Unlocking Long-Term Growth Through Customer Retention

Nothing I do or have done has ever come without deep thought, research, and applied knowledge often beyond the boundaries of where most people see connections. As someone who has studied both arts, philosophy (East & West), and psychology alongside working within marketing, business and sales I have directly danced with the interconnected elements influencing consumer behaviour and the human desire for a heroic autonomous narrative that together often cause fascinating outcomes in business.

With a combination of unique experiences, extensive theoretical research, and practical application, I have developed a keen understanding of the intricate details that most people in business tend to overlook. My desire to answer some of the most challenging questions has kept me up many nights, and through this, I have been able to partially uncover the true magic behind what creates a successful brand.

A big component of this process involves utilising creative pieces of art that are informed by psychological research, individual and societal desires, as well as business trends and behavioural data. By marketing these elements correctly, they play an instrumental role in telling a story and building the magic that people associate with a brand allowing the opportunity for long-term retention strategies to be put in place.

In pursuit of growth and status most businesses have become so glued to old transactional models that primarily pursue the attainment of new customers whilst actively neglecting the most fundamental instrument in influencing brand growth and achieving business success… a compelling story that necessitates continued business and referrals. A brand/business loses its soul the moment it focuses on the pursuit of greater profit via the volume of new sales rather than the story it tells and the value it provides. I have often described the process as the action of pouring water into a bucket with holes in as fast as we possibly can, and when something such as covid happens and the water stops pouring the bucket empties. However, it is by having a comprehensive story that underlies every single aspect of the business that adds a second and a third bucket with fewer holes over the first.

I was once told in the industry in which I once worked that “gyms are like revolving doors, they are one person in (sale), and one person out (leaver)” and that is just the way it is. This instantly made me realise that if we fix this then we remove the business's biggest obstruction preventing sustainable growth. I understood if I worked obsessively on the premise that if we could get two people (confirmed sales) to walk in and only ever have one leave then the business has no choice but to grow and we conceptually fixed the business's and industry's biggest problem… long-term sustainable growth.

Customer Retention is nothing new and it is most often recognised as a key indicator of customer satisfaction and ultimately a representation and predictor of business success worldwide. However, in more recent times, within a capitalist culture and immediately following the finical impact of covid most businesses, especially small businesses, fell into a desperate need to generate immediate short-term income over long-term results, those that are produced by building deeper relations to and with those consumers which the business ultimately and originally served.

Therefore, within the immediate post covid landscape, many customer interactions were reduced to extremely transactional events where the key indicator of success was sales results, metrics, numbers, and analytics indicating if the business was growing and getting back on track. However, in trying to quickly get our businesses back to being successful/lucrative we stopped viewing both our new and retained customers as individuals who have an independent relationship and journey with our business and brand story. Therefore, although we were running at full speed trying with all our might to get more sales we never stopped to realise that in reality, the consumer landscape had changed we old sales tactics weren't working the same as before and we failed to realise in pursuit of growth we had unknowingly moved away from what had originally attracted our most loyal customers and what made our business a success prior to covid… our brand story.

There are thousands of books produced every year on sales and virtually none on retention. Furthermore, work performance is often reviewed on sales numbers rather than the customers retained due to its level of abstractness. This form of business actually makes sense biologically as a new big sale often produces elevated levels of dopamine compared to maintaining a 100 now old and boring relationship. For example, we review a car salesman based on his monthly sales and not on his success in building long-term relationships and the number of sales to returning and retained customers. Even in our advertising and marketing efforts we primarily focus the majority of our spending on the initial pull of attracting new customers and pushing them down our sales funnel and through the door of our brick-and-mortar stores. It is very rare that once this transaction has been made we simply pay no mind to what was within the initial pull that is now keeping people inside and constantly coming back for more.

It was this simple idea that made me question when we were going to realise that our bread and butter money that was coming from those who love us, and the only reason they currently continue to consume is because of the value of our product and the story we originally attracted them with. I began to question how quickly these people will leave if we only focus on who is coming in and neglecting the importance of the income that comes from the LTV of our loyal customers, because no matter what we wish to believe business growth will always have an endpoint where we are forced to plateau.

Even if we have a monopoly in a chosen industry there is a limited number of people on this planet who can and will consume our products and service so even after 7 billion subscriptions/sales following our current models we will eventually reach a plateau of success and growth. Furthermore, if we compare our success to the number of new sales compared to a competitor we care about their market share but neglect the reason why that number of people have chosen to maintain their consumption of our competitor's products and story. There will also always be another new competitor that threatens to provide a more convenient product with a more compelling story and if your service or product is only consumed based on the price you are already playing a losing game.

So if primarily pursuing business success via the volume of sales is fundamentally just pouring water into a bucket with holes in it then this is why I suggest we must all learn to define `"what is enough". By this, I mean what is the number of new sales we can actively maintain that sustains our outgoings so that we can transition towards learning to pour water at both a slow and steady rate into our buckets. By doing this we have the time to identify and add further buckets with fewer holes providing us with the ability to manoeuvre and adapt and find a way to keep those who love us consuming and actively advocating for others to join us alongside the actions of our own pulling marketing activities.

The reason I promote this idea is that if we do our jobs well and we return to the importance of our brand story, improving our service and building the long-term relationship we already have then we not only reduce our attrition rates but increase our customer LTV. By doing this we subsequently produce more advocates that bring in more consumers/referrals to join the community we have created by following the same journey better than we can ever market through advertisements ourselves.

In my professional experience, I found that the allure of the results of regular sales and promotions are actually smoke and mirrors because they are “cheap” manipulation that devalues far more than your product and your current consumers. To follow this method you are continually drinking seawater, obsessed by the sales number but neglecting the number of leavers and the decreasing LTV of your customer base, for if you only incentivise new people to join on price then they will also leave for the exact same reason.

Therefore, to keep the old consumers and attract the new businesses have to change at the fundamental level. This is what in today's world businesses need a WHY that informs all of its operational actions from telling an authentic story to its customers that ultimately builds a community that sustains itself upon the customer's continued justification of the value that the product provides and the sense of meaning being a part of the group creates.

I am not basing this blog on anecdotal opinions or a fanciful whim I am basing it entirely on my professional experience that was based upon thousands of hours of theoretical research within neuro, evolutionary, depth, clinical, psychology, Eastern and Western philosophy, and my application of these schools of thought to marketing, sales and business. But the best way to lead you to what I have come to understand is through telling you a story. My story and that is where we shall venture next...