Rather than tirelessly tackling every potential churn incident, we targeted low hanging fruit to improve retention for a subset of happy customers. Here’s the strategy we used and how we executed it.
Lisa, our Head of Customer Success & Support, came to me with an idea. She noticed a decent amount of happy customers on our monthly pricing plan. They’d be better off on an annual plan, she thought.
It was a prime example of low hanging fruit.
We set out to improve customer retention for this particular group. With Lisa’s insight into customer behavior, and my penchant for writing and marketing, we crafted an initial plan using an email campaign.
Several months later, we declared this retention campaign a win. And in hindsight, we realized how useful it was to focus on improving retention for happy customers rather than solely mitigating churn for unhappy ones.
Especially as a lean startup, this practice allows us to keep ROI high and risk low.
Here’s a breakdown of how we chose this customer retention strategy, executed it, and evaluated the results.
Choosing the best customer retention strategy for our business
Our idea to move up customer retention using monthly to annual plans came from the inbox . All our best ideas come from the inbox. And they should.
When you’re ready to choose your strategy, begin by looking at what customers are already telling you. Anything including the word “customer” (a la “customer retention”) should involve the customer support team .
In our case, Lisa responded to a customer inquiry about switching plans. She realized that many of our customers were either not aware of our different pricing plans or didn’t remember they could switch after their initial trial of 英雄联盟下载平台.
She dug around the inbox using the search function to get some real customer stories . She searched for keywords like, “annual,” “monthly,” and “pricing plan” to pull some data.
Her hunch turned out to be true. There were a handful of cases where people simply weren’t aware of how or when to change pricing plans. This would be a perfect opportunity to combine customer education with retention.
We decided to send an email blast to every current account owner on a monthly plan. This would target about 2300 customers.
Executing our customer retention strategy using email
We executed this customer retention strategy using an email campaign. For most small businesses and startups like us, email is often the easiest way to move forward.
If the strategy worked, the benefits would increase our bottom line. But if it didn’t, there wasn’t much to lose.
Email campaigns are:
- Easy to a/b test,
- Quick to turn on or off,
- A noninvasive way to engage customers.
Plus, Lisa and I could execute this campaign entirely on our own. We didn’t need any developers or designers. We relied on our email marketing software to cover the logistics of sending. All we needed to do was perfect the content and send it to the right people.
While I was busy writing and rewriting, Lisa came up with our goals and metrics for this project. This was our first time executing on this kind of retention campaign, so we didn’t have a baseline.
When that’s the case, our own best practices advise us to start small, set realistic goals, and measure ongoing success using this first data point as a baseline.
We try not to set expectations too high for a first-run strategy. Something may work with a few tweaks. But we risk considering it a failure and moving on if the goal is too aggressive.
Since most of our customer success emails average above a 30% open rate, we set our goal at 30% for this one. For conversion rate (the amount of customers who actually move from monthly to annual plans), we decided that 10% would be a success.
Now that we had our goals and metrics in line, we were ready to create and send the email.
Our actual customer retention email campaign
I drafted the email using Google Docs. Once Lisa and I were happy with the content, we put it into ConvertKit (our email marketing software).
Here’s what it looked like:
Like any good email campaign, we A/B tested two subject lines.
Then, we uploaded our target list of current monthly subscribers and sent the email.
Evaluating the results of our customer retention campaign
Our email marketing software (we use ConvertKit) tracks all the important metrics for us after sending. We just need to open up our dashboard to see how the campaign is doing.
We used our initial goals to evaluate the results. Open rate exceeded our goal of 30% at 45%. We used click rate to determine conversion rate. We hit our goal of 10%.
Several customers replied directly to the email with positive feedback. They were eager to switch and happy we let them know. Qualitative win!
Both metrics exceeded our goals. And the ROI looks great considering we only spent about a day putting this campaign together.
Next steps: Turning our one-off email into a sequence
Since our initial email blast was a success, we decided to set up a recurring email to keep improving retention. We used the same email content, but created an ongoing email sequence rather than a one-off campaign.
Instead of manually pulling a list of eligible customers each time, we used audience parameters within our email platform. When an account owner hits the 90 day mark with us, they’ll automatically get this email.
We set goals for this sequence to be inline with our initial blast. This sequence has been running for a few months now.
Here are the current results:
Open rate is exceeding expectations once again. Conversion rate is just shy of our 10% goal but it continues to rise as the campaign goes out to more people.
This automatic campaign doesn’t require any work on our end. So really any conversion is a huge win considering the minimal amount of effort.
We continue to monitor this campaign each month to make sure it’s trending in the right direction. Making small adjustments to the copy or audience segments as needed.
Applying our format to your own customer retention strategy
We try to templatize everything we do here. It helps us scale as a growing company. And ensures that all our processes can be replicated and improved upon.
It also helps us share our learnings with other business owners and managers like you.
This post should give you a sense of how we implemented a customer retention strategy that worked for our particular business model. Maybe it could work for you too. And in that case, copy our email and go for the upsell!
But if you’re in a different market, industry, or growth phase, we put together this quick sheet with our general process and guidelines that you can apply to your own organization.
Our process is not dissimilar to an elementary science project. Come up with a hypothesis, test it using an experiment, and evaluate the results.
We just recommend experimenting with a tornado in a bottle first, rather than building a rocketship on day one.