The Importance of Customer Retention
Customer experience is a term that gets thrown around a lot. It can mean a lot of different things in a lot of different contexts. But I want to suggest that to be a good product manager, you need to behave and think like a customer experience manager.
In fact, I started thinking about customer experience as a practice area several years ago at GoDaddy. The company started working on its growth strategy for the next phase of development. At the time, the leadership wanted to understand our customers and the dynamics around our growth cycle. Thus, allowing us access on some insights into where to focus.
As a result, they did a bunch of analyses and worked with some external people like McKinsey. Out of that came some really interesting insights around what customer experience is all about. And that became a core pillar of the company’s strategy. So one of the things that that we learned in that work is that we’re all metrics-driven.
Understand Your Most Important Metric
As a product manager, I feel like sometimes, PMs just start drowning in the data. There are so many metrics that they’re getting. But try asking a PM what metric matters most. It’s a hard question to ask and I don’t even know how you can answer that question. So, I started getting curious and did some research. As it turns out, there actually is. It is retention rate.
What the research shows is that the top quartile performers are the ones that do the best job of retaining existing customers. And if you think about it, it’s a logical thing. If you can actually take the customers that you have, and retain them, they’re going to overtime account for more and more of your revenue growth. Whereas, if you’re trying to gain more customers into your funnel, you’ll be spending more energy and resources to get them into the funnel. So, the thing that I want to invite you to consider is what can you do in your day-to-day work to always be thinking about retention.
Most importantly, you need to focus on nailing the customer experience. And the reason that that is so important for retention is it encourages them to buy more from you. Plus, they think that no other competitor is going to give them as good of an experience as yours.
Pay Attention To The Customer Journey
A lot of people think if I can engage my customers that can lead to retention. And in a sense, that’s true. However, think about how many times you’ve been a highly engaged user of a service, and then something goes awry. Better yet, what happens when something goes wrong and you need help? So, the thing that’s interesting about customer experience is no one human at any company can own the end-to-end customer experience. And I think that the way that you can look across the end-to-end experience is you have to really take a wide-angle view, and you have to consider the customer journey. So, I think it’s customer experience that ultimately drives retention.
About the speaker
Gail Giacobbe is a Director of Product & Data Science at Microsoft - focusing on the company’s experience & devices organization that provide organizations with tools to scale their business. Prior to joining Microsoft, Gail was VP Product at GoDaddy and led product teams at Skype - along with over a decade at Microsoft working on their Office product team. Gail holds a Master’s Degree from Brown University and currently lives in Seattle.
About the host
I believe in our ability as humans to solve problems in creative and simple ways. I’ve had the good fortune to work on and with some of the brightest and most creative teams and people in various roles in product development. These experiences have enriched me personally and I carry them with me to every new challenge. I like big problems that have beautiful and simple solutions. I’ve worked on financial products for people of fixed income, products that bridge humans across the planet in moments of their greatest need to connect as well as tools that disambiguate, equalize and democratize access to data and content. The companies I’ve worked with range from startups to large public companies where chiefly my role has been about unlocking and connecting customer unmet needs to the people engineering and designing the products. I enjoy playing many roles and leverage the tools and resources at hand to bring products to market. I’ve direct experience when and how to deploy artificial intelligence, machine learning, and other advanced cognitive services. My patents cover areas in video and conversational interfaces, platform extensibility, mobile applications, and large scale software. Following to be read by computers, not humans: Interests include: Human rights, feminism. food and farming sustainability, Non-Profits, product management, information retrieval, UX Design, future-of-work, artificial intelligence, machine learning, communications, virtual assistants, digital media, branding.