TSOE Excerpt - In Search of Relationship Value
This topic was inspired by Fender, founded in 1946: It discovered that 90% of new guitar players quit within 3-6 months, many within 30 days. Those who stick with it for one year become a customer for life.
So it created the Fender Play app, a digital library of over 3,000 online video lessons on how to play the guitar. It attracted around 130,000 subscribers within 3 years, with a 95% retention rate.Subscribers spent 40% more on Fender products.
During COVID Fender offered a free trial to Fender Play, and attracted 1 million subscribers within several months. We can learn three lessons, according to Tien Tzuo’s newsletter:
Practicing experimentation makes perfect—It’s OK to admit you don’t know what you don’t know. “You find holes by falling into them. Then you fill them and you never do that again.” Constantly tinker with pricing and packaging.
Stay in tune with the customer: understanding the qualitative human elements of the customer experience
Listen to the analytics: retention is important, but so are harder-to-quantify metrics like engagement. People are messy and complicated