Updated: Feb 28, 2020
Understanding your customers’ POV of your product complexity and its value to their operations informs your retention strategy
If you’re particularly high or low on product complexity/specialization or value to customer operations then use the best practices tables in the article as starting points
Scroll to the bottom for four (4) actions you can take right now to bolster your customer and revenue retention using the factors described in this article
There is no retention strategy that makes up for low product value.
Product drives everything. Support, Success, Sales, Marketing--we all talk about product all...the...time. To master customer and revenue retention you simply have to understand your product from the customer POV and build your strategy accordingly. Done!
It really is that simple. But while simple, using product knowledge to master retention isn’t necessarily “easy”. The most common pitfall is thinking of products and services from our internal POV or from the idealized POV of our public value statements. If you really want to leverage product knowledge to retain more customers and more revenue then you need to walk a mile in the customers’ shoes.
While you’re in those shoes--ask yourself two crucial questions and respond authentically from the customer POV. (1) how complex or specialized is the product, and (2) how impactful is the product on the customers’ outcomes?
Product is one of three areas--along with your Customers and your Team Expectations--that influence the ideal retention strategy for your unique organization. All three are outlined in 3 Areas that Inform Your Customer Retention Strategy As with all factors that influence retention strategy, the extremes are more important than the middle. Focus first on those where you’re particularly high or low.
This article details how product complexity/specialization and product impact can inform your ideal retention strategy and recommends best practices for multiple configurations. NOTE: If you offer services instead of products just go ahead and swap out the language. The findings and recommendations are generally consistent across product and service offerings.
How Does Product Complexity Influence Retention?
When I talk to people about product influencing the right retention strategy a popular question is why product type isn’t an important factor. It turns out that while product type (a CRM for home health workers, or complex project management solutions for building sites, or…) is important. It’s just not as important as complexity and impact. Or rather, product type is a general fact whereas the product complexity and impact are actionable. Customers don’t think much about your product category. The think about how easy it is to use and how important it is to their own success.
With this in mind, let’s talk complexity and specialization. Everything I’m about to say about complexity is also true for specialization. Return to that customer POV. It doesn’t matter if you view your product as plug-n-play. If customers find it complex--it is.
It doesn’t matter what you think of your product. If customers think it’s complex...it is.
Products and services on the more complex or specialized end of the scale tend to require a more collaborative, supportive, and subject-matter-expert (SME)-led experience. This starts at the point of sale and flows all the way through their lifecycle and into retention. Complexity and specialization also tend to change the equation on relationships--creating scenarios where multiple internal resources touch the customer in some way and multiple customer team members have visibility into the product. For example, a high-end cloud security product serving enterprise clients may require you to engage directly with a purchaser, the head of IT, a security lead, a CIO, and Legal. In turn, you likely need to align similarly skilled and specialized resources on your own end.
Here’s how product complexity and specialization inform best practices for retention.
Client Question: How do I decide if my product is complex?
Response: It may be easier to think of the opposite. Can you say for certain your product is easy to use fora general audience? If not, then you’re somewhere on the complexity scale
For a more refined answer consider the following indicators. Each suggests a more complex or specialized product.
Your product requires experience, expertise, or specialized training for customers to get maximum value
Your product was built by experts in your field, for experts in your field
Your product has more than two unique and separate value propositions
You find it challenging to get internal teams up to speed on all the product features and functions
How Does Your Product Impact Customer Outcomes?
This is a big question. Bigger than customer retention because this is the heart of “value” in the market. Every product or service has some impact otherwise there’d be no customers to retain. What we want is to understand the degree of impact and the customers’ perception of that impact. Is your product well-loved and appreciated but a nice-to-have? Is it mission-critical to customer operations? Somewhere in between? The answer impacts how we think about customer and revenue retention--and signals strategies that work at one end of the spectrum but not the other.
The Thesaurus Approach to Product Impact
If you need help assessing your organization on this factor then use what I call the “Thesaurus Approach”. Circle the words that best describe your product from the customers’ POV. Be careful to approximate their actual experience and not your aspirational customer experience. The column with the most circles is a good starting point.
The tone of the lists suggests you’ll have different tools at your disposal when trying to retain customers using a high-impact product compared to a low-impact product. We are looking at customer perception of impact so you will certainly see individual customer opinions across the spectrum. We want to build retention strategies to capture as many customers and/or as much revenue as possible. Think of your customer-base in its entirety when assessing your organization on product impact.
You have a good sense of product impact in the market. So, how does that influence retention strategy?
This table makes it seem there’s a great retention strategy for low impact products. But that’s misleading. While there are best practices to improve retention of low impact products, this isn’t the needle mover.
No retention strategy “rescues” a low impact product.
Retention teams have the pulse of the customer and are well-positioned to give Product teams the inputs they need to increase the utility, usability, and overall value of the product. Realistically, focus there first.
Do This Right Now
This is a lot to take in. So here are four quick ideas for using the information in this article to better align your retention strategy to your product complexity and value.
Run a Start/Stop/Continue (SSC) Exercise. Identify areas where you diverge from the best practices above and don’t have a great reason why. Then write a list of current retention activities and decide if you should Stop or Continue each one. Next, make a list of activities to Start that will create better alignment. This is your draft roadmap for change.
Compare Today and Tomorrow. Think ahead a year...or three. Your product and customer perception are always changing. What does this mean for your self-assessment? Use the best practices tables to identify current practices to change or new ones to begin.
Refine Your Answers. Of all the factors to consider for retention, the product factors are among the most challenging to self-assess. Work with your product, sales, and marketing colleagues and validate your assumptions. This shared understanding provides value well into the future.
Do Nothing. Seriously. Just be aware of the potential challenges of your retention setup and prepare to take action later when urgency and impact come together.
Product is one of three areas--along with Customers and Team Expectations--that should inform your success and retention strategy. The overview article is here [LINK] and the deep dives into each specific area are linked below under Related Reading.
If you want a more nuanced look at mastering retention for your specific situation check out the Retention Factors survey instrument and complimentary assessment on the infinipoint.com site.
Finally, share your story. Drop a comment below or reach out to me directly and share how you’re using product complexity and customer impact to improve retention. What other factors guide your decision-making?
See ALL 9 FACTORS that influence retention strategy
See how your CUSTOMERS influence your retention strategy
See how your TEAM EXPECTATIONS influence your retention strategy (coming soon!)