Why Manufacturers Must Prioritize Retention Before Growth, According to Jim Tincher, CCXP

In a recent LinkedIn post, Jim Tincher, CCXP, a recognized expert in customer experience, outlines a critical, often overlooked, two-phase strategy for manufacturers seeking sustainable growth. Tincher argues that many companies chase expansion without first shoring up their existing customer base, a fundamental flaw that dooms growth targets.

Tincher begins by highlighting a common misstep among manufacturers: the intense focus on acquiring new business without a clear understanding of what is being lost. He states:

“Every manufacturer I talk to wants growth. Very few start by figuring out what they are losing. And that is why most growth targets quietly fail.”

This initial phase, according to Tincher, must be dedicated to retention. He emphasizes that attempting to grow with a “leaking bucket” is an inefficient and ultimately doomed approach. In the manufacturing sector, he points out, customer attrition is often subtle and goes unnoticed.

The Hidden Dangers of Unaddressed Churn

Tincher explains that unlike a direct cancellation, which is visible, customer loss in manufacturing can manifest as reduced order volumes, shifts in product line purchases, or a migration of business to competitors. This “invisible” churn, as he describes it, requires proactive monitoring and analysis.

The work involved in this first year is, in Tincher’s view, unglamorous but essential. It involves establishing baseline churn rates segmented by customer type, analyzing the reasons behind customer departures, and differentiating between churn that can be addressed and churn that cannot. The focus then shifts to redesigning customer journeys where “addressable revenue is leaking.”

To illustrate the impact of this focused retention effort, Tincher shares a compelling case study:

“One manufacturer I am working with did this on their claims process. Post-claim churn dropped from 10% to roughly 1%. That’s not a program metric. That is revenue that would have disappeared without anyone noticing.”

This dramatic reduction in churn, Tincher suggests, is a direct result of addressing friction points within the customer experience, specifically in this instance, the claims process.

Sequencing for Sustainable Expansion

Once the foundation of retention is solidified, Tincher proposes that manufacturers can then move into the second year of his proposed strategy: growth. This phase is about increasing the value derived from existing customers by encouraging them to purchase a wider range of products or increase their volume.

As Jim Tincher, CCXP notes, this shift requires a change in focus from protection to demand creation. Customer intelligence gathered during the retention phase informs marketing, sales, and targeting efforts, enabling the company to identify opportunities for expansion with specific customer segments.

Why Skipping Retention Leads to Growth Failure

Tincher is adamant that organizations attempting to bypass the retention phase will ultimately fail in their growth objectives. He outlines several reasons for this:

• Lack of a solid data foundation built on accurate customer retention metrics.
• Absence of operational credibility, stemming from unresolved customer issues.
• Weakened partnerships with finance departments, who may not trust growth projections based on an eroding customer base.

According to Jim Tincher, CCXP, “They are asking leadership to trust their growth recommendations while the base erodes underneath. And when the numbers don’t add up, the team takes the blame.” This scenario, where the team is unfairly blamed for failed growth targets, is a direct consequence of not securing the base first.

In conclusion, Jim Tincher, CCXP advocates for a disciplined, sequential approach. His core message to manufacturers is clear:

“Protect the base first. Then earn the right to grow it.”

This strategy, he argues, provides the necessary stability, data, and credibility for successful and sustainable business expansion.