It's Time to Hire a Retention Expert: 6 Clear Signs
What is a retention expert anyway?
Whether you are a marketing leader in SaaS or in B2C, you have to make clear decisions about the priority and order of hiring for your team. Although early on most companies will decide to hire employees with broad skillsets – “kitchen sink” employees – eventually most marketing teams consist of specialists.
The standard model for hiring marketing teams is to start “top of funnel” with paid acquisition experts, content and SEO teams, branding, and marketing operations. This model works to create growth for a time, but an acquisition-only focus ultimately limits growth potential. To grow sustainably, a company needs to give significant attention to its existing customers.
In comes the “retention expert”, sometimes referred to as Customer Marketing. Unlike acquisition teams, they are tasked with increasing customer satisfaction, repurchase rates, and lifetime value. They usually are familiar with outbound (email) and conversational marketing tools (text, sms, social messaging).
The greatest retention experts have deep customer empathy. They do amazing programmatic projects like retention offers and programs to proactively engage and save “at risk” customers and keep satisfied customers happy.
How do you know when it’s time to hire a retention expert? There are some clear signs:
You are “Churning and Burning” Customers
Acquiring a customer can be up to 25x as expensive as retaining an existing customer. If you are burning through your acquisition budget but not seeing growth in your revenue or active customer base, it’s likely that you have a retention problem and need a specialist to fix it.
How much churn is too much? Checkout the chart below for a benchmark:
Increasing CAC
Many components go into customer acquisition cost, but one of the biggest ones is word of mouth. If prospective customers have heard good things about your brand from existing customers, then they will be more likely to click on that ad and buy your product.
CAC can increase due to many factors - competition, market dynamics etc, but if you are finding that CAC is increasing and you can’t explain why, you might have a retention problem.
Customer Complaints are Up
A key responsibility of a retention leader is keeping in touch with existing customers and ensuring their feedback is addressed by your product and customer success teams. If you are seeing increases in customer complaints or drops in your NPS, it might be time to get a retention expert to fix the problem.
You Don't have a Deflection Funnel or Retention Strategy
The biggest sign that you need a retention expert is that no one is focusing on it. If you are a subscription business and you don’t have a clear retention strategy, it’s time to bring some focus to that activity.
If you'd like to learn more about Deflection funnels, see our blog post.
It’s unclear why customers are canceling
Gathering and distributing cancellation metrics is a core function of retention experts. From cohort analysis to cancellation reason deep dives, you need to be looking at these metrics to stay on top of your customers and competitive landscape.
There’s some new competition taking your market share
Sometimes all it takes is a decent competitor to lose market share. If you find you are being beat out on price, offer, or product, often a clever retention expert can design programs to rescue those customers. They can also serve as a point of feedback from customers to your product team.
