What are the steps to improve customer retention? Good retention is the result of customer obsession. You have to talk about customer needs and benefits if you want to be customer-obsessed. You can’t talk about business needs or product features and think you’re going to get away with solving problems or thinking you’re customer-obsessed.
The three steps to customer obsession are starting with the customer journey, work backward from the customer, and run small experiments.
Customer Journey & Steps to Improve Customer Retention
I split retention into periods across the customer journey: short-term, mid-term, long-term–week one, week two to four and week five.
These are two questions for short-term retention: Do people use the product after their first session? Essentially, that first 24-hour period matters. How many times do people use the product in the first week? For the mid-term, does the product solve a painful enough problem for people? Is the problem a frequent one that people have? Long-term is the product a part of people’s daily life or workflow?
These are relatively simple questions you can ask yourself when you think about these buckets and hypothesize what your answers are. Then, go look at the data or conduct research to get the answers.
Working Backward From the Customer
This is a concept Amazon uses partly to build a product. They create a press release and they work backward from that release to figure out what the product is they can build that is way out there in the future.
Not everyone at Amazon does this process. The product teams that are the most successful do. However, the teams that flop the largest also do it.
An example is their phone. If you think about the Amazon phone there is something they got wrong about the future. If you think about Amazon Web Services, there is something they got right about the future using this process.
At Facebook, a similar kind of thing happens, where you can determine the success of a product team based on how often they work with the user research team. It sounds pithy and simple, but those are the things that the product managers over there think about from a success or failure standpoint.
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About the speaker
Hiten Shah is a co-founder of several SaaS companies including FYI, Crazy Egg, and KISSmetrics. Hiten has an email newsletter called Product Habits, where he and his co-founder Marie teach people how to do customer-centric product development.