About the Biz

Retention starts with Why

Create and Keep

We now have a couple of groups that have passed the one month period of using their scorecards.  With our current sample size, 86% of our participants have stuck with the experiment after five weeks.  This data is certainly skewed because some of the retention is clearly because of personal relationships with the participants.  This data will become much more relevant when we move to our open beta and those relationships are not as close.  Looking at how people are using our framework, it is critical to think through why some people are sticking with it and some aren’t.

How do we understand more about retention?  When you are trying to start a movement or launch a product there are always two sides of the movement momentum coin.  The first is generating excitement to get people to join up.  When launching product this excitement generation can be economically quantified into the metric customer acquisition cost or CAC.  CFOs spend a large majority of their time calculating this metric and even more time talking about it to anyone who will listen.  And it is important.  If your CAC is not a small fraction of your customer lifetime value, your long term biz prospects are going to be grim.  This is one of the reasons why business execs won’t shut up about their CACs.

The other side of the coin is customer retention.  In my experience, far too little time is spent on retention.  Peter Drucker once said, “The purpose of business is to create and keep a customer.”  We spend a ton of time on the first part but rarely do we spend enough on the second.  When we talk about retention, product quality and customer service are the first two obvious factors.  If either of these suck, the good news is that you will have plenty of time on your hands to watch your customers floating over to a better option.  Quality product and customer service are a bare minimum, you’re not even in the conversation without them.  Those two factors alone don’t start a movement.

The power of why

Movements are started by taking a stand.  Wanting to help people is not enough.  No matter how well intentioned that goal is, almost all products and movements claim they want to help people.  You gotta know why.  Let’s look at a couple of fairly recent examples.  The first is the open source movement.  The stance behind the open source movement is that fundamental knowledge and technology should be free to the world.  A group of engineers and academics got together and built huge libraries of work on their own time because they felt that proprietary software was unethical and unjust.  Another example is net neutrality.  Net neutrality believes that all data on the Internet must be treated the same.  Internet service providers cannot discriminate or charge different types of data differently.  Both of these movements have completely changed how technology is developed and consumed by our world.

There are tons of examples of movements started by companies as well.  None of that happens without the why.  The why is what allows people to connect emotionally with the movement.  If you think about Apple, they have always been the computing company that is bringing the power back to the masses.  This is obvious in looking at their original Super Bowl ad that mimicked ‘1984’.  Apple users are the righteous outsiders, the creative, the free spirits, the cool ones.  People love to identify with that.  Nike is another good example.  ‘Just do it’ has been inspiring athletes for years.  A huge part of that identity is aspirational, when we think of these brands we think of a better version of ourselves.  This keeps people coming back.

What is our why?

What is our why?  Let’s start with a theory.  Our capitalist society has created a culture of victimhood.  Why?  Because victims are susceptible to marketing.  Being susceptible to marketing means that you are going to buy more.  We’ve trained folks that all the answers to your problems can be found by spending money.  Not by doing.  By buying.  It is insanely unethical that we allow pharmaceutical companies to advertise their drugs directly to consumers.  The drug pushers list a host of generic symptoms that 80% of the populace can identify with, then convince themselves they have.  This creates more victims.  The drug companies then tell them to ‘ask their doctor’ which creates a crazy burden on healthcare professionals who should be prescribing based on their diagnoses not by some unethical outside marketing effort.  That’s madness.

As another example, take academia.  Political correctness, while a noble idea at first, has gone completely off the rails.  Academia has created ‘safe spaces’ where students will never be exposed to ideas that threaten their delicate sensibilities.  They’re treating our students like victims.  You don’t grow as a person when you’re not allowed to leave the echo chamber.  The right has Fox News, the left has liberal academia.  The only way we are ever going to get back to a world of civil discourse is if both sides listen to what each has to say with some iota of empathy and humility.  These academic crooks that are creating victims by creating ‘safe spaces’ are also creating victims by continuing to raise tuitions to astronomical levels while hiding their money in off-shore accounts.  These scumbags are not too far from Trump University when it comes to contempt for their students.  Yet 90% of our children grin and bear it because of the nature of victims to accept the status quo.

Finally, let’s talk about Facebook.  Facebook is the echo chamber.  They make almost all of their money on marketing, so they want you as defenseless as possible.  Look how easy it was for Russia to manipulate the US election.  That doesn’t happen when people’s guards are up.  Facebook has lowered our discourse to the lowest common denominator.  There’s plenty of humor on Facebook but very little substance.  Very rarely do you see big ideas on social media.  Your status on Facebook is directly proportional to how curated your conversational style is.  If you see someone saying something that you don’t agree with, do you engage them and try to understand?  No, you either violently spit out your counter talking points or you unfriend them.  Almost all major innovation and breakthroughs come from passionate disagreement, not from apathetic echo chambers.  To grow we need to challenge and be challenged.  We need to feel uncomfortable.  Facebook is the opposite of that.

Here’s our why: we want to destroy the victimhood of America and the Western world.  This is not an easy message.  Being a victim means that you can give up responsibility for your current situation.  That’s a hard safety net to get rid of.  Dropping the victim mindset starts with acknowledging that you are where you are today because of the choices that you made and for no other reason.

There are a ton of other factors that contribute to retention.  We may cover more of these in a future post.  But if you’re trying to start a movement, it has to start with why.

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