Have you ever seen what happens when someone’s car lease is about to expire? They get flooded with marketing materials, ads, and financing opportunities -- and it starts roughly 90 days before their lease actually ends. Why does that happen?
Because leases are just as much about customer retention as they are about acquisition.
The invention of leases gave car brands a fixed end date on product lifecycles, in an industry that previously had no clue as to when their customers would repurchase... could’ve been 2 years, could’ve been 20 years. Once the brands knew Jane Q had to get another car 36 months from now, it opened up a massive opportunity in marketing automation, and a competitive advantage in leapfrogging the purchase decision window altogether -- because of course, only the brand who sold Jane Q her lease knew when she’d be purchasing next.
This is the magic of a fixed product lifecycle. It’s like a time machine for purchase insights, and you can plan so much of your customer relationship around it.
Car brands even have tactics to roll you into a new lease at some point before those last 90 days are up, because every day they let you sit in your purchase decision window builds up more and more competition for them, which threatens both margins and churn.
None of you reading this are selling cars, but the parallels to maximizing customer retention and profitability should be obvious. If you’re a consumables brand with a predictable product lifecycle -- makeup, coffee, snacks… heck, maybe even underwear -- do you have a retention strategy built around product lifecycle?
“But my product doesn’t have a fixed lifecycle!” No problem. Consider the spirit, rather than the letter, of the car lease example:
- Churn. You use research to predict a churn date in your customer relationship
- Window. You use research to estimate a customer’s purchase decision window (in days)
- You subtract the Decision Window’s # of days from the Churn Date to estimate the expiration date for your retention advantage
Churn Date - Decision Window = Retention Advantage Window.
Everything you do to nurture your customer relationship prior to the Decision Window is your retention advantage, and the further you slip into the Decision Window, the more your advantage deteriorates. But: there’s obviously a timing element here. Focusing on re-purchase too early will tank your upsell & expansion opportunity... and more importantly, rub your customer the wrong way while they’re still in a stress-free state of product satisfaction.
Sounds like a job for questions and zero-party data, right? Right!
While you’ve probably got some in-house insights to simulate the aforementioned fixed lifecycle (churn patterns, avg. time to repurchase, maybe Shopify’s nebulous Repeat Customer Rate), nailing that timing component is definitely not a one-size fits all pursuit. Instead -- or, in addition -- we’ll echo our constant recommendation that you talk to your customers. Here are a few angles:
Have you been considering your next Widget?
- No way, still loving mine!
- I’ve thought about it, but not quite ready yet
- Yep, I’m currently looking into it
What best describes the current state of your Widget?
- Tip-top shape, very happy with it
- Could maybe use an upgrade/repair/replacement
- I’m ready to move on
We’re trying to better understand our product lifecycle. Would you mind telling us if you have a timeframe in mind for buying a new Widget?
- Haven’t thought about it; still happy with my purchase
- Maybe some point in the next 6-12 months
- I’m fairly sure I’ll buy in the next few months
- I’m actively considering a new purchase now
These and other questions offer opportunities to pursue your relationship advantage from any number of angles. For instance, notice the clear overlap with customer service here -- if you haven’t checked in on your users about their satisfaction recently, you might be surprised to learn that they’re nearing the end of their product lifecycle. That’d be evidence for shortening your estimated lifecycle, and improving your retention experience so that ultimately, the CX team can be the ones to inform Marketing that a customer is approaching a decision window.
The nuance of what, when, and how you talk to your customers is a challenge we’re here to help with. Check our support docs for best practices, or subscribe to our podcast, Question Authority, for some easy listening on the subject.
This article is part of our Question Of The Day (QOTD) series, where Fairing teams up with the industry’s smartest qualitative marketers to deliver best practices and unique perspectives in the art & science of questions. Are you a question authority? If so, our customers would love to hear from you.