Welcome to part two of The Three Most Important Times of the Subscription Customer Lifecycle by David Walsh, Marketing Director at Intuit.
In part one, I highlighted what I have found to be the most important points in the customer lifecycle:
- Initial sale
- First 48 hours
- Final 24 hours
Refer to The Three Most Important Times of the Subscription Customer Lifecycle – Part One for specific best practices in support of the initial sale. We’ll pick up here with tips for the first 48 hours and final 24 hours.
First 48 Hours
The first 48 hours are the most important to set up for the rest of your customer’s lifetime value. Now is the time to make new users feel welcome.
Say Thank You
So many companies forget this. Remember to simply thank customers for the purchase, remind them what they bought, the cost and the main points of note. Look at administrative emails versus marketing emails and see how the two coordinate within the customer lifecycle. Administrative emails can also drive more business, so always be polite.
Monitor Early Activity
Most key indicators of future behavior happen within the first 48 hours, so measure and manage them. Some recent research I have seen conducted found the following indicators:
- If a customer uploads our company logo in the first 24 hours, they are much more likely to be with us in 12 months.
- If a customer connects their bank account information, they will be about £100 more valuable over the year.
It is vital to look at what your new customers are doing within these first 48 hours. It forecasts future behavior so you can segment them appropriately.
When customers contact you, it costs anywhere from $5 – $15 depending on the complexity of the request. So you want to reduce the number of contacts. But how? It’s actually pretty simple. Sit down with your customer service team and ask them what the top five drivers of customer contacts are. Then address those top questions in the first 48 hours of customer lifecycle communication. Include them in the welcome email, on the home page of your website and anywhere else you communicate to customers. Proper communication can remove some of these issues up front and increase lifetime customer value. I’ve done this, and the impact is amazing.
Make Login Details Easy to Find
Make it easy and obvious for customers to reset their password. Ensure security – but don’t make customers jump through any unnecessary hoops. The value driven from the forgotten password link in emails over my career would equate to many tens of millions in revenue.
Use In-Product Messaging
As we move into the cloud, the product will encompass the website, marketing and the store. There will be fewer and fewer entry points to purchase. It will all become one. We know most customers opt out of email communication. We know open rates are horrendous. Email does have its place. But to successfully manage the customer lifecycle, you need to evolve your in-product messaging. In-product messaging has a 100 percent delivery rate. Look at where and how within the product you can drive activity.
Don’t Oversell or Sell Them Something Else (Yet)
Do not ask your customer to upgrade in the first 48 hours! If you’ve done it right, your customers have just had the perfect buying experience. You moved them through the process in the most optimized way to the best product for them. Then, during the first 48 hours, you tell them that’s not the right product for them and ask them to upgrade or cross sell them something else? Not good. Go for the upsell at the initial sale. Don’t make them regret their purchase. Trying to upsell right away annoys the heck out of customers. It’s one of the biggest drivers for refunds. Don’t do it.
Final 24 Hours
The final 24 hours of the customer lifecycle are critical. Start talking to customers no less than 30 days out. Legally, you may need to remind them about auto renewal before 30 days. I would suggest contacting them seven days out, 48 hours out, 24 hours out and then on the day of renewal. Most customers who are not on auto renewal will renew at 24 hours.
Remind Customers of Subscription Value
The most successful way to deal with subscription products is to have a great value proposition from the beginning. Tell your customers why the product is best as a subscription. Be consistent with messaging. I have lived through two class-action lawsuits at two different companies. Subscription products are new and under the microscope. Make sure your messaging is always clear and fair to customers.
Direct Mail Can Pay Off
I’ve also found that sending emails to update credit card information is not enough. We’ve seen great traction from an offline direct mailing. It looked like a PIN number mailing from the bank. That mailing led to a 10 – 17 percent increase in retention rates. I know direct mail is a big expense. But do the numbers and be creative. Try it with your most valuable customers and with your most valuable products. I can assure you that if you do it well, direct mail can drive future retention.
Always think about the legal implications of SaaS and subscription products. Work with partners who are best in class and make the right moral decisions, not just the monetary ones.
Now Sell Them More
Now is the time to upsell and cross sell. Don’t charge them more at subscription renewal. Move them to a more expensive product for free. You will make more money over the lifetime and increase customer loyalty. Go for the cross sell too. Are there other products you can add to their cart?
To successfully manage subscription customers, know the best practices for messaging them during the first 48 and last 24 hours of their subscription.