Don’t tell me you miss me: 3 better approaches to user retention
How often do you get an email from some company you once used with the immortal words “we miss you”? But that message feels insincere, because it paints a commercial relationship as a personal one. Here are 3 better approaches to user retention.
It happens every day. A company you bought something from months ago sends you an email with three immortal words: “we miss you”.
These messages feel icky because the sentiment is belated and insincere. Deep down we know that the business doesn’t really miss us. The business doesn’t know our sparkling personality or understand our unique contribution to the community – the business just misses our money.
A retention campaign that paints a commercial relationship as a personal one will always be awkward at best and at worst will create ill will. Here are three better ways to create retention campaigns that feel genuine and actually work:
- Focus on how your product helps
- Identify and solve the problems that caused churn
- Proactively monitor usage and value
1. Focus on how your product helps
The mistake at the heart of the “we miss you” message is that it represents the customer’s relationship to the business as personal, not commercial. Personal relationships are based on who we are, and we want them to persist through thick and thin. But commercial relationships are different.
A commercial relationship is based on an exchange of value: the business provides a product or service, and the customer pays for it. A great commercial relationship also brings in aspects of a personal relationship, and at Intercom we believe that better relationships are the secret to faster business growth. But this personal relationship doesn’t replace the foundational exchange of value.
“Telling a lapsed customer ‘we miss you’ isn’t just untruthful, it focuses on the wrong aspect of the relationship”
If a customer is no longer buying from you, it’s either because they no longer have the problem that they used to, or because they weren’t able to use your product to solve the problem that they wanted to. So telling a lapsed customer “we miss you” isn’t just untruthful, it focuses on the wrong aspect of the relationship. To entice that customer back, you need to rebuild the foundation of your commercial relationship, and you do that by rebuilding the perception that your business can solve their problem.
Everyone on your mailing list initially came to your business for some reason. Even if they’re “just looking”, some aspect of your company’s promise appealed. To re-engage customers effectively, you need to remind the customer of what it is that got them there in the first place. Instead of guilting them into returning simply because they bought from you once, remind them of the benefits that your business can provide. For your business to get what it wants (retention) you need to focus first on what your customers want.
2. Identify and solve the problems that caused churn
The average SaaS product loses between 2% and 20% of its users each month. Each of these customers left for a reason. To win them back, instead of trying to guilt your customers into retaining you need to help them overcome the problem that caused them to leave in the first place. The appropriate tone in this moment is contrition, not appeals to empathy.
Many experiences can cause churn: inability to find the right product, struggles to get set up, a poor service experience, or changing business needs. A retention campaign that specifically addresses the issue that caused churn and provides a simple next step stands a high chance of success, as it speaks to the root cause of the churn.
“To retain these customers, design a campaign to specifically address the cause of churn”
The first step is analyzing customer actions to identify common causes of churn. For example, often new customers will encounter problems in completing a specific step in onboarding, and churn as a result. To retain these customers, design a campaign to specifically address the cause of churn. In this case, you should provide a simple and specific next step that will clearly help them move towards their goal, or perhaps provide an FAQ to help troubleshoot common issues.
At Intercom, we realized that many of our new customers got stuck trying to get a list of their existing users into our product. After an effective campaign that showed new customers how to add users, we identified a product gap and built a bulk user importer. This importer remains the most impactful onboarding feature we’ve released.
These types of personalized features or campaigns require more work to set up, but deliver superior results time and again.
3. Proactively monitor and manage value
By the time that a user has cancelled a subscription or stopped using your product, it’s always going to be an uphill battle to get them back. The ideal churn save campaign intervenes before your customer even makes the decision to churn.
Customers generally stop using (or cease to repurchase) products when they don’t get enough value out of your product to justify the price, not out of forgetfulness or disloyalty. To identify customers who might not be getting enough value (and so are candidates to churn), look for the ones who aren’t using functionality that they’re paying for.
“You’ll need a scorecard of different measurements to evaluate the extent to which a customer is getting the value that they came to your business to get”
The trick to doing this well is measuring behavior that corresponds to a customer getting value. For consumer products, value will be tied to usage. But ensure you set a threshold that avoid counting logins or app opens alone, because briefly opening your product seldom provides value. TV streaming service Netflix only define someone as active and getting value if they’ve watched 15 minutes of content in a month, the length of the shortest TV episode. This metric avoids false counting of the user who was surfing around Netflix for five minutes trying but unable to find a show.
For B2B products, customers often pay wildly different prices, and so the value that they expect out of your product is wildly different. As a result, one metric alone is usually not enough. You’ll need a scorecard of different measurements to evaluate the extent to which a customer is getting the value that they came to your business to get.
When we measure the health of our customers at Intercom, we consider three key types of usage:
- How broadly a customer is using our product, with a focus on usage of key features that differentiate us from other products in the market.
- How deeply a customer is using our product, based on how many people are actively using Intercom at the company.
- How many of their customers our customer is talking to through Intercom, which is another key measure of value for us.
Our customer health metrics scale these figures based on what a customer is paying to create a proxy for value: how much a customer is getting back for each dollar that they pay us. While we know not all customers will use every feature available to them, we value improvements across any of these three dimensions.
Understanding why each customer is buying your product and then measuring whether they’re taking the actions that would enable them to achieve that result enable you to deliver specific and personalized interventions. If your company has an account management team, this scorecard can form the basis for high-impact business reviews with customers.
Relationships fuel your growth
One of the secrets of faster growth is better relationships. To build a great commercial relationship, provide timely and personalized communication that makes specific and useful recommendations to better do the job that they’ve hired your product to do.
Talk to customers about the value that they can get, guide them to overcome the specifics of what stand in the way of them using your product, and most of all, strengthen your relationship before your customers even consider missing you.