Customer retention – Nigel’s story
Picture the scene – 7.30am on a cold winters day in January 2007. The sky was dark and forbidding, the roads and pavements icy. I’d just arrived at work and was immediately called into a director’s office – not usually good news!
The conversation went something like this: “You have a new job as of today”. “What?”. “We need to do something about customer retention. You’re now Head Of Customer Loyalty”. “I don’t know anything about customer retention”. “It’s just like sales and you’re good at that – work out what you need and get a team in place in the next 5 days. Your target is £50m profit impact this year”.
I spent the next few days in the office working out a team structure with, roles and responsibilities. Then 2 days interviewing and hiring. I started looking into customer retention. I read long articles and research papers with mathematical equations that I didn’t understand. It’s no shock that I soon became confused.
Then I decided to try and simplify everything. I could see reports about how many customers we were losing. But I couldn’t see why we were losing them or when we were losing them. I’d used customer journey mapping to show where we lost potential sales before. That had worked (sales went up 30%) so I decided to do the same again.
That meant my team and I talking to lots of people (it was a huge organisation). We started with how someone became aware of us and how they then started to consider our products. Then we looked at the different processes for buying. Next was everything that happened or that they saw whilst they had our products. Finally we reviewed the processes when a customer wanted to stop using our products.
We gathered lots of information. It included all the different communications from sales brochures through to annual statements. Many customer facing colleagues told us why they thought customers were leaving. Some of them suggested some ideas we could try.
So we sent a message to everyone in the company. It explained what we were doing and why. We also explained what sort of difference we wanted to make, asking for their ideas. Within a week we had over 300 ideas!
We took over a large room and mapped all the different customer journeys. It included examples of all communications and listed the ideas from our colleagues. Then we stood back and thought for a while.
There were some things that jumped out at us immediately:
- We gave customers lots of information in bright glossy brochures during the sales process. Once they had bought, the rest of the communications didn’t look as good and weren’t written in the same way.
- We saw lots of examples of customers having to ring us for advice or information. It was clear we could have sent them the information they needed before they had to phone.
- Our salesforce were great at selling, but never spent any time trying to keep customers. That was because because no-one had asked them to and they weren’t paid to do so.
- If anything happened that would cause customers concerns, we weren’t proactive. Instead, we just waited for them to call.
- Our administration centres were great at administration because that was their target. It meant they were efficient at helping a customer leave rather than trying to keep them.
From our journey map we created 19 initiatives that we knew we could deliver soon – within 3 months. We had another longer list of things we wanted to do, but knew we had to start having an impact immediately.
And we did – lots of hard work, but we started making a difference 3 days after completing the journey map. For the whole of 2007 we made small changes most weeks. We became excellent at communicating with colleagues, explaining what we were changing and why. We also told people about the difference we were making.
That caused 2 things – first we kept getting more and more ideas sent in by colleagues. Often they were small changes and we could use the person who had submitted the idea to make the change. That led to even more ideas. Second, people heard what we were doing and started to make changes themselves. They did check it was OK with us first!
The whole culture of the organisation changed. Before it had been 100% focused on sales, but now it became just as focused on customer retention. It had always been customer focused, but became much more so.
We found that people got used to change. They started to think about and challenge processes they had used for years. Before making a change they checked that it was the right thing to do for the customer. They even contacted other departments to see what impact any changes would have on them.
And at the end of the year we had beaten our target – our profit impact was £148m. A great result for my team of 5 who had influenced the whole business!