Startups live or die based on their growth: nothing worries CEO’s more than a flagging growth percentage. Given this immense pressure, it’s not surprising that most startups choose to focus on the place where logic might dictate growth resides: growing the sales funnel. Which is why one sees huge spends on discount schemes, advertising and marketing, to bring in new customers.
But this over-reliance on increasing the number of users coming in often leads to shortsightedness when it comes to maintaining the customers you already have. It’s a well-known fact that it costs 5 times as much to create a new customer as it does to keep an existing one. Given that fact, the more resources you dedicate to retention, the more you will keep that growth trajectory heading in a positive direction. And one clear way that retention is proven to be improved is by regular communication with users. The most effective (and least difficult) way of marketing to users is via email, so here are 4 types of emails that are a must to send out at various stages of your customer’s life-cycle:
It’s truly shocking how few companies send out effective on-boarding emails. Although it’s true that onboarding can happen in-app, via a tour or a feature highlight screen, an email serves as reinforcement of that learning. It also provides a lasting reminder that the user can go back and refer to later. We’ve noticed a few trends in leading on-boarding emails that are important to maintain:
- Keep it informal, and about the user: Most on-boarding emails are about the product – whereas what you really need to focus on is the user. Design a drip campaign that begins with asking the user what they expect to receive from the product and send subsequent emails that focus on those aspects that are important to the particular user. (This is basically customer segmentation at work)
- Offer information in small portions: Especially when the product or app is large or feature-rich, the information being sent in the email needs to be as concise as possible, focusing on one feature (or even one aspect of a feature)
- Show, don’t tell: Canvas your existing customers for case studies where they used your product to achieve success and highlight those in your on-boarding emails. This has the three-pronged benefit of inspiring new users to try your product, it makes existing customers who are featured in your case studies happy (thus leading to increased advocacy) and it gives clear information on the feature itself (which is what you were trying to achieve in the first place!)
New Features & Regular Updates
One of the side effects of focusing on new users vs existing users, is you tend to not communicate as much with existing users. Even if you are incredibly active on social media, there’s a good chance that most of your users aren’t following you – this is especially true of B2B products, but can be true of large B2C products as well. A regular newsletter type email does wonders at keeping your customer aware that the product is constantly being improved and that features are being added. It’s vital to highlight customer requests that have been fulfilled, in these emails, as it shows that your team is not just abandoning the product. This type of email is all about building your reputation in the eyes of your existing customers as a provider who is on the ball and actively looking after their interests.
Proactive Customer Service
If you’re running a startup, especially a SaaS startup, you already should know the importance of service. That is what makes or breaks the experience (and your business). Therefore, as soon as possible, you should give a thought to the concept of proactive customer service, IE, reaching out to your customers who might be having problems using your product before they think about reaching out to you. While this is again easier done with products where you can measure the users’ engagement with your product, it is something that can be applied to almost every startup business model. By looking at engagement data (you ARE collecting engagement data, right?) you can identify users who have stopped or drastically reduced engaging with your product and reach out to find out why. This process can be automated if you’re a startup at a large scale, but in the early days can be done by hand as well. In fact, it’s probably better to do it right from the very beginning, as it will engender the culture of Customer Success right from the beginning.
Whatever your churn rate might be, one key area of improvement is to pursue those customers who might have already stopped using your service. If you have implemented a feedback mechanism to find out why users are churning, you can send them targeted information on when you have fixed whatever the problem is. Customers rarely see such proactive behavior on the behalf of service providers and acts like this go a very long way to rebuilding trust. Provided that the reason they churned is not un-fixable, you should do everything in your power to win back customers you have already lost. After all, you already spent money to acquire them, there is no sense in abandoning them, especially if there’s an easy fix to their problem!
Of course, these emails are not the only ones you’ll have to send – and some of these may not be as applicable as others, depending on your specific business needs and business model. But this is a great starting place to examine the potential of using email to boost your retention and fight churn. After all, that’s how growth is assured!
ABOUT THE AUTHOR
Vahishta Mistry (twitter @fight_churn_in) started helping San Francisco startups fight churn and improve retention in 2013 while on a 2-year backpacking trip. He’s a big fan of predictive analytics, marketing automation, lists, and the Oxford comma. Back in Mumbai now, he consults with startups on churn and blogs (professionally) at customersuccess.in and (personally) at vahishta.com.