This week's Newsletter:
Article: Are you afraid to show your customers their results?
What kind of churn do you have?: Find Out Now
Quote of the week: You don't have to measure every customer's results...
ARE YOU AFRAID TO SHOW YOUR CUSTOMERS THEIR RESULTS?
The dirty secret why some companies don't measure customer results
Last week, I posted my top 3 reasons companies don't measure customer results, and the brilliant Jeff Breunsbach replied with an insightful addition to the list ↓
"Or they have the ability and the results aren’t good so they hide behind them…"
He's absolutely right, and this dirty secret is depressingly common. I've personally experienced it...
📖 A STORY:
Several years ago, I arrived at a wildly successful 'unicorn' to lead Customer Success. Although churn was high, I was attracted by the product, which appeared to produce amazing results and, more importantly, could DIRECTLY MEASURE those results!
But when I asked to see them, I was told they weren't available. When I pushed, I was told, "Customers don't care. They don't ask to see them." WHAT?? 🐂 💩
I kept pushing, and eventually, they admitted that they didn't want the customers to find out how BAD their results actually were! WOW. 😳
HOW IT ENDED:
I immediately ordered fresh results metrics to be prepared for every customer and shown directly to customer leaders. And yes, it turned out that many of them were legitimately terrible.
But my team was astonished when we didn't lose a single account as a result of this "bad news tour," and churn went down overall! They shouldn't have been surprised.
What did I know that they didn't? →
► The fundamental reason customers stay is to GET RESULTS. And it only works if the results are MEASURED: how else will the customer know?
But it turns out that simply measuring on its own is valuable to customers.
📈 Our research reveals that customers who are not getting good results stay TWICE AS LONG if you measure and show them their bad results. (It goes up to 6 TIMES LONGER if the results are good and 10 TIMES LONGER if the results are superior.)
HERE'S WHY YOU SHOULD SHOW CUSTOMERS THEIR BAD RESULTS ↓
1️⃣ Showing customers their bad results proves you are serious about making them successful, rather than just stroking them for renewals and higher NPS scores. That's how you build Customer Bonding!
2️⃣ If they don't know they're getting poor results, they won't understand why they need to make the key changes in how they work. When they keep doing the same thing, they'll keep getting the same (bad) results.
3️⃣ If you don't continually measure and show customers their results, you lose engagement from key customer leaders. Lack of leader engagement consistently leads to failure and makes you especially vulnerable when key leaders change. It's only a question of when.
HERE'S THE LESSON:
✅ Truly committing to becoming a customer results-led company requires overcoming the fear of revealing bad results. Do it now.
I like to say:
👉 You don't have to measure every customer's results, just the ones you want to keep! 👈
The Key to Reducing Churn is Knowing What Kind You Have
There are different kinds of churn and knowing which kind you have unlocks the power to crush churn for good! I'm offering subscribers to this newsletter a free consultation to show you how to find your churn type. Click the button to schedule your session and start getting ahead of churn in 2024.
HOW TO USE CHURN TO IDENTIFY YOUR TRUE IDEAL CUSTOMER PROFILE
There's so much confusion about how to define the Ideal Customer Profile (ICP) because there are so many false ideas about what “ideal” means.
🛑 It’s tempting to focus on your “happiest” customers as measured by customer satisfaction scores like NPS. However, the data shows that satisfaction has nothing to do with customer retention. (link to research in comments below)
🛑 Another option is to go with the customers in your most attractive target market. But just because you want certain customers doesn’t mean that they want you or that you can make them successful.
🛑 How about focusing on the customers who DO want you: those who are most likely to purchase? The problem is that a lot of these buyers don’t end up sticking around very long.
Ultimately your ICP isn't a decision that you make; it's what you observe in reality. Let me explain...
CHURN IS THE TRUTH
The growth of any subscription business is ultimately a function of customer retention. And by far the best predictor of retention is measurable customer results.
📈 Customers with measurable results stay 6 TIMES LONGER on average!
So, here's the simple principle to apply:
👉 YOUR IDEAL CUSTOMERS ARE THE ONES WHO ACHIEVE THE BEST RESULTS. 👈
❎ NOT the happiest customers.
❎ NOT the wealthiest customers.
❎ NOT even the customers who are most likely to purchase.
WHAT DO WE REALLY KNOW?
The reason ICP is so difficult to define effectively is that we are not great at predicting things.
🍔 Clayton Christensen famously demonstrated this when he showed McDonalds that they didn't know who or what their products were REALLY for! They imagined their ideal customer, rather than observing it. 🥤
Too often, we think we "know" who we are FOR when we have only imagined it.
THE SOLUTION
The good news is that churn and retention sort this out because the customers who achieve the best measurable results against the most important business objectives stay the longest.
Getting your data in order and building the right analytics may take some real effort, but the resulting insights are invaluable. (Let me know if you need help getting started)
The goal is to use retention data to identify the customers that stay the longest. Rank them in order, and start with the top group. These are your "BULLSEYE" customers.
Now use that group to answer 3 KEY ICP QUESTIONS:
1️⃣ What are the most important measurable business results these customers care about?
2️⃣ What kind of customers do these key results matter most to?
3️⃣ What attributes enable these customers to achieve the best results?
The result is a new clarity that enables you to target and attract more high-retention customers and helps your existing customers achieve more.
QUOTE OF THE WEEK:
You don't have to measure every customer's results, just the ones you want to keep!
