What is the Abandonment Gap, & why is it important?
We define it as the time between the first conversion and signup until the customer becomes an active and heavy user. Bear in mind, the user’s journey is a long one.
Here’s the breakdown: A potential customer comes across your product online and still needs convincing to buy-in. An excellent product, along with top-notch marketing, helps convert that user into a paying customer. But that’s not the end of the journey. A business must continue to build the relationship and grow loyalty until the user becomes a repeat customer or power user. This is referred to as customer retention.
If the user experiences confusion, frustration, or boredom when using a product, their risk of falling into the Abandonment Gap skyrockets. Unfortunately, most businesses aren’t aware of this issue or what the solution is. This ends up costing a lot of money in the long run.
Did you know, the Harvard Business School proves that most SaaS products and businesses lose roughly 20% of their customers and recurring revenue because of the Abandonment Gap? With the right knowledge and skills, any business can increase customer retention and brand loyalty.
Most companies find themselves in a position where two primary teams are involved with creating and rolling out a digital product successfully:
While every organization is different, a product team is generally responsible for the product blueprint, which involves planning, building, and strategizing.
Effective marketing should develop awareness and drive user interest, so potential customers understand how the product solves a problem and why they need it.
It’s essential to bridge the gap between these business teams to prevent new customers from getting lost between the two.
This brings us to the vast expanse known as the Abandonment Gap. In-between the product and marketing teams’ responsibilities, there are many steps for the user to complete before they’re hooked with your product and ultimately convert to a power user. A company can shrink its Abandonment Gap and improve customer retention by updating its approach to these four processes:
1. Signup & Onboarding
Before someone can use your product, they need to share certain information to enlist with your company. This signup process is critical and should be relatively frictionless, only asking for the minimal amount of information necessary.
2. Product Tours & Tutorials
Once a customer buys a product, they need to learn how to use it. With intuitive product walkthroughs and easy-to-understand educational materials, a business can shorten a new user’s learning curve and boost customer satisfaction.
3. Knowledge Base/Self-service
Basically, this is the customer service component for a product. Users feel empowered when they have a dedicated support system to answer questions in real-time and are given the tools to troubleshoot.
4. Product Updates
'I love change!' ...said no one ever. So while change is vital to any product’s survival, open communication lines allow a business to build trust with users. It’s crucial to share the timing of updates and offer resources to educate the customer about new and rejuvenated features.
Look at these four processes as the legs of a stool. Together, they allow the stool to stand upright. Take away any leg, and the stool topples over.
If you take away any of these components supporting customer retention, the stool upon which a customer sits will fall over and disappear into the Abandonment Gap, taking the customer along with it.
We know this is not an easy problem to solve, and it falls on the shoulders of many teams, but this is our specialty. We work as an extension of your team to test, analyze, research, and finally shrink your Abandonment Gap. Then you enjoy the rewards of a customer relationship platform that works for you.