Relying on a Canary in the Coal Mine Customer Retention Plan?

The canary in the coal mine customer retention strategy is one, lame, post-sale way of caring for customers. Yet, this strategy is alive and well in organizations of all sizes.

In the not-so-distant past, coal miners carried a cage of live canaries into the mine each day. If a bird died, their demise indicated a buildup of dangerous levels of methane or carbon dioxide which, eventually, would become toxic for humans. The canary in the coal mine strategy served as an early-warning, mining safety process. Sometimes it worked. Other times, when miners did not pay attention, it did not.

With a canary in the coal mine customer retention strategy, you only discover customers are lost after the fact: once you finally pay attention to them.

In most cases, the first indication of customer loss is financial. You notice your numbers are down for two successive quarters. Yet, the news comes as a surprise, because everyone assumes all is going well. In addition, no one has any idea why these customers left.

Also, the team finds out this news at quarterly meetings. Only then is an action item created: observe and report back the following quarter. By the third quarter, more customers (aka canaries) are lost from the customer retention bird cage.

Then, the reactive finger-pointing and excuse-making commences. Here are two common customer retention canary scenarios my clients have told me about.

1. Well, a few former customers did, in fact, complain to their sales reps over a number of months. The reps tried to contact engineering, but their issue was not deemed a top priority, so it was shelved until the following quarter. The reps, over time, decided it took too much time to resolve client issues when protocol and processes were followed. As a result, the reps created their own “process:” handling the situation themselves with various, quick fixes. In addition, the reps did not report these client incidents, internally.
2. Alternatively, the customer called in-house to gain resolution. They followed phone system voice prompts and left messages in various voice mailboxes, hoping someone would call them back. However, their voicemails were neither acknowledged nor returned. Why? Because employees felt someone else was accountable and responsible. And no employee compared notes with any other employee.

After all is said and done, the customer defects. And you still have no idea why.

When canaries die in the coal mine, more is involved than toxic gas. The same holds true for lost customers.

When customers move on, their departure is multi-factorial. Like toxic gas, a build-up of small, seemingly insignificant, negative customer experiences add up, over time. Without proactive due-diligence, small factors snowball, and negatively impact that customer’s success.

Long story short, the customer perceives they have been abandoned, post-sale.

Why rely on defecting customers to be your signal for faulty pre- and post-sale business and operational processes? What kind of viable, and sustainable, business growth and expansion strategy is that?

Are you in a potentially explosive situation when it comes to preserving your canary in the coal mine customer retention strategy?

Now, when real-life canaries keep dying in the coal mine, the coal mining company has a choice to stop doing the same things the same way. Either they keep the miners going down the same route. Or, they explore alternative pathways and new methods of structurally reinforcing the mine.

You, too, have a choice in creating and implementing a solid, pro-active customer retention strategy, rather than a reactive one. Alternatively, you can carry on doing the same things the same way, hoping things will pick up in subsequent quarters. Except they never quite do, and you continue to lose formerly-loyal customers.

Are you going to carry more customer canaries into the customer retention coal mine tomorrow? Or will you finally decide to change things up and move forward from this customer retention conundrum? Time to take the next steps?

Babette Ten Haken serves organizations as a corporate catalyst and innovative speaker, strategist, coach and storyteller. Babette’s One Millimeter Mindset™ Workshops and Speaking programs leverage collaboration to catalyze professional innovation, workforce engagement and customer retention, especially in challenging Industrial Internet of Things environments. . Babette’s playbook of IIoT team collaboration hacks, Do YOU Mean Business? is available on Amazon. She is a member of the National Speakers Association.

Image author: Hermansyah  Image source: Fotolia