The era of the subscription economy was already in full swing before the events of the last 12 months put it into overdrive. Increased buyer preferences for as-a-service models (in B2C and B2B alike) and the enabling effect of widespread digital transformation have led it to become firmly entrenched.
The logical consequence is that it’s now more important than ever for businesses to keep customer retention in mind. We figured, what better time to review ‘Retention Point: The Single Biggest Secret to Membership and Subscription Growth’ by Robert Skrob?
Skrob’s key point is that membership and subscription-based businesses, who traditionally focus efforts on new customers, need to make customer retention their top priority. His provocative book sets out to prove that membership growth comes from retention, not from getting new members.
What is a Retention Point exactly?
With many years of consultancy experience in large companies ranging from publishing, SaaS, coaching and subscription businesses, Skrob is well qualified to showcase proven strategies to improve customer retention.
He explains that each company has a Retention Point – the stage that customers need to reach in their journey that means they are likely to “belong for life”. Get more of them the Retention Point as fast as possible and you have yourself a very successful enterprise.
Relationship building is a key aspect of getting customers to the Retention Point. And as the Retention Point varies from business to business, a variety of tips, examples and stories are examined in his book.
Retention Point by Robert Skrob: Top 5 Takeaways
“Handling each new member correctly can increase their lifetime value 3-10 times.”
Skrob invites businesses to examine why retention is important for growth and ask themselves, “what happens AFTER your new member joins?”
We like the idea of classing customers, clients, subscribers, users, etc. as “members”. Ensuring your members are successful in using what you offer, once they’ve signed up to use it, is highly important. After all, if they aren’t, they will eventually leave.
A combination of increased customer success and volume of customers equals more referrals and word-of-mouth marketing.
In discussing how you can get your users to want to “belong for life”, Skrob encourages readers to ask themselves many questions about what their business offers, whilst encouraging them to reassess what they do at each stage of the customer journey. This in turn will help their members use what they offer successfully, to achieve their goals.
“Inspire members first… by showing them what’s possible.”
Skrob emphasizes the importance of leading by example and being inspirational to customers. Question why you do what you do. If you give advice and make recommendations, explain why and what the benefit of this is? What is the positive impact?
When giving possible use case examples, focus on showing what is possible, using short videos or snippets of your tools in action. Create mock-ups, helping your customers envisage your services and tools in order to inspire them. This will also expand understanding and ability, so customers are confident to implement any recommendations.
“When you deliver too much value, a member can become overwhelmed – this does nothing for retention.”
Providing a positive customer experience is about understanding each member’s needs and goals and using a solid yet flexible framework to support them.
When assisting members to use your product, they will of course ask questions and seek advice, recommendations and best practices. In responding be sure to depict and select specific resources, information and product features that are relevant to their use case. Take the time to understand their end goals and what they want to achieve so that you can share the most relevant and useful information.
Use a clear, welcoming tone, avoid ‘tech’ jargon, ask questions to ensure you understand requirements and help pre-empt what else they may need advice on.
This will ensure they aren’t overwhelmed with too much information, and that the clear pathway to improvement you provide will inspire members and help build your relationships and their trust in you.
“Stop writing about you and what you deliver.”
Skrob argues that everything should always be about the customer/member. That means applying their perspective and advocating their position.
Instead of articulating so much about your business and what you deliver, write about your member and how her life will improve when she uses what you deliver.
This links back to tips around inspiring customers, teaching them to use your product successfully, with advice especially curated to meet their desired outcomes.
“Members stay when they share your belief and mission.”
Another of Skrob’s thought-provoking insights in the concept that a customer/member is motivated to ‘join’ and then to ‘stay’ by different drivers.
In the first instance, he says, members join when “they are attracted to the transformations opportunity”. In other words, a compelling offer that promises to fulfil their requirements.
However, he continues, they stay “when they share your belief and your mission”.
Accordingly, a very important point to consider is how your organization’s mission and beliefs are portrayed in what you offer and how you support your customers. This is so that they can share this mission; enabling you to create customers that want to “belong for life” and become reliant on the value your services and products bring to them.
We found Retention Point to be an enlightening book with useful tips for any organization keen to increase customer retention, not only to achieve net customer growth but also to expand lifetime value of each ‘member’.
As Skrob explains, when the lifetime value of a customer increases so does the organization’s ability to invest more into obtaining new customers. Done well, customer retention can be the financial means to pay for expanding your reach further than your competitors.