Retention Tue, Jul 21, 2015
There are numerous lessons on how companies did not execute properly. Homejoy is a recent lesson on the challenges of succeeding as a company. If you're not familiar with them, Homejoy was an online platform to locate and hire hourly professional cleaners. According to Crunchbase, they received $39.7 million in funding from investors since they were founded in July 2012. In just 3 years, almost to the date, Homejoy has gone out of business.
Homejoy's inability to retain guests was a significant issue in why they didn't last. According to a former employee interviewed by Forbes, “Retention was clearly bad, and that’s what killed us..." Furthermore, other former employees informed Forbes that "...Only about 15% to 20% of customers booked again within a month..."
Retaining repeat guests and then scaling as a business is a significant lesson that countless entrepreneurs can attest to. If one places too much emphasis on acquiring new guests and not retaining existing ones, often, there will be serious ramifications, particularly for newer companies. This is why all of the little details we focus on each day at SlideBelts, which at times are not easy to accomplish, are so important.
SlideBelts was established with significantly less money than Homejoy received. Thus, Homejoy also provides a very cautionary tale of how generous funding alone does not guarantee success. No matter what, you still have to excecute each day on the fundamentals and retain repeat guests. The tone of our voice on the phone, the language we use in our email responses, the time it takes to respond to a guest, a thoughtful gesture, how we interact on social media, etc. all have a tremendous compounding positive effect. As you know, some days it's challenging. If it were easy, you wouldn't see companies, such as Homejoy with close to $40 million in funding, go out of business.