Retention Optimization Is Playing In Defense, But It’s Actually Cool

Retention optimization is a crucial set of structured tasks in a wider organization, requiring sharp skills.

In many regards, it is just like the defensive line in any team sports: strategic, and essential. And it steadily suffers from an underestimated recognition in the wins.

Playing in defense Is Not The Cool Stuff

Who ever wanted to play the goalkeeper at school?

Who is crazy enough to place his body in front of 7-inches & 400-grams handball balls sent at full force, high speed – almost 100 km/h, just a 6m from the goal?

I personally think it is a silly job. Not only it is dangerous, but you can easily be held responsible for a lost game. Less often, for the win.

In music, the band is the team, led by attacking players Guitarist and Lead Singer. Keyboards, Drums, are the defense, and the Bass player … is the goalkeeper. There is a famous saying that say Bassists don’t get laid. The Guitarist takes it all.

In general, playing in defense is not cool: you don’t get the glory, you don’t get the girls.

However:

Would you bet 1$ on a team playing without defense?

Have you ever heard your favorite song without the bass?

Work teams are not different from sport teams.

You have leaders & followers, talented players and those you avoid to play with, friends and enemies, underestimate ones, and overpaid ones …

But above all, you have the attack and the defense.

And like for sports team, the attack get the fame.

We Are The Champions, No Time For Losers

Among all the profiles in a team, you have those dedicated to bring more money to your company – the acquisition part. Traffic manager, growth hacker, acquisition manager, sales, all hired by the boss as so many levers to bring more customers to the service, and build growth.

I call them the hype ones: the ones your boss preach the successes of, the ones that are in the light.

This is true. What people outside hear of your company is :

• “We hit a 3-digits growth this year!”
• “Every month is a new record of revenue!”
• “We signed a 5-years long contract with <this awesome company>!”

Everything. On. The. Attack.

What is so uncool with the defense?

Some Of Your Customers Are Actually Leaving

This, is also true.

Put aside, for a moment, the great story you serve to your friends & prospects.

In reality, every service has happy customers and unhappy customers. And some of them are so unhappy that they leave your service.

Of course, it does not mean that you should communicate on that, it would probably be a mistake.

But well, do you know what is even a bigger mistake? 

– not caring about this churn fact, as if it were not existing.

Do not laugh. It is more common that you think.

Actually there are companies, web companies included, that just fight in attack, with a bunch of salespersons. These companies struggle with spending way too much money in sales to compensate the churn.

Because they forgot to work on retention optimization and failed to build an efficient defense strategy :

• building a product with sufficient value,

• delivering a great service in which customers want to stay,

• delivering an outstanding experience that bring customers to recommend it.

Working on retention optimization is all that, and much more.

Of course, these are extreme examples.

What remains true is that, however it is great to focus hard on conversion optimization, you should not only work on your “win” indicators – acquisition, conversion… : “loss” indicators – churn, or turned positively, customer retention & satisfaction – are even more important and should be addressed in priority.

Investors Are Merciless Referees

A CEO, CMO or a Salesperson who show up with such positive figures about the company remains very right. This is the purpose of their job to do so, in order to give the most positive image.

But there are some people who you can’t “lie” to.

Investors.

The bad news is, they are the ones that will actually have access to the figures, and look into them.

And when it comes to close your annual budget, or get to investors for a new funding round, they will look into ALL the figures.

• the retention rate, in first

• the revenue evolution per existing customer

• the money you spend into getting new customers in comparison

Noticed the importance of the numbers you show in defense?

Then here, guess who is saving the whole team? People in defense.

The truth is: people working on retention optimization are the anonymous heroes in a team. Not the ones you talk of, that make your communication strategy, but actually the ones who get your business running.

Entrepreneurs should never ignore that.

Money Time In The Mercato

Building a strong defense team is all about money.

Here is a selection of the famous sayings that retention-optimization-solutions-selling-companies use all the time:

It costs more to attract a new customer than to keep an existing one
It is way more likely to convert again an existing customer than a new one
Most of your future profits will come from a few of your existing customers
Customer retention can also have a positive impact on acquisition

Of course, people in the defense, who work on retention optimization are a cost, and it is difficult to measure their real direct impact on your growth.

But because it is hard to measure does not mean it does not exist.

Now, think about the opportunity cost of:

• not reducing your churn rate by 5% every month, after one year.

• losing your top 3 existing customers because of customer service issues.

• not having customer recommendations for your service.

As a rational manager, is it really a price you can pay?  

The Overtime.

One day, you will receive a call from someone, willing to buy your product, because he heard one of your customers recommending it – actually, selling it for you.

Or, you will receive a call from someone who use to be part of your customers, and who wants now to implement your solution in the company he moved to.

This day, you will realize how cool it is to play with a good defensive line.