Episode 20 - The Retention Hierarchy of Needs
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Welcome to episode twenty of the Retention Blueprint!
In this episode:
Top story: The Retention Hierarchy of Needs
Case Study: L’Equipe
AI feature: Interview with Martech Guru Frans Riemersma
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📰 Top Story: Retention Hierarchy of Needs
This newsletter reaches a wide spectrum of seniority within retention, from the C-suite to VPs, Directors, and Department Heads to managers, executives, and newcomers to retention.
Each level of seniority and role type can influence different dimensions of the retention hierarchy of needs.
Retention Hierarchy of Needs
Core Value Proposition
This is what you offer and at what price to who. Factors that influence this include:
Product / Service
How you craft your offer inc. pricing tiers
Competitive offerings & their prices
TAM
Brand
Organisational culture - are you short-term profit focussed or customer-first
Previous newsletters that cover topics in this space include:
Episode 2: Customer Love = Growth
Episode 13: How Improving Retention Can Double Profits
Episode 14: Retention is critical because your target market is finite
Who You Attract
How you market and who you market to affects customer retention.
Run a ton of $1 free trials; your customers are unlikely to be sticky (but see what L’Equipe did to tackle this in today’s case study).
Run a blended CAC; you are likely to over-index on low-value subscribers.
Provide an attractive discount on annual versus monthly subscriptions, and you will acquire more loyal customers for higher CLVs.
I covered the Retention - Acquisition Connection in episode 5 and we will cover offers, pricing and free trials soon.
How You Manage Relationships At Moments of Truth
At the top of the pyramid is how you manage customer relationships at critical moments of truth.
Moments of truth are:
First usage
Sign up journeys
Onboarding programs
How you create habit
Handling usage declines
ARPU enrichment journeys
Managing the service experience/service issues
Handling cancellation journeys
All moments of truth are influenced by
Journeys you build
Execution tactics
How you leverage data & personalisation
Behavioural science
How you leverage AI
Several previous episodes have covered these areas; we will expand on them in future episodes.
Why this matters
This matters because retention is complex.
Retention is the sum of all customer interactions.
To effectively manage retention, leaders must assign responsibilities to their team members for different components of the retention hierarchy of needs, develop RACIs for each, and track performance KPIs relevant to each element.
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💼 CASE STUDY: L’Équipe
Together with Poool
Limiting churn when increasing the price from a highly discounted subscription offer
Highly discounted subscription offers are great for acquiring new customers, but they can have poor retention rates and sometimes not pay back.
L'Equipe (which has 1.5 billion page views a month) sold thousands of subscriptions at €2.24 a month (instead of €12) in celebration of the 100-day run-up to the Paris Olympics.
To limit subscriber loss, L’Equipe deployed five tactics focused on driving subscribers to specific newsletters, downloading the mobile app, announcing new content, inviting subscribers to join L’Equipe’s Whatsapp group and warning subscribers that they would soon lose access to crucial content. To do this, they used four simple Poool Engage widgets:
Action #1: Show on-site banners with a 1-click newsletter subscription
Display settings:
Format:
Sticky banner, top of the screen
One-click newsletter subscription
“Close” option available
Display rules:
Show 10 times maximum
Only on article pages
Both web mobile & desktop
Action #2: Suggest mobile app download
Display settings:
Format:
Sticky banner, bottom of screen
Redirect to Apple or Android app store
“Ignore” option available
Display rules:
Capped to 3 times max every 7 days
Only on article pages
Only on web mobile
Action #3: Announce which content is about to be released
Display settings:
Format:
Sticky banner, top of screen
Foldable
No redirection, no link
Display rules:
Capped to once per day
Show 10 times maximum
Only on home pages
Action #4: Invite readers to join their WhatsApp channel
Because the team at L'Équipe knows that their WhatsApp members will stay subscribed for longer, they launched a pop-in promoting it, for subscribers only.
Display settings:
Format:
Toaster
“Close” option available
Display rules:
Show once per week
Only on article pages
Only on web mobile
Action #5: Warn churned users that they soon won't have access to this content
Display settings
Format:
Sticky banner, bottom of screen
“Close” option available
Display rules:
Show 10 times maximum
Only on articles pages
Both web mobile & desktop
Initially built for at-risk subscribers, these strategies have been progressively deployed for all cohorts.
Find out more about Poool here.
🤖 AI Feature
Last week, I met with Martech Guru, Frans Riemersma, aka 'the King of Martech evaluations' and leader of the Martech Tribe, to discuss all things Martech and AI.
Tom: How did you start the Martech tribe?
Frans: Five or six years ago, I started collecting data on the market because I didn't understand it. Before long, 150 people in Europe and beyond helped me with country information, landscapes, etc.
Tom: How do you keep up with the 14,000 tech vendors in the market?
Frans: The 150 volunteers became 500, so that helps. And then there is, of course, the beauty and the joy of machine learning and scraping.
Tom: How is AI going to impact Martech?
Frans: AI agents in the background, completing tasks for you, with software being created on the fly in the back end and as a user you don't even know. AI Agents building stuff for you to complete tasks.
Tom: What are the different categories of Generative AI in Martech?
Frans: One is Indie Gen AI tools. Do one trick really well e.g. remove an image background. Do some lead qualification, look for look-a-likes. Second is incumbent tools embedding GenAI. The third category is what I call the disruptors. ChatSpot from Hubspot is an example of where this could be going. It's reinventing the entire marketing automation concept with one chat box and bot. You can ask your questions, and it delivers outcomes, like telling you how many contacts you have, adding contacts, conducting prospecting, creating reports, creating marketing content and more. Everything you need is delivered via chat.
Tom: How long will it take to see entire retention marketing journeys created via a chat prompt?
Frans: My guess is that it will still take some years. Technology is making big leaps, but the limiter is us humans. We're always the bottleneck. We have to learn. We're still apprentices, figuring out how to master GenAI.
Until next week,
Tom
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