, listen thoughtfully to your responses, and genuinely help you solve your problem.
Customers are bad at planning their own success. Someone who buys a Fender guitar isn't going to plan out a practice schedule and graph their improving skill on their own.
Help your customer succeed by asking them what they're trying to do in your first conversation. Record their goals in a CRM and track how well they're achieving those goals.
Tracking customer success doesn't need to be complicated (in fact, it's better to be simple and consistent). You could just check back in with them the next time you interact and make sure they're accomplishing what they set out to do.
Having a record of a) what your customer wanted to do, and b) helping them achieve it makes upselling much easier when it's time for them to renew.
Your product features are meaningless to a customer until they know how to use them to improve an existing process.
As an example, Drip has a feature called lead scoring that can find subscribers that are the best leads based on their level of engagement. This feature is super powerful but turned off by default because it needs to be set up specifically measuring what's important.
A great salesperson for Drip would spend most of a sales call listening to what their customer was trying to achieve, and only at the end would they have the information needed to successfully set up lead scoring.
The above three strategies work well but are very high touch. How could they consistently work at scale?
Success playbooks are templates of how to reliably execute customer success strategies. Here's what that looks like for Drip (from Jacobsen's 2016 Microconf talk):
If you've created a customer success plan and followed up to make sure your customer is continually succeeding (which puts you in more of the role of a consultant than a SaaS provider), you have more options for when it's time to renew.
Instead of just sending them an email letting them know they're going to get a bill, or (if you're getting fancy) injecting some dynamic data showing how much value they got out of your product, you can use renewal as a moment to upsell based on specifically what value your customer is getting out of your product.
Do you have tips on getting users interested in demos, booked into demos, and then converted into customers?
Look at how much stickiness you introduce in the trial phase.
To get people interested in demos, put the ability to book demos everywhere. Put a button to book a demo prominently on your site and include a link as a PS in your marketing emails.
You can't progress with us until you get educated. It's a requirement. "It's been great talking with you - the next thing we'll do is schedule a time to talk about strategy. You're busy? That's fine - let's schedule a time later." If education is a major factor in if someone will adopt your product, don't let it be optional for your customer.
For converting, try to make it more sticky. If you have to extend their trial or set up integrations, go in and do that.
If you're having trouble scheduling meetings with your prospects and customers, or would like to chat about customer success, book Anna at anna.youcanbook.me.
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