Empathy In Business Goes A Long Way

Last month, we did a flash sale at Rugby Bricks. We had 796 orders in four days.

The app we used didn’t quite work how it should have, and we ran out of stock at the same time, so nearly 80+ orders remained unfulfilled for almost three weeks.

Here is an example of one of the many complaints we got:

Our customer support team was trying to buy us time as our fulfilment company had to sort out the orders.

The issue is that people got sick of it, and rightly so.

To solve this, I emailed or called our customers, told them exactly what had happened, refunded them, and gave them my number.

Here is the reply I got.

99% of people responded this way after I spoke to them.

People want to be heard, and we need to remember that in business, sometimes the slowest method is the best one.

This tactic isn’t scalable, but it is important.

Notes: We could have solved this issue by simply planning our sales better. Wise people don't solve problems. They prevent them.

P.S. If you were one of the customers to who this happened, thank you for understanding and supporting the business.

We’re learning and improving each week but your support means the world.

Finding Hidden Costs

My hunch is that, because there's no explicit cost to losing a customer—they just don't return. We don't really see losing customers as a cost.

Of course the obvious exception is subscription businesses - where you do immediately lose revenue. But even then, I know more than a few who care far more about getting new customers than losing current ones.

It makes sense; those "new customer alert" emails hit the dopamine receptors right where it feels good. Where-as returning customers are behaving as expected, aren't they? And nothing is less exciting than has met expectations.

The thing is, though, if you look around, the elite businesses in any industry have the highest retention rates.

Good businesses know how to get customers; great businesses know how to keep them.

So what if we completely flipped the script and spent as much horsepower on trying to keep customers as we do on getting new ones? I've always known my business would be in much better shape for it, but I'm only finally starting to act on it.

At compound gym, we've been looking closer at what we're doing to keep customers and where we're losing them.

We’ve taken the same approach to our onboarding process as Mr Beast does with his YouTube channel. He obsesses over viewer retention and where people drop off his videos.

When we started, 40% of our cancellations in any given period were by members within the first 90 days of their membership. After a bunch of tweaks, we've managed to reduce that ninety-day drop-off to 20%. Our retention rate has responded, too, increasing dramatically.

We’ve found the main thing is to have an onboarding process in place and then experiment with it to increase the percentage of new customers who reach each onboarding milestone.

For us, the significant milestone for new members is a 28-day training check-in and progress assessment. The more often people make it to that point, the more members stay with us long-term.

The cost of making these changes has been nearly zero. In fact, we've found ways to simplify our onboarding process, making it cheaper while making it more effective.

An onboarding process can look expensive, but the real cost is not having one.

Lost customers don't show on a PnL like advertising & marketing expenses do. But for most of us, the former line item would far exceed the latter.