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Writer's pictureLauren Feehrer

We’re Never Getting Back Together! The Top 5 Ways to Keep Customers from Leaving Out the Back Door


I recently cancelled a subscription to a software product. I didn’t go out of my way to do it; I received the notice that my subscription would be renewed. That reminded me: I never use this! It is of very little value! Why am I paying for this? Cancel!


Sure, as I was cancelling, they asked the one question: “Why are you cancelling?”


But it was too late. It’s like a partner who pathetically pleads and begs as you’re breaking up, “I can’t live without you. You mean everything to me. Just give me a chance to show you that I can change.”


And before I break out into a Taylor Swift song, let’s back up a step and talk about bad profits. Bad profits, as Fred Reichheld points out in his brilliant book Winning on Purpose: “are giving business a bad name; they result from exploiting customers and thus weaken support for capitalism.”


Great example: car rental companies charging a $7 device fee for an electronic toll pass for every day of the rental period, charging an additional driver fee for the spouse to drive, and God forbid you don’t return that jalopy full of gas! Bad profit, bad profit, bad profit.


An auto-renewal that’s snuck under the rug is a bad profit, and one that many companies got away with for years. A C+R Research Survey revealed that 42% of consumers forgot they are still paying for a subscription they no longer use. And a Hiatus Survey found that more than 70% of the surveyed consumers say they continue paying for unwanted subscriptions because they simply forget to cancel the service before it's renewed. And 29% say they didn't know the service was set for auto-renewal.


Companies will no longer have a way to sneak the subscription in, thanks to new laws from the FTC. But regardless of the legality, let’s talk about the experience.

We welcome new customers with open arms through our beautiful front door. There are handshakes and smiles, maybe even champagne. They get a “red carpet experience” from our sales and marketing teams. They are onboarded. Trained, perhaps. But then what? What are we doing to keep customers from leaving out the back door?


According to Invesp, acquiring a new customer is five times as expensive as retaining an existing customer. Increasing customer retention rates by 5% increases profits by 25-95%."


Perhaps we don’t want to keep every customer. I get that. Not every customer is a good customer. But what about the good ones?


By the way, according to a study by Lithium, repeat customers tend to spend 33% more than new customers.


Now there’s a good question: Do you have a way to identify the good vs. the bad? Have you done a whale curve or decile analysis on your customer base? That’s great that you know your profit makers from your profit takers! Are you applying any other variables to that analysis, like referrals or longevity?


Ok, so now that we know who we want to keep around, how do we put the customer colander in place?


1. Build trust. And keep it. Do what you say you’re going to do. Set expectations and strive to not only meet but exceed them. Don’t break promises.

2. Seek advice from customers. Ask for feedback, especially as you innovate. Make them feel a part of the team.

3. Treat each customer as an individual. Learn and support their preferences. Meet them wherever they’d like to be met. And make it personal.

4. Serve as a guide to your customer, the hero. It’s not about you. It’s about them. Anticipate their needs and help them on their path.

5. Finally, don’t wait until the renewal period to check in. Define your customer touchpoints, ask the right questions, and be prepared to act if things aren’t right. Close the loop effectively, and you’ll have a loyal customer come renewal time.


Is your company struggling with customer retention? Do you have a customer colander? Would you like to increase customer lifetime value and are ready to focus on these top five?



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