Episode 37 - What are 'Moments of Truth' anyway?

Did someone forward this to you? If so, click to subscribe

📰 Top Story: So, what are ‘moments of truth’ anyway?

As we explored in episode 1 of this newsletter, in any recurring revenue business, key moments in the relationship occur during the first 90 days, when usage drops, when the customer experiences an important service issue, or when they enter the cancel journey.  

The key here is that these life stages include ‘moments of truth’. 

The life stages themselves are not ‘moments of truth’.  

The life stages themselves contain key moments, which are typically very short, think seconds; these are moments of truth. 

If you optimise these moments, you can have a significant impact on retention.  

Retention in a recurring revenue business is about keeping your customer's spending with you, either by buying more of the same thing or by keeping an existing subscription active. 

In either scenario, customers are always, even subconsciously, asking questions like:  

• Does it live up to advertising?

• Does it work? 

• Is it useful? 

• Am I valued? 

• Do I still need this? 

• Is there something better? 

• I think I should go, but should I stay? 

So, in this context, some examples of retention moments of truth are: 

1. When you open an app for the first time, brands have about seven seconds to keep you engaged. If the brand loses your engagement at this moment, it can lose you as a customer forever. Customers need to get where they need to go quickly and intuitively. 

2. When the engineer arrives to install your new broadband service, they establish a new relationship with the new customer. This crucial interaction must be positive; otherwise, it can permanently damage the relationship forever.

3. The moment when you first start visit your new gym. You might have had a tour before this first visit, but that first time you walk in the door on your own, do you feel relaxed? Do you know what to do? Or do you feel unsure and unsupported? 

4. When you lose your bank card and join the service queue, both the queue and the interaction with the agent. How long does it take to answer, and how quickly is the card blocked? Are you reassured, or do you feel anxious? 

5. When you open your streaming app to find something to watch for date night, can you quickly locate something you will both love? 

6. You haven't been reading your newspaper subscription so you think you might cancel, but what is the very first page you hit when entering the cancel flow? 

So, to get these moments right, these signature moments, these moments of truth, you must first identify them. 

You can often do this intuitively. The first app open is always a key moment. 

However, you can also use analytics to understand what happened immediately before a churn event. If large groups of customers cease to be retained following a common interaction, it's likely that the interaction needs to be improved. 

You might think you are doing the right thing or that you have the right policy, but if the moment and how it is handled is correlated with defection, you likely have work to do. 

The importance of understanding value realisation

Only through using your product or service is value created for the customer. If you recognise customers realise value and you don't create value, you can recognise that in moments of truth, you must be there for the customer in ways they need you. 

To be there for the customer, you must first understand their value realisation journey. 

• What do they expect from your product or service? 

• Where do they need your help? 

• How do they expect to be treated? 

Once you understand these factors, you can improve retention by optimising moments of truth.  

The messy middle

Google talks about the messy middle, that space between exploration and evaluation in the purchase process and how you can leverage behavioural science principles to dramatically improve your chances of success. 

Check out Googles report here.

It works in the same way with retention, but with retention, it's about supporting the customer in achieving their desired outcomes on their terms.

Like Google research on the messy middle, you can leverage behavioural science to encourage customers to take action that benefits their engagement with your product and service and reduces the likelihood of adverse outcomes at customer retention moments of truth. 

Consider the insight around checklists; we like to finish what we start, and we remember unfinished tasks (Zeigarnik Effect & Ovsiankina Effect).  

You can help customers avoid a potentially negative experience at a future moment of truth by nudging them to complete a profile that tells you what type of content they would like, helping them manage their new broadband installation window in a way that best suits their needs, or by tailoring their workout plans before that first gym visit.  

Final thoughts

To sum up, a ‘moment of truth’ is a moment within a customer's life stage that can make or break customer retention. It is typically seconds long. 

If you optimise moments of truth, you will improve retention. 

Typically, you can understand moments of truth by 

(1) Analysing the types of interactions that are common to customers who are not retained (while normalising for customer-product fit) 

(2) Researching how customers realise value in your product or service. 

Then, armed with this information, you can either optimise the moment of truth itself or put in place retention initiatives that result in the customer having a greater chance of achieving their desired outcomes at moments of truth.  

Until next week, 

Tom  

My brand new CRM Marketing Course includes:

✅ 15+ strategy techniques you can immediately apply into your business 

✅ 68 niche AI tools CRM Marketers need to know 

✅ 8 exercises to apply what you have learnt

✅ 2 hours, 20 minutes of on demand video 

✅ 11 techniques for writing great headlines 

✅ 32 behavioural science techniques 

✅ 7 CTA tips and do's and don'ts

✅ 62 case studies to inspire you 

✅ 10 explainer copy techniques 

✅ 51 brand examples to copy 

✅ 11 learning modules