Subscription-based businesses seem to be the most resilient during this time of crisis. With predictable recurring revenue, they have greater flexibility to withstand the storm. But there’s more to it than just revenue. To hang onto customers during a crisis, you need to build a forever transaction with the people you serve.
Around the world, everyone is adjusting to their own personal “new normal.” They’re sheltering in place. They’re worried about the elderly and immunocompromised in their community. Their kids are distance learning and not going to school or childcare. Most people, except those on the front lines and in essential businesses, are working from home. And many of those who own or run businesses are trying to hang onto their customers when seemingly all forces are working against them.
Smart marketers know they can kill their brand if they screw this up.
Your team has to know what your ‘forever promise’ is the organization’s commitment to customers that justifies customer loyalty. If you don’t have a forever promise, you’re sunk.
I have observed companies panicking and doing anything they can to manage short-term cash and destroying hard-earned relationships at lightning speed.
Companies are making bad decisions for a good reason. They are letting short-term financial objectives become the North Star in an effort to keep the lights on. But when the dust settles, they will have lost the trust that makes customer loyalty possible. And, they will have lost the trust of the employees they’ve counted on for years to serve those customers with grace, passion, and perseverance.
Customers will remember which hotels and theaters offered a refund on unusable reservations, which newspapers dropped their paywall and provided free content, and which gyms quickly mobilized to send out daily video fitness classes. They will also remember the companies that took advantage of the crisis by gouging on price. Or those that laid-off employees with little to no notice, leaving these formerly loyal workers to fend for themselves when their rents and mortgage payments came due.
In times of crisis, relationships become much more volatile—people can quickly move from love to hate with a company that lets them down. In these times, customers are quicker to connect, let their guards down, and trust. But these same customers are also quicker to end their relationship forever with a company that violates their trust. Reputations that took years to build can be destroyed in two weeks. Relationships that used to take years to unravel can unravel in days.
On the other hand, companies that have a long-term focus and take good care of their customers and employees during a crisis win lasting loyalty. This phenomenon is especially powerful for subscription businesses and any business—subscription or not—that has a true “membership mindset.”
Companies with a membership mindset do everything they do with the objective of creating long-term value for each and every customer. Their businesses are not comprised of anonymous transactions, and their customers are not just an account number or the next person in line. Every customer is a special person, with special needs, who is a pleasure to serve.
Those that have predictable recurring revenue streams are better positioned to survive the crisis. Products and services people subscribe to are used by customers on an ongoing basis, which means that they’re habits—so customers are less likely to stop. Also, it takes more energy to proactively make a decision to buy than to make a decision to stop paying for something that has already been decided.
Any organization can pivot to this approach, often very quickly, to build relationships that will last for the long-term.
In this crazy time, some businesses have seen a massive spike in demand. Video communications, headset manufacturers, content creators, delivery services, and manufacturers of cleaning supplies, face masks, and toilet paper are inundated with the new demand. For these organizations, the question is how to turn this spike into an ongoing relationship. Hint: It’s not by price-gouging…it’s by onboarding these new members to stay for the long-term.
My new book was designed to help organizations of any size and in any industry build forever transactions with the people they serve. I wrote it thinking about how organizations could strengthen their relationships with customers and withstand hard times. I walk readers step-by-step through the process of building relationships that will last forever. Little did I realize that my book would be released the very same month as a once-in-a-lifetime crisis—the COVID-19 pandemic and financial meltdown that we are experiencing now.
The book provides some useful guidance that every company should heed during this time of crisis. For example, Chapter 4, “Define Your Forever Promise,” walks organizations through the process of defining their North Star—the promise they make to customers that drives everything they do, think, say, and invest in. In normal times, companies might spend a month or more honing this promise (after all, it’s important!). In today’s crisis, however, companies that will survive and thrive are accelerating every decision.
Many organizations lack a forever promise or have lost sight of that promise, due to the pressure they face right now. That can be risky. Chapter 14 of Baxter’s book, “Forever is a Long Time; Don’t Take Shortcuts,” provides vivid examples of organizations that destroy trust by trying to hit short-term financial targets. Organizations need to be disciplined about taking a long-term approach and not taking shortcuts.
Executives are taking shortcuts right now, many of which are well-intentioned and designed to protect their company, but this myopia may prove fatal.
Six Things You Can Do Right Now to Build and Maintain Strong Customer Relationships During This Crisis:
- (Re)focus on your forever promise. Consider the bigger promise you’re making to your best customers. What problem are you going to solve for them, or what goal are you going to help them achieve, forever? Step back from your products and services and just think about the situation the customer faces and how you can help them to succeed in meeting their objectives.
- Determine who your best members are and, more importantly, who they aren’t. Be very specific about who you serve and why.
- Expand “customer success” beyond your support teams. It’s all hands on deck right now. Everyone in the business should be working together to make sure that customer needs are met and communications with customers are clear.
- Consider including one or more members of your frontline team in the brainstorming discussion. These individuals have a much clearer line of sight to the customer and the problems those customers face.
- Find a way to have the customer “in all rooms” where decisions are being made, both in structured and unstructured meetings. You want to feel as if your customers are watching you, eager to see how you are leading, and hoping you’re worthy of their trust. Amazon leaves an “empty seat for the customer” in meetings to ensure customer-aware decisions.
- Identify the biggest challenges that are preventing your best customers from achieving that goal you promised to help them with. And determine if this crisis requires a different, short-term approach to take better care of current and future members, right now.
Reblogged this on PaperChain Blog.