I see customer retention as a key metric and focus for a customer experience group.  I vote for leaving churn behind as a measure and developing a measure that helps focus efforts on improving the behavior we want – retention. 

I think it becomes a more interesting and actionable discussion, when you have a metric (or metrics) that focus on customer retention.  There are also different views of retention, for example –  

• # of accounts retained
• # of products/services within an account retained
• retained value

I don’t know but a “focus on reducing churn” sounds less customer focused than a “focus on increasing customer value”.  Some have said it is more about semantics (which could be right) but even so, semantics matter.  I’ve heard many versions of this phrase (Tom Peters to  Deming) but essentially you do get what you measure or at least that what’s people will focus on, so I think getting the focus on customer retention does matter, in the end.  What do you think?  And which one does your company measure?

Let’s start with Customer Satisfaction vs. Customer Loyalty (including NPS) – what are you going to use it for? 

• Customer satisfaction is all about us – the company/product/service/employees – how did we do? 
• Customer loyalty is all about your customers and their behavior – what stories will they tell about you?  What will they say when someone asks them what they think about a company/product/service?

Picking one or the other (or using both) starts with knowing how you will use the data once you get it. 

• Customer satisfaction – great for repeatable events (like customer support or field service) that need a customer based metric on the scorecard and to drive repeatable excellence in the customer experience. 
• Customer loyalty – great for determining what stories customer’s are telling about you.  Good at showing (or even predicting) customer lifetime value.  Excellent source of customer feedback for product or brand improvement suggestions.

Once you’ve decided how you want customer feedback to apply to your business, it becomes easier to answer questions like “how often do I ask?” and “what method do I use to get the customer’s feedback?” or even “at what level do I ask the question (brand/product/service)?”  **We’ll get to these questions in my next post in this series.**

I’m big on actionable information.  I like to know what business questions customer feedback will answer or what business problems customer feedback will resolve.  It helps me find the right focus for applying customer metrics.  My program team is service oriented – we are here to help our business partners across the company and improve the customer experience at the same time.  This is important because it is feedback from the customers and my business partners that help fuel how I design a program.

These are my thoughts.  What do you think?  Share your experience with me.

Measuring retention instead of churn shouldn’t be anymore difficult, as metrics go.  It should be designed to fit how you sell in your marketplace and around customer behavior.  I like how retention metrics focus on the positive and language turns into more customer focused intentions rather than preventative measures.  I like how retention can be proactive (“What can we do to be even better? How would you like to see us improve?”) and gets you out of being strictly reactive (“Oh, you want to leave?  Can we do something to keep you now?”)  Being focused on keeping the customer once they have decided to leave feels like “too little, too late”.  At that point, I am often more insulted than interested in taking any offer to stay.  Why wasn’t I valuable enough to you for this discounted offer before I decided to leave you?

So I vote that it’s time to leave behind the churn metrics and move forward into retention metrics.  Let’s show our customers we care about them now, while they are still with us on that customer experience ride.  What do you say?