Digital Thoughts – Acquisition and Retention

Sometimes, certain acts in the “real” world unfold in a way that lead a person in our line of work to wonder how those same events would have transpired were the equivalent levels of measurability and accountability used to run our business also used by others. One such event occurred to me this past weekend, and outside of the stress relieving effect sharing with an audience has, I do think it makes for a fun change-of-pace case study for comparing our world with the world we inhabit.

The event to which I refer took place at my apartment complex. I went away for the weekend to the Coachella Valley music festival and upon my return my girlfriend alerted me to the fact that my car was no longer in the garage. It’s worth mentioning that at my apartment complex, parking is not assigned and there is for more advertisers (autos) than parking spaces (inventory). Los Angeles, where I live, has no lack of automobiles. Combine that with the fact that the next nearest parking garage available for residents requires two-and-a-half blocks of actual walking and that no real guest parking exists, and it makes sense that people tend to abuse the garage by sneaking in friends and second cars. The price of the garage only ads to the temptation for abuse – equaling if not exceeding the monthly rates in land-strapped Manhattan, atypical for those in the cement ocean which is LA.

To combat the abuse and overcrowding, the management of the complex decided to empower the security company responsible for manning the front desk off hours to tow more aggressively. Already, the smart readers see where this is going… not tough though considering you already know they towed my car. Garage holders must display their parking tag in the window or risk receiving a violation. After one violation, they can tow the car at their discretion. Having already snuck in a friend at the last minute, giving them my tag but receiving a warning the next day, I felt I had learned my lesson and would avoid trying to game the system.

I moved to this residence upon deciding to cancel my acceptance to law school and work in Los Angeles. (No, Hollywood had nothing to do with the decision.) Given the countless horror stories about LA traffic – all true I might add – I picked a place within walking distance of work. I came to LA to work; might as well work. In my performance distorted view of the world, that I live in a residence which bills itself as “Inspired Urban Living,” and given my new rent comes in at more than double what I paid when living in a 1200 square foot on the waterfront loft in Baltimore, I had certain expectations. True, the retro-modern design feels more like the Shining than the Ritz and its proximity to USC often has it feeling like an inspired dorm, but the walk and my being among this renovated buildings first tenants made it acceptable.

The building has thirteen floors and roughly 400 units. The parking garage holds no more than 100 cars. It took me about a week before I knew all of the cars in the garage, and spotting foreign cars and new cars is rather easy. The same it seems is true of certain people that worked there who also knew the cars. This I expect given that one of their tasks is to walk around the garage and check for tags. With that level of interaction one would expect them to be the experts on the cars and their tag displaying behavior. Likewise, one would expect that the building would keep a master list of cars and their status, updating the list to reflect changes.

Upon recognizing that my car was truly not in the garage, I called the security company to ask for information. They informed me that pictures of my car were taken showing no tag, so they towed. I asked whether they thought about calling me to inform me, or at least to check a parking log to see whether I belonged in the garage. I felt that were information available that showed I did have permission to park there and especially were it to show my lifetime value, they might have given me the benefit of the doubt. Towing costs money and causes negative brand association, especially in a situation where customer retention thoughts might have swayed that decision. The tow/no tow decision ultimately comes down to how one thinks. Do they operate in a black and white environment or do they think in shades of gray. It includes application of customer service and should include retention. In our space, we focus non-stop on customer acquisition and retention. If an email address can be worth more than a dollar, a new tenant must surely cost multiples more.

I don’t expect the security guard who called in the two to make these acquisition and retention decisions, just as we shouldn’t expect those with the least job complexity to direct strategy. At the same time, I would hope they might recognize a long term customer, a valuable lead and treat it differently. This I see as equivalent to anyone who answers inbound mail to potentially spot an anomaly and treat it not as the standard message or realize that chances are an FBI email address didn’t subscribe. Some might call it common sense, but that is a plus not a requirement for those jobs. What I would expect though is for the parent organization to put in place processes to assist with acquisition and retention policies. If you are in the lead business, this is what you do.

You want to keep current customers and allow for black and white decisions to include a shade of gray. If the customer fits your target profile and represents continuing revenue, develop processes to keep that revenue going. In my performance view of the world, new customers cost money, much more than retention processes. Lower turnover equals a reduced reliance on acquisition and resources to enhance the product. I wonder if they see things this way. They might assume plenty of other people will take over mitigating the need for both retention and acquisition. But we all know too well what happens when companies become complacent. Another will challenge their dominance.