Want to retain customers? Asking them questions is a good start
It has been known for some time now that the 'physics' of customer loyalty has an uncertainty principle - the act of measurement changes the event you are trying to measure. The good news in relationship marketing is that the changes our measurement efforts cause in our customers... are generally positive. Since the 1920's experiments in the Hawthorne Works, we have known that the "Hawthorne effect" is a form of reactivity whereby subjects improve an aspect of their behavior being experimentally measured simply in response to the fact that they are being studied..." More recently (2002) a study reported in HBR by Dholakia and Morwitz "How Surveys Influence Customers" looked at the impact a short survey had on a test group of customers in a financial services company, "... A year after the survey was conducted, the customers we surveyed were more than three times as likely to have opened new accounts, were less than half as likely to have defected, and were more profitable than the customers who hadn’t been surveyed. These differences reached their maximum levels several months after the survey was done and persisted throughout the year. Even at the end of the year, surveyed customers continued to open new accounts at a faster rate and defect at a slower rate than the people in the control group." Amazing and a little mysterious. But it does highlight why it is so important to ask and listen to your customers. Even better if you confirm to them that you have heard what they told you and are doing something about it. I believe that survey fatigue destroys this effect over time if you do not clearly demonstrate the implementation of some customer requests. In the management of online communities this sometimes requires a conversation plan as this is too important to leave to chance. Our colleague; Community Girl recently blogged on her '10 Tips for Engaging Your Community'. Amongst the tactical tips are the plan components needed to take advantage of customer's positive view of brands that ask and listen;
- Listen - sometimes proactively through surveys
- Respond
- Follow up
- etc...
Lessons and approaches that work on and off-line if you are sincere and actually follow through. Before you start on a customer retention strategy that includes regular customer consultation in this way, pause. When you sincerely ask customers what they want from you, they will rarely ask for things that Marketing alone can give. They do not ask you to use less comic sans in your advertising. They ask you to change products, prices, services. Make sure your colleagues in product management, pricing, logistics, customer service... are as committed to listening and answering as you are.

