I came across this as a post in LinkedIn a few weeks ago, and I thought it was so good, that I copied it and posted it here!
It’s from Sir Richard Harpin, who founded and built Homeserve, which he then sold for over £4bn…
So this really is from someone who knows his stuff!
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A topic which came up in a founder group this week.
Whether you are starting up or established, each business aims for customer retention.
9/10 executives believe their customers are becoming more loyal. Only 4/10 customers agree.
That gap comes straight from PwC’s 2025 Customer Experience Survey. It’s where businesses bleed revenue.
At HomeServe, our whole model was built on keeping customers for at least 5 years.
Here’s the playbook:
- Get them on a membership.
A subscription changes the relationship from transaction to commitment. McKinsey found members of paid loyalty programmes are 60% more likely to increase their spend with a brand. Free programmes manage half that, and work hardest in year one. Half of all membership cancellations happen in the first 12 months.
- Make the product brilliant. Then prove it.
Outstanding satisfaction is a number. Measure it relentlessly so you know exactly what customers think, not what you hope they think. PwC found 32% of people will walk away from a brand they love after one bad experience.
- When something goes wrong, fix it fast.
Speed of recovery matters more than the mistake itself. A problem solved brilliantly can create more loyalty than no problem at all.
- Keep enhancing and evolving the product.
Loyalty is rented, never owned. Every renewal is a fresh decision. The product someone buys in year one should never be the product they hold in year ten. Your competitors improve every year.
- Introduce customers to your other products.
A customer with two products is far stickier than a customer with one. At HomeServe, someone might start with plumbing cover. Then add electrics or boiler cover. Each product made the next easier to sell and the relationship harder to break. That’s why banks fight so hard for that second account.
- Give them something extra.
A tale as old as time: Wiggle put free Haribo sweets in every parcel. Cereal brands used to put toys in the box. And now, Huel has sent every new customer a free t-shirt since 2015. You now see them in every gym. A freebie became free advertising. People who feel they got a good deal come back.
- When someone leaves, find out why. Then act on it.
Every cancellation is free market research. Ask the question, log the answer, look for the pattern. If the reason is affordability, the customer hasn’t rejected your product. They’ve rejected your payment structure. Offer another route. A cheaper tier or a pause instead of cancellation. Monthly payments through Klarna have made this simple. Don’t lose a ten-year customer over a problem you could have solved.
Research shows a 5% point improvement in retention can lift profits by anywhere from 25% to 50%.
