What Can Beavers Teach Us About Customer Retention?

Last night, I was watching the repeat showing of Yellowstone, a truly fantastic documentary about

Yellowstone National Park in the US.  Watch it if you can; it’s brilliant.  Beavers are truly amazing creatures who build their own lakes using literally tons of wood that they chop down themselves.  But the piece that got me thinking was when the narrator said that the sound of trickling water acts as a trigger for the beaver to mend the damn with mud and to keep the lake still with no leaks.

So how does this relate to us in business?

Imagine that the lake is your customer base.  How watertight is it? Where are the leaks?

Many years ago, Tim joined a large chain of Fitness Clubs as a Board member and came home to report that the only figure where they were exceeding their target was in the number of customers who were canceling their membership.  Time and time again, he tried to get some funding to put into the process of retaining customers and time and time again he was told that “as long as there are more customers signing up each month than canceling, it is working well”. 

What rubbish.  It is absolutely elementary business knowledge to know that a new customer costs much more to get than to keep.  How much more could they have put on their bottom line if their investment stayed the same but was employed in a different way; that is to keeping their customers from leaving them.

We know other people whose business model is based on a high churn of customers. In our opinion, that is a highly risky strategy, short term focused rather than long term focused and lacking in any meaningful relationships.

Unfortunately, unlike beavers, people don’t have inbuilt triggers to tell us when to automatically plug the holes in our customer base.  So we need to pay attention.  The question is – pay attention to what?