Neglected, then out the door

June 26, 2013June 25, 2013 ~ Sasha ~ 3 Comments

I was a DIRECTV subscriber for about six years, until I wasn’t. Meaning, over time the ~$65/month (once it was all said and done) started to sting more and more, and while I was generally happy with the service, the volume of alluring communication I got from everyone else pushing me to switch was in marked contrast to the bill and nothing else I’d get from DIRECTV month after month.

In the TV and telecom businesses, customer “churn” is one of the most important metrics to manage. This is because customer acquisition and setup costs are high: the costs of giving someone a subsidized phone, or of sending a technician to physically install a costly satellite dish in each new customer’s home, are layered on top of all the regular sales and marketing costs everyone takes on. That makes it especially important to keep customers from leaving once you’ve gotten them on board.

The challenge for DIRECTV and its ilk is that they have no information at all about how happy I am. As long as I’m paying, I’m paying – until the day I leave, ending what could have been a 10 or 20 year relationship (which, at $65/month is somewhere between $7,800 and $15,600 in lifetime revenues).

The irony in the TV business is that the marginal cost of surprising or delighting a current customer is so low compared to the value that walks out the door when she leaves. A free month of HBO for every year I’ve been a customer, or getting NFL Sunday Ticket for free one season if you’ve been a customer for five years (just hypothetically, of course!), could pay off in spades.

Because metrics (customer acquisition costs, churn, etc.) are so much harder to come by in nonprofit fundraising, and because each “customer” is so different in terms of how much they pay/give (DIRECTV’s customers might pay $30 or $200 a month, but that’s about as big as the range gets; a donor could give $500 or $5,000,000), we rarely do the math on customer acquisition costs or churn. And so we hunt for the next donors at the expense of tending to the donors we already have. It’s so easy to forget to delight those who are already with us – to give our true believers tools to evangelize on our behalf, and to make those who are happy feel proud, delighted, and occasionally surprised at the little gifts we give them to say “thank you.” (And by “gifts” I don’t mean trinkets, though those are nice too. I mean helping them see what they have helped accomplish, and showing them true and honest gratitude.)

We all have lurkers in our midst who are about to leave but we don’t know it. Of course some folks will leave no matter what, and some will be too expensive to retain. But let’s at least make that a conscious choice.

It’s a shame and a loss when someone who has been supportive, someone who has been a loyal and important customer, walks out of the door for no better reason than low-level neglect.

Lifetime guarantee

November 28, 2012November 28, 2012 ~ Sasha ~ 2 Comments

18 months ago I got a fancy work bag as a gift. Within a year, the little ring holding the strap to the bag broke; a few months later the second one broke.

I finally made my way to their store in Soho in New York’s West Village to see if they’d fix or replace it. Sure, they said. It would take about a month to repair, and would cost me $150…to replace two little metal O-rings.

If you’re from the US you probably remember, way back when, when LL Bean was famous for taking back ANYTHING and always being willing to repair it or replace it. This was long before the web or Facebook or social media yet, despite a lot more friction around messages spreading, that story spread – like the one about the guy who had 30-year LL Bean duck boots that finally gave out, he sent them in to LL Bean, and a brand new pair arrived, no questions asked.

This contrast got me thinking about what we see when a customer takes the time and the effort to bring back something that didn’t work or disappointed her. Sure you could think her as a cost to be minimized. You could make sure that the clerk she speaks to doesn’t have the authority to make a call to do something to help her, and you could definitely write a policy that’s going to minimize unwanted returns from people trying to scam you.

Or you could see her as someone who cares enough about your product to come back, someone who’s ready and willing to be wowed or disappointed right at that moment, someone who may as well be holding up a sign that says, “THIS IS YOUR BIG CHANCE: turn me into an evangelist for your extraordinary service!”

So of course you show that person the door…?

I don’t care much about the bag. But it did get me thinking about the rare opportunities we have to really keep our promises. It’s hard to imagine, even for folks in the nonprofit space, cases where a “lifetime moneyback guarantee” wouldn’t win you legions of loyal fans who will shout your story from the rooftops.

It’s not just the right thing to do, it also will pay off handsomely in the end.

Bump and grind

October 5, 2011October 4, 2011 ~ Sasha ~ 3 Comments

WordPress.com, of which I am a very happy user (cost = free, uptime = 100%, functionality = great and always improving) has one interesting limitation – the blog statistics one can easily access are “blog traffic,” meaning the number of site visits you get on your blog. There’s no direct information about how many RSS subscribers you have or people subscribe to your posts by email (never mind stuff being retweeted, re-Facebooked, re-emailed).

If blogs were magazines, this would be akin to tracking how many copies you sold at the newsstand and ignoring your monthly subscriber base.

The thing is, monkey see, monkey do. Seeing those on-site stats daily makes you care about their mostly random vacillations. And while they do matter some – if you’re writing good content, others will link to it, repost it on social media sites, etc. so your onsite traffic will increase – they’re mostly noise compared to getting and keeping loyal readers. For example, getting 25 new RSS subscribers is obviously more important than getting 5,000 hits on a single day (25 subscribers = ~5,000 impressions /year), but it just doesn’t feel that way.

So when something big hits that gets you visibility, there’s a natural tendency to thirst for the next big bump – the big sale, the big media hit, the big donor, the big something new. Keeping your true fans insanely happy somehow seems like less of a victory than landing the next big customer, maybe because happy customers are often quiet, meaning there’s not as much feedback there as you’d like or need.

And so we get one big bump, one big new sale, one major new donor, and the moment things go back to normal we thirst for that next bump and the accompanying adrenaline. It feels exciting to bring in someone new, to make that big pitch, to close the sale. After all, isn’t big game hunting what this is all about?

Well no, actually. This game is part hunting and part gathering, and, in the long-term, nurturing and feeding your biggest fans pays off a lot more than that next potential big win…in fact, looking off too far into the distance is a surefire way to make your most enthusiastic supporters feel like chopped liver.

That constant cultivation, the care and feeding, is the real work that makes a lasting impact.

The indifferents

December 23, 2009December 21, 2009 ~ Sasha ~ Leave a comment

There’s a group of people out there who love you. Your passionate fans who talk about you to anyone who will ask, who spread the word and your message and carry your brand with you. Cherish and nurture them.

There are others who have actively decided that you’re not for them.

And then there are the indifferents. The ones who have known about you for a while, who have heard your story for months or even years, who you’ve cultivated tirelessly. And they’re still not acting, not buying, not convinced.

What do you do about them?

Here’s a hint: which is more likely, that the person who has heard your message 15 or even 50 times will suddenly be convinced if you have just one more go at it? Or that you’ll find someone brand new and get them excited? That’s right, go for the new guy.

By the way, there’s a difference between indifferent and unconvinced, but it’s going to take a whole lot of work for you to figure out who’s who, work that may never pay off.

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