Don’t wait for your customer to leave

Hi there 👋,

If a customer purchases your product, and then doesn’t come back for more, you might assume that they need convincing.

You’ll look at how you can draw them back with an offer or carefully crafted email.

But the truth is that you’re likely too late at that point. Their mind is made up and they’ve moved on.

You’ve missed the opportunity to have a ‘wow’ moment.

Your customer isn’t convinced by your product or service. A lot of the time, it’s because they didn’t use or understand it correctly.

Sometimes tackling churn it isn’t about retention, but rather activation.

So how can we give a customer that ‘wow moment’? Today, I’ve got my own case study to share.

You’ve been focusing on retention

We often focus on Phase 3 of the customer journey when considering how to keep users. We look at emails to bring them back or offers to entice them into just one more purchase.

But we’re forgetting how much occurs before that point, or rather how much should occur.

The biggest impact happens in Phase 1, when you’re onboarding a customer and providing that ‘wow moment’.

This isn’t to say that ‘wow moments’ can’t happen later in the customer journey, or that you can’t focus on bringing them there.

But rather, that this is the most important moment to get it right.

Part 1: Ask yourself three questions:

You know the true value of your product or service. So consider what duration would reflect whether they’re getting that value.

If you’re losing customers before that turning point, you should focus on improving your activation.

For D2C brands, this can be harder to measure.

A general rule of thumb for products that require a repeat purchase is to see if there is a large drop-off between the first and second purchase.

RetentionX suggests that the best D2C brands are able to achieve 45% 2nd time purchases (note: this is different for subscription brands).

This is based on 2.5 orders a year and will vary per industry, e.g. beauty brands tend to look at lower retention rates according to experts.

If 1st to 2nd purchase is low, they likely didn’t thoroughly try your product. 

As a result, they stopped repurchasing it. So trying to win them back isn’t going to solve it. Retention should be getting stronger with every purchase after that rather than weaker.

Basically, you need to get them before it’s too late.

We realised our issue was activation not retention

I had this issue when working at Heights. Our main product, the brain supplement, was not something you felt after one month. Supplements can take a while to have an impact.

As a result, we had a high drop off between months one and two purchase.

A good proportion of those customers stated “I don’t feel a difference” as the reason for cancelling.

Our product was effective, and we had plenty of research to show that, but customers weren’t sticking around long enough for the ‘wow moment’.

So how could we keep them patient just a bit longer?

1. Financial incentive

We already had an annual subscription as well as a monthly option.

But there’s quite a big gap between those options, and it’s rare for someone trying a new product to opt for a full year of it.

So our product team added a three-month subscription option with attractive pricing. We saw a massive shift in first-time orders opting for quarterly rather than monthly.

This also ensured that they had 3 months of our product before their next payment, so plenty of time to see the effects promised.

2. Improved communication

We also realised that there must be an issue with our messaging. Customers weren’t realising that it would take longer to feel the effects.

So we focused on improving our communication, namely, including a timeline for the effects you could expect with Heights.

With this new quarterly plan and better communication, we saw a big reduction in our drop-off. Our overall monthly churn (note we were subscription only) was down to 7%-8%.

How can you focus on activation for your brand?

Once you’ve recognised that your issue lies in activation, it’s time to do something about it:How can you improve your customer journey in terms of activation?

How can you ensure that customers are recognising your value?

1. Onboarding

Reduce the friction at the start of your customer’s journey. Ensure they understand your product and communicate the values clearly. Ensure they begin with a product or setup that guarantees their success.

2. Wow moments

Create moments of high impact that help them to unlock the potential of your product or service. Your customer should feel connected to your brand.

You can achieve this by creating personal contact, like checking in on them, sending a little gift with their first order, and guaranteeing impressive customer care and support.

3. Become a part of their life

If applicable, aim to create a habit around using your product. How can you become ingrained in their daily routine?

Show them where you fit into their busy schedule, and why you’re a staple, not a treat.

A great example of this is one of my clients, Fiils. They offer refillable natural hair and body products.

Once you've bought their bottles in a starter pack, seeing that stylish addition to your shower (instead of a mess of plastic bottles) makes it easy for Fiils to become a part of your daily routine.

Recommendation

In every newsletter, I will also share a related resource to check out related to the topic of the week. These are not affiliate links.

We’re all looking for that ‘wow moment’, but they can be difficult to pinpoint. What resonates with a customer? What convinces them of something new?

I read The Power of Moments by Chip and Dan Heath as part of my Growth Book Club, and I’ve been thinking about it ever since.

It had so many examples of ‘wow moments’. Not just for businesses, but individuals who meet and become best friends within 45 minutes.

It’s the perfect reminder that these moments are happening all around us. Learn to be more aware of your own ‘wow moments’ and you’ll be able to replicate them for your customers.

You’d be surprised how often I start with a company and discover their issue lies in activation rather than retention.

And this is a good thing! It’s easier to convince a new customer of your product or service than to try and bring back someone who isn’t impressed.

First impressions matter; we all know that.

So let’s ensure that you have the best first impression possible.

Daphne

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