08: Churn - Figuring it out and fighting it
Churn is a constant focus of any SaaS business, even more so of any bootstrapped SaaS. Getting customers is hard and keeping them is a must to succeed. Aaron and Darren discuss how to track, view and learn from your churn so you can continue to make customers happy, keep them and grow.
- Heap Analytics
- Google Analytics
- Net Revenue Churn
- Net retention
FULL SHOW NOTES
00:10 Aaron Weiche: Episode eight, Churn, Figuring It Out and Fighting It.
00:16 INTRO: Welcome to the SaaS Venture podcast, sharing the adventure of leading and growing a bootstrapped SaaS company. Hear the experiences, challenges, wins and losses shared in each episode, from Aaron Weiche of GatherUp and Darren Shaw of Whitespark. Let's go.
00:45 AW: Welcome to the SaaS Venture podcast. I'm Aaron.
00:48 Darren Shaw: I'm Darren.
00:50 AW: And we are back at you with Episode Ocho, which I feel like is, every week I like seeing that or every time we talk, Darren, I like seeing a bigger number. It makes me feel like we're really accomplished and we're almost hitting double digits.
01:05 DS: I know, that double digit's gonna be a huge milestone.
01:07 DS: We should have a champagne party of some kind, big celebration.
01:12 AW: Nice, nice. We'll do a virtual toast.
01:14 DS: Yeah, sure, definitely that.
01:16 AW: So we're at least in a better cycle. We're back to talking every two weeks, the last three recordings that we've done, anyway and anything pop in with you in the last couple of weeks?
01:27 DS: It's been much of the same. It's only been two weeks so we're still working on the same things here. We're working some of our services and I'm excited we'll get in this Google My Business syncing working with our platform so that's gonna allow us to build out a ton of amazing stuff. So that's all up and running and we're working on that, launch of our, update to our Rank Tracker is coming. So our rank tracking platform will now support screenshots, so taking screenshots of your listings so that you can be like, "Did I really rank there?" and checking that out, so I'm excited about that. It's coming down the pipeline pretty soon.
02:05 DS: Designs are all finalized on our Local Citation Finder, so the team that's working on the rank tracking stuff, once that gets launched, which is pretty quick, they're gonna shift over to implementing all of these designs to our new Local Citation Finder. I don't know, lots of stuff in the works, lots of things going on, tons of sales calls lately.
02:29 AW: Nice.
02:30 DS: Yeah. So it's been good.
02:31 AW: Gotta love that, especially since we talked all about sales in our last episode.
02:35 DS: It must have been that, actually. People were like, "Oh, Darren Shaw, Whitespark, we better call them, give 'em a sales call." Yeah.
02:43 AW: Yeah, well, I mean, the things we talked about last time, that's... Now that I've literally finished seven weeks of travel every single week but my number one and I already, from putting a couple things out on LinkedIn today, have a few new intros but I have to find at least one, if not as many as three salespeople to help get us to the next level. We have enough going on and we have the right things and we just need to be talking to more people and I need to get them up and running to have an impact yet this year, which is crazy to think but...
03:27 DS: Sales is so time-consuming. So it's, for you as the CEO, trying to manage so much of that, it's really valuable to bring on some people to help out.
03:36 AW: It totally is and I'm a little bit scared about... Not scared but I just realize how much work it's gonna be to train one, two or three, hopefully all together. But knowing, all right, if I sink my teeth into that hard for 30, 60, 90 days, then it will pay off, right? It's a necessary evil, so.
03:55 DS: Yeah, I would... One thing we're trying to do with training is to group it as much as possible. So when we hire, we try to hire three people at the same time and train 'em all at the same time so that they'll get that. And then we've also started screencasting and recording all of our training sessions. So later we could have someone else do the training and they can refer back to that as a reference or eventually dial it in to the point where it's all recorded, be like, "Oh, welcome aboard, here's your training package. Let us know when you've worked through all that and then we'll have a call, right?"
04:29 AW: That's awesome, that's great efficiency. I need to do a better job of that. I hope I'm able to hire two salespeople at once so I can duplicate the output of that training. I've been trying to, even after this call, to record this today, I have a sales call and I've been recording those as of late just so when we do hire, I can say, "Here's a dozen sales calls in the last month. Now you can listen to all these and pick things out, start to think about your pitch and your story and what kinda questions are asked and things like that. So."
05:04 DS: Do you give your prospects a heads-up that you'll be recording the call for training and quality assurance purposes?
05:13 AW: I usually don't say that. Sometimes I'll just tell them it's for their purpose, right and then I'll send the link to the recording along with the materials I shared.
05:20 DS: That's good to do, yeah.
05:21 AW: I've found in doing that, why not give them every piece of that? That way if they have to share up or down, they have that available. Sometimes people even ask for it but yeah, I don't always let 'em know the wire is tapped either, so I probably should do that. [laughter]
05:38 DS: Oh, yeah, you should. You're breaking some FTC laws, I think, if you don't.
05:43 AW: Totally. They're coming for me. I'm sure I'm already on their list.
05:48 DS: Yeah, ding-dong. [laughter] Right in the middle of the podcast, all right.
05:53 AW: Other than that, we just wrapped up... Monday, Tuesday, Wednesday, we had our exec team summit. So for us, that it basically ends up being six, seven of us that kind of lead different areas in the company. We try to have at least three or four face-to-face that we just call our exec summit. We pretty much map out the three days solid to get face time, both where things are at hiring financials, what's next, planning, ideation, try to fit all that in, spend some time together, have dinners together.
We actually did it here in Minneapolis this time with having five of our exec team are now in Minneapolis out of the seven. So that made it a lot easier and then those of us that are here in the Twin Cities, we stayed at a hotel Monday night and Tuesday night just so we could spend more time together and not be commuting back and forth and everything else.
06:53 DS: Right, yeah. Sounds great, that's really helpful. I feel a little bit on my own from an exec perspective. It's mostly me as the primary exec. I certainly have some key team members that I lean on for a lot of those decisions and collaboration and discussing things but in the end, I'm the only, I'm the sole director of things really. So it's nice to have that team around you that you can work with in that capacity.
07:25 AW: Yeah, I adopted the philosophy at my last agency when we grew that and I was basically in the COO role but I really saw that our company was run best at that level and I kinda wanna as we grow, I wanna duplicate that at GatherUp where I can be spending most of my time working on the business instead of in the business so being able to be visionary and recruit and evangelize and do those kind of things and all of those things are things I'm self-aware that that's what I'm really good at and then have the right people handling finances and UI, UX and customer success and sales and things like that. Where I really look at that group runs the company, it's me to navigate vision, motivate all of those kind of things so.
08:21 DS: Yeah, right, totally.
08:24 AW: That's the ultimate plan. We're still just a couple of positions short. Sales really, really being the big one. That's still almost 100% in my wheel house for our multi-location and larger deals so hopefully I'll have some good news on that when we talk in the future.
08:42 DS: So okay, you're currently managing all of that and you're doing it on a part-time basis. What makes you think you need three salespeople? That seems like a lot. Do you actually have that much volume and you're just dropping the ball on that many of them?
08:57 AW: So a couple of different things, one is definitely bringing someone in on the agency side, we already have one agency account exec that is selling the white label version of our product to resellers and we have more than enough leads there. We're manufacturing about 100 warm leads a month there. So that can definitely use a second person to give more touch, a deeper dive. I also believe competition, especially in sales is a great thing. It's the tide raises all boats kind of deal so that's helpful.
And then on the multi-location side, I see the same thing. I'd rather try to bring two people in at once there and at the stage right now, we don't generate as many leads there but to get them going out and looking, I'm gonna look for a sales person that is very comfortable looking for where those next opportunities are and working their networks and possibly their backgrounds and being an outbound sales person more so than just inside sales.
10:03 DS: So who's handling those hundred leads right now. Is it customer support?
10:06 AW: No, our agency sales rep handles the majority of those right now and we have a good 15 to 20% close rate every month with those 100 which is nothing to laugh at but I think we could get another five to 10% out of it just by splitting them up and spending a lot more time and yeah. And I even think that then we'd be in a position where we could do a little more outbound as well because we know the types of agencies that are really successful with our product.
10:39 DS: Yup. Well, hey, with so many people coming on every month, how many you got going off the back door? I think that's what we wanna talk about today, right?
10:46 AW: There you go. We wanna talk about churn and the front end of the problem is getting new customers on and yeah, the back end is do you have a leaky bucket and how leaky is it, right?
11:00 DS: Yeah. Totally. That's a good way to put it.
11:01 AW: Yeah, so for us, we've really ratcheted down pretty tight on churn and really care a lot about customers leaving us, what our churn looks like and in a few different ways. And I think for me at the highest level, churn is a constant thing. It's not something you can look at and be like, "Oh, here's just what we need to do and if we get it there and then it's fixed." It's an ongoing thing that needs to be baked into how you do business and then the next piece is tracking it and being aware and this is something that we've gotten better at over time.
11:45 AW: Once upon a time an account was an account and we just tracked overall logo churn on a monthly basis based on our accounts and then we started realizing a couple of years ago, we realized like, "Hey, each of our market is different." We have single location businesses, that they sign up from the website no touch. They're paying $40, $75, $100 a month. We may or may not ever interact with them in support or anything else. It's just a come in and use as you wish and that's one segment.
12:22 AW: Then the next one is our agency resellers, so these are digital marketing agencies or one or two person SEO shops and they come in and now with us 75% of them are coming in through our sales process. They're getting a demo. They're seeing our pricing. We're sharing a few case studies on how it works and then trying to help them get up and running and getting their clients on it and sell new clients on it.
12:53 AW: And then the third one is multi-location businesses, just kinda five locations up to tens of thousands of locations and these are much more high-touch, sales and demo process, a statement of work, locking them into a year or two years worth of service. So we see both in how they come on, how they're treated, the sales process, all of those different things, we track churn individually inside of each of those categories.
13:24 DS: So that's fascinating. We don't do that. We're the way you were before where an account is an account and we can see how many are leaving and we have a number of things to follow up and try to understand the reasons why people leave but... So do you have that in the account set up type? How do you know what they are basically? Do you flag them internally? Do you go through and mark them all? How do you know if they're SMB or agency?
13:51 AW: Yeah, so in the sign-up process, they're able to state what that is and then when we re-branded, we moved our agency pricing in our multi-location pricing behind basically a form, you just have to say who you are. This is great lead generation for us and then it also allows us to know who those accounts are and then the sales person for agencies and working with them and then you need your account to be an agency account for it to work the right way with the agency dashboard we have. And then the majority of them want to white label so that's already gonna be a key and then other determination, we see how many locations they have in there. So if they did self-select wrong when they signed up, we can easily correct that. We can set three-second switch at any time.
14:43 DS: Sure and so tell me which is the segment that has the highest churn?
14:48 AW: Yeah, SMB as you would probably expect has the highest churn so that's the one that... The good news just as we are going over, we have a half percent improvement in overall logo churn from our 2018 to where we're at in 2019 so far, which is great and we kind of see that mostly across the board but both agency and multi-location churn is almost half of what SMB churn is and we have... I don't wanna get into exact specifics but I would say our SMB churn is definitely in an average slot for how SMBs churn. You're in a five to seven and a half, 8% range per month, that's pretty common for SMBs and SaaS.
15:42 DS: What percentage... I don't know if you have this data or not but I'm interested to know what percentage of those SMBs that churn never really got set up? They signed up, they got busy two months later, they realize I'm not even using this thing and they cancelled. Do you have that data?
16:03 AW: I do, so that is so frequent. We actually internally, how our product is built if any of those that don't understand it, you set up your business location, you can figure what you're outbound templates look like to request a review via SMS or by email, other configurations in setting, which sites you're gonna ask for reviews on and once that's all set up, then it's all about you need to add your customers in and those can be added in manually or uploading a list or you can use an app or a Zap on a Zapier and create a Zap so that they auto-populate. You can even use our API, so it automates out of a CRM or POS but we basically do refer this, we call this the problem of zero and if they don't add a customer, they will... It is so unlikely they will lock any emotional or statistical value out of our product.
17:03 DS: Yeah, totally.
17:04 AW: Because our product is an engine, the customer is the gasoline so it just doesn't run because most people won't be that excited, like, "Yeah well, I'm paying 40 bucks a month then I get to monitor these five websites and whatever else that's not gonna give them value that requesting reviews, requesting feedback, all of those other things will unlock for them so...
17:28 DS: For sure.
17:29 AW: We actually see about 50% of our SMB cancels never even send one request out.
17:37 DS: Yeah and that makes perfect sense and now I'm wondering, okay great, you've identified a pretty significant churn problem. How are you now going to prevent that? Are you monitoring? It's been a week, this person hasn't sent any review requests out. We better get someone to contact them. Do you have anything in place to alert you to these situations and then a system so that someone gets in touch and tries to help them get properly up and running with the software.
18:07 AW: Yeah, so we've tried some different things. Early on we basically created a report called the red flag report and I can't remember the initial things but it basically said, if you haven't added 10 customers in the first 60 days or the first 30 days, then they would appear on that report and we would try to start doing some outreach to invite them to our webinar or what can we answer anything else but we basically were raising the flag like this account is likely in trouble because they're not adding customers into the system.
18:45 AW: As you can imagine with SMBs, we didn't see a lot of response with that so it ended up being something that as we continue to get bigger and other things happened, we weren't fighting it in a service or a human element. So the next thing is we started looking at in the product and we realized like hey, we weren't being as frontal as possible with how to add customers. It was one button from one screen and it became glaringly apparent, we need to bring this to the forefront so a month or two goes when we finally got this all in order but request actually became a main item on the navigation and then you see like, do you wanna add a customer, do you wanna upload a list. Then you see the ways to add customers there.
19:35 AW: So then we looked at, all right, how can we attack it from UI, UX and I really think with all of these, they're almost always that there's never a silver bullet with it. It is about what three, four things can I do from in-product, from customer success, from all those different things and then we just started a trial right now that anybody who's at least on our second plan up, our pro plan or higher, when they sign up, in addition to... And I should mention we have a drip series, so there's five emails that go out in the first four weeks of being with us that outline all the basics. We have a quick start guide that goes out on the first one.
20:14 AW: We put a lot into that and then yeah, we're doing a test right now with pro plans and higher. We're actually reaching out and we're trying to offer them a half hour call and just say, "Hey, we're gonna go through four things to get you completely ready." And the goal of that call, by the end of it is saying like, "All right, now send me your list and we'll help you upload it so we can get you to start sending requests."
20:35 DS: I think that could be so huge because most of these businesses already have a list somewhere. It's just like, "Give us your list. We're gonna start sending out those customer requests." Then you really get to feel the benefit of the software and I think that would have a massive impact on reducing churn.
20:51 AW: Yeah. No, well, I'm hopeful that shows some of it, 'cause it just continuing to figure out how do you get that lever pulled and what is it and part of me is hoping to some extent that if we have to do that consistently by human, that's a little bit frustrating because that doesn't scale well. So you do start looking at, what do we need to make easier in the product or more rewarding or happen faster or whatever that might be but you'd like to find some way where it's not all human touch.
21:27 DS: You can somewhat fake the human touch and that is something we've implemented to help reduce with churn and at least understand why customers cancel. When we get a cancellation, there's this email that goes out from firstname.lastname@example.org, it looks like I sent it even though I didn't. It is just like, "Oh, hey Bob, I noticed that you cancelled and I would love to hear any feedback you have. What is the one feature we were missing? What was lacking? What could we have done to have kept you as a customer?"
22:01 AW: So I send that email and it looks like it comes from me and when they reply, it goes to me and then I always get back to them right away 'cause that's such valuable interaction when they do take the time to provide that feedback. So it makes me wonder if you could do something similar where an email goes out and looks like it came from let's say Josh and it says, "Hey, we notice you haven't added any customers. If you send us the list, we'll do it." And that email's completely automated but then Josh gets the reply and it comes to him and he pumps the list in.
22:31 AW: Exactly and we're in the first steps of doing that, so the one big thing we have to get better at is internal app analytics.
22:42 DS: Yeah, same.
22:43 AW: We don't have deep enough data sometimes on what people are or are not using. We can see surface level how many customers have been added but we can't even tell, are they even clicking to that page or feature or some other systematic thing. So that's one thing we have in motion. It's probably a quarter or two out from the number of moving pieces but exactly what you outlined, yeah, is what we wanna get to is how do you personalize that help experience so that the system itself is seeing something that's missing and either giving them a suggestion to learn about it or here's who you can talk to, to get that corrected.
23:27 DS: Yeah, that in-app stuff is so valuable. How are you planning to implement that? 'Cause I know there's software, like Hotjar or whatever that you can do to track all of your engagement. What buttons are being clicked on and what not? But then I always think well, we can kinda build our own tracking system for measuring what gets clicked. You can even do an analytics, just like any click tracking could be put on every link in the navigation, every button.
23:52 AW: Yup, I think that's where we've arrived is using Google Analytics, at least for the tracking side. We looked at Heap Analytics and in the end, based on a couple of different things, one didn't just have a great service experience with them and talked to a few other people that had used Mixpanel and had used Heap.
24:15 DS: Yeah, Mixpanel.
24:16 AW: And we had a few different people that said, "You know what, you can do everything you need to with Google Analytics and Tag Manager so that is where we're headed. We use Appcues and we've used that in our product for a while when we add something to a navigation or roll out a new feature or we change something up, we use that at a macro level to make any user aware when they log in and it's been a great product for us just to point things out to people that are new in the platform, things they need to be aware of. You can take multi-steps with them. That's been very successful.
24:54 AW: So the goal with that is then to integrate those two together so that then analytics is showing like hey, they haven't even clicked on this page that then just for that user in their account, it can service the alert that says, "Hey, we noticed you haven't add anybody. Here's the request tab, click on this." And there's five different ways to add customers. So that's what we're hoping to use a combination of Google Analytics and Heap to give those personalized Appcues or Google Analytics and Appcues and be able to give those personalized cues to get them to take the next step that's specific to that user and that account.
25:34 DS: That's interesting. I looked at Appcues and it's just like a wizardy kind of thing. So it's like as soon as you load the app, it has these little overlays that will point at specific things, like go here to do this specific activity, go here to do this and it's like it steps you through and kinda shows you the features of the app. Is that what Appcues is, right?
25:54 AW: Yep, it ends up being an overlay and so you can anchor it to navigation items or things on specific pages or drive them to specific pages. You can do steps with it and then it lets you know how many times it's been activated, how many times somebody's gone through it and completed it. So we've found it to be really helpful instead of those things happening silently or in the dark and the user having to discover them themselves.
26:19 DS: Right, yeah, I get that when I looked at it, I thought the pricing caused it was based off of a number of sessions kind of thing and the pricing looked really expensive to me and I thought well, we could just kinda build our own. It wouldn't be that hard to build our own little overlay that directs a person through the software, right?
26:35 AW: Yeah, yeah we used to have an in-app notification. We just called it an in-app alert that we could control what page it would appear on and the header and I can tell you this has been wildly more successful. It is in the... I can't remember off the top of my head but it is in the hundreds of dollars a month but we absolutely... We almost always have one macro Appcue going on at a time and we find it just to be... It's been really helpful for us and when we look at that, when we look at the cost, we totally see like, yes, it pays off and now it gives us that extra step that as we get to better tracking and we get to personalization that we can then take it that step that now that's cheap for what you're able to do.
27:20 DS: And you can set it up with your support and marketing people, rather than developers having to get in there, right?
27:26 AW: Yeah, once a code's set whatever else, yeah, it's actually our Chief Experience Officer who's all of our UI and UX and everything else, he owns Appcues for us and does all the set up with it.
27:39 DS: Sure, yeah, that makes good sense. Yeah, I get it.
27:41 AW: Yeah, it's been good. The one other thing I wanna point out on tracking that we've just recently evolved to is tracking net revenue churn and the premise behind this is not every logo is equal and when you're only tracking logo churn, losing a $40 a month, single location dog walker pales in comparison to losing a 200 location hotel.
28:07 DS: Totally, yeah.
28:08 AW: Yeah. So net revenue churn measures your revenue churn versus what are you expanding in a month so in our case where we have resellers that are adding locations or say we have a multi-location that we renew and now they moved from basic to the pro-plan or pro-plan to pro plus and they're expanding their revenue, net revenue churn looks it like how much are you expanding and that doesn't include new sales, so your brand new deals are included, so it kind of looks at it as a self-sustaining environment. Will you continue to grow without landing new deals because your expansion revenue is greater than your revenue churn.
28:49 DS: Right.
28:50 AW: And that's a much more finite number and we just finally started tracking that for Q1 of this year and it was definitely an eye-opener where we ended up close to right around a 100% for that month, meaning that was good but we had some months that were lower, some months that were higher. But really, I think just from some numbers we shared at our executive meeting around 120% or 130% net revenue retention is like best in class and the closest you get to 100, that's definitely a good number. If you're above 100 and constantly taking in more than what you're churning out without new deals, that's a self-sustaining system. So we're really... We're right on the edge of that so far, with tracking that.
29:38 DS: Wow, that's exciting. So what do you use for tracking? I'm really jealous of your tracking because we have a legacy account system that we built in 2010, that has just been Frankenstein built upon and bolted on stuff to it and it's just the worst, it's the worst code base and every one of the developers hates it and avoid getting into it because it's such a mess and so, we've been in the process of rebuilding our account system and it's very close to launching.
30:10 DS: But because of that, I'm in this limbo state where I can't say, hey I wanna track this metric because our guys are like well, what's the point of building that into the existing account system, when we have a new one coming soon, right? So, I'm really in a stuck spot here where I can't get these metrics until we launch our new account system, so I'm just curious what do you use for accounts or for these dashboard metrics?
30:33 AW: Yeah. So we built our own dashboard in our, our world's run by what we call our admin panel so inside of that we have an account churn report that lays all that out and breaks it down like, here's our overall account churn, here's single, here's multi-agency. Now the net revenue churn, we have to calculate that by hand so we have to use a couple of different of our billing numbers and reports and do that by hand which is a little bit tedious. I would love... Eventually, I think we can build a report that that doesn't... To start with, we're just kinda like, alright, let's do it by hand, it's incredibly valuable.
We've learned a lot about the formula and all those other pieces in the process but we will eventually need to build our own report to do that. That said, if you look back, we've talked about this over episodes like we are eventually this year, switching over to a new billing system, where that is a report provided in that billing system so that's another advantage to going with one of the existing SaaS billing products that's out there.
31:41 DS: They've built all that already.
31:43 AW: Yeah, most of them have those reporting suites or the ones that integrate with a ProfitWell or Baremetrics that allows you to put your data into visible formats in the right types of reports.
31:55 DS: Yeah, are you using Strike for your payment processor?
31:58 AW: We're not, we use PayPal. That was where things started with far before me and... Yeah, it integrates with some things and but yeah, most of the really forward, new age reporting things are Stripe and Braintree and things like that, and not so much PayPal Pro.
32:23 DS: Is it Payflow? Is that what your processor is? Payflow. Not PayPal.
32:27 AW: PayPal Pro is what ours is.
32:29 DS: PayPal Pro. Yeah, I should look into that. It would be nice if I could just spin up a dashboard quickly based off of our Payflow account, just connect them. I think that that might be something that I could explore in the short term.
32:41 AW: Yeah, yeah, no definitely. Unlocking that data and being able to see what's there and the different types of reporting. It was like when I came across a couple of articles on the net revenue churn on a monthly basis, it just got me thinking about it differently where it's like yeah, I already knew logo, per logo wasn't the same and while we're working hard on that, there's so much more below the surface of that, that it's really about, are you leaking? What does the dollar leakage look like each month? Not just the logos. As we said, all accounts are not equal and as we've sold more and more into multi-location and some bigger deals like we have those massive discrepancies between a $30 account and a $5,000 a month account.
33:28 DS: Yeah. That's okay. So speaking of, let's say you are tracking this net revenue churn, how do you react differently to an SMB that has churned versus a $5,000 a month account that has churned? And so you now have the data. Are you doing anything different based off of that data?
33:47 AW: Yeah, for SMBs, we try to cycle what we see in that back all the way to the front. So we look at why did they leave? So again, this continues to expose our problem of zero customers added and we continue to look at how are we messaging them. They need the upload customers. How do we make it easy to upload customers? How can we support them uploading customers? Eventually, do we need to reward them for uploading customers? What are all those things that we need to look at it from that angle?
34:18 AW: The multi-location clients are definitely different because they're... And it's an area where we're strong and we're getting even stronger and that's looking at how our customer success team engages and we've had a really fabulous reactive customer success team. We do support extremely well. If you read our reviews, you see it in our reviews, people rave about how fast we are, how thorough the materials that we give them to put it on to but where we're trying to get now and especially as some of our early deals from last year when we started to have multi-location success, now we're trying to be like " Alright, hey, your deals up in 30 days. Let's jump on a call and talk about your renewal. Are we hitting goals? Here's some of the data we see. Here's ideas on how you can do better? And let's do that and get this next deal. Let's sign on again for another year or two. Great."
35:11 AW: So we're just starting that within the last month. We hired a VP of Customer Success that has that kind of background and has really started orchestrating what that looks like. Our onboarding process which, there's another part of churn is how easy do you make onboarding and to get set up and we've always had a really great onboarding process for some time now that's well documented out and makes it really easy for the customer to understand what's going on. It's ratcheted into four phases.
35:43 AW: But once they got up and running then we stopped being a guide and then we're like "Alright, if you need something, let us know." And now we're trying to build out that first 90 days where it's like, we're still driving it and like "Great, here's what we see happening. Alright, let's set this up now. Let's do this additional thing." And getting it so it's truly customer success where we're like "Alright, we know how to get you to being successful within your first 90 days."
So then after that, the next nine months, our lather rinse repeat of what's going on or smaller adjustments but we already have you on your way and then we know, yes you're gonna renew. We're gonna keep you long-term because you're happy with what's going on. It's not a secret. It's not a wondering when renewal comes up like, "Oh, will they re-sign. We have no idea." So...
36:30 DS: Yeah. Well, with that onboarding you solve that problem of zero, right? You get them into the system using it and seeing with benefits of the software.
36:39 AW: Yeah. Multi-location suffers far, far less from that 'cause we're usually in multi-locations. We're trying to find out two things. One, what other pieces of software you're using, so that we could do an integration? That's the number one thing is we wanna make it happen auto-magically that the customer is coming into our system after a purchase or after their experience.
If that can happen, then we're making them, "Hey, here's how our list upload works. And all you have to do is pull down one customer list that has first name, last name, email address and a location identifier and show us a sample of data you'd pull from that. Okay, it has the right things. Here's where you upload that in our system and if you do this on a daily, every other day, weekly basis, part of you, it takes you five minutes to do, your system is gonna run smoothly."
But what we haven't done in the past is checked to make sure that those manual ones are still doing it, where now we're trying to set at more things, so we know "Alright, this person's actually falling off. They haven't uploaded someone in two months. They get great results when they do it but they just haven't been doing it. So now we're actually putting a little more in place so we can recognize those things."
37:49 DS: I'm picturing a sort of dashboard that a customer success person would log into and it would automatically sort near the top. All of the least engaged customers. So a lot of these SMBs that are basically haven't uploaded anything and you could have different engagement points. What pieces have they done and they could go from green to red depending on how deep they've got into the software and the customer success person gets to pick off the top 10 of those every day. Just log in, spend an hour touching base with those 10 least engaged people and trying to bring them in and help them out.
38:29 AW: Are you spying on our company?
38:31 DS: Did you... [laughter] I'm just thinking about it man. Is that what you were doing, is that the idea?
38:36 AW: Yeah, yeah. So, Taylor, our new VP of Customer Success, that's one of his things is basically creating a score card for each customer and there's components based on the features they're using, the results they're seeing, customers being added, what's their tone when they talk to us in support or whatever else and using all of that to develop a score, so that we understand where they sit and the system will provide some of that data so we can see if somebody isn't adding customers or they don't install review widgets on their site, we'd see that contribute to that score being lower so that we get that alert so that we're like, "Okay hey, these guys are at this level, let's engage with them and get them back up to a healthy level." So no, you're spot on, you're right, you're right on track with us, Darren, I like that.
39:26 DS: Well, I wish I was ahead of you sometimes but you're always like, six months ahead of me with all of these ideas. [chuckle]
39:34 AW: It just works out that way sometimes but what do you guys see, I mean what's the biggest reason when people are giving you their cancel reasons, what are you seeing for... Why do they churn out of Whitespark?
39:44 DS: It's most... So it depends on the software, we have this unfortunate problem that we have multiple software systems and multiple services and so we don't really have a sense of churn out of our services, like let's say an agency was using us for citation building on a regular basis and then they stopped. That's a churn, right? They went to some other provider with citation building services. We have no line on that right now, I'm not tracking that at all.
On the software side, we have cancellation. So whenever they cancel, we try to collect feedback from them and then we will use that to help understand why people are churning but a lot of this awesome stuff like integrating tracking within the software, they're all fantastic ideas that we just have not implemented yet.
The biggest reason people churn out of, let's say the local citation finder is; I'm just not using the software and it actually... It is unfortunately part of the nature of the software. Let's say you're a small business, you sign up for the local citation finder, it suggests a number of places you could get citations, you get those citations and you're like, "Why am I paying monthly for this software?" I don't need it anymore, I did it, I accomplished my goal and so to solve that problem which we are fully aware of, the new version will provide ongoing recommendations so you don't have to think so much about it.
The system will feed you every month or every week, actually, we want it to be like, "Here are your top citation opportunities for the week," and then also doing a better job of keeping track of when you do get them and then sending out rewards and just lots of engagement type features is what we're focusing on with the new version of the LCF, so that's in production. We will be launching that in the short term and continuing to improve that. So there's a lot of opportunities just within the software to improve engagement and so we have a big one there.
41:46 DS: Same thing on the rank tracker...
41:47 AW: That definitely is making it stickier and more valuable on an ongoing basis, that's a big thing, right?
41:54 DS: I think for me it's the hugest thing and it's the one that I want to focus our attention on solving first and I think that that will have a pretty significant impact on churn of the local citation finder for that particular piece of software.
42:06 AW: Do you guys look at or track... Are people more likely to stay with you longer if they're using multiple products versus just one service and one product or two products that... Do you have any idea on that?
42:20 DS: That's a great question. I don't have any idea on that. If only we had our new account system and tracking system, I'd be able to put some of those... Get an idea of some of those things, I would think that it does have a small impact. The software systems are all for very different purposes and a number of companies, most companies would bundle things together. So if you look at, let's say, a SEMrush or a Moz or HHreps, you just sign up for Moz and you get all of the different products and services in your Moz Pro account. That is a direction that we're heading as well. Bundle, but then allowing people to also self-select tiny things.
If they only want the LCF, then we're still gonna allow that to happen but bundling, I think we'll have a big impact and maybe give people broader value and especially when they've signed up for a bundle, they might be using our reporting stuff on a regular basis or our citation analysis stuff but they might not need some other things and so bundling will help a lot, I think, to reduce churn. Just to provide a one place to get everything that they need.
43:31 AW: Nice, what do you guys do in terms of support channels when people... It's like on one side you have the silent sufferers and that's what we were kinda talking about with having a score card or an alert, something that helps you know, they're drowning and they always say, "Drowning is the silent killer because it isn't the screaming and kicking that you normally think it is when someone's drowning."
43:57 DS: Yeah, right.
43:58 AW: And they're in the water and drowning, they're not swimming, they're drowning but what about the ones that raise their hand and say, "I have an issue," what does... How do you guys handle your support? What does that look like and how successful do you feel like that is?
44:12 DS: I feel like we do a pretty good job. Like you had said earlier, with your support, we're quite responsive and our reviews reflect that people always talk about how support at Whitespark is good. We almost never go 24 hours without responding to a ticket. Our team works hard to try and solve problems, we're very friendly too. If someone says, "Oh hey, I haven't used the LCF in the last three months, can I get a refund for the last three months I didn't use it?" We're generally like, "Yup, no problem."
We don't really want to... We wanna be understanding and empathetic with our customers in many cases and we wanna try and help them out as quickly as possible and the support is fantastic for driving feature direction as well. So when someone complains that it's missing this or missing that, then it ends up on our road map and we do a good job of trying to implement that which of course in the long-term will reduce churn as well.
45:14 AW: Yeah, for sure. Well and I think support is probably a whole another topic for us some day so we probably shouldn't get down that vein too far 'cause we probably should wrap up here for the week but...
45:25 DS: Yeah, how are we doing full time? Let's see.
45:27 AW: Yeah. Ticking up there again. Yeah, we can just go on and on and on, right?
45:33 DS: I know.
45:34 AW: I'll just add support to our cue of topics to talk about but I think in closing, I'd like to hear a couple of things from you that you think is really important in churn. But mine are ... number one, as we alluded to with a lot of these things like figuring out who's in trouble, even before they realize it because they don't always realize it, they just obviously hit a switch where they don't find value in your product and they might not re-enter a new credit card, they might just go and click Cancel but at some point in time, the value versus the dollars spent isn't there.
So, you need ways to figure that out once they do that and that's where we talked about a number of things that are there because you really need a way, when you can be proactive so you can ask them how they are doing and you also give them a chance for them to tell you how you're doing. Those are great ways to suss out problems, issues, misunderstandings and a lot of time we just find people don't even know that's available in our product, right? That has so many customizations and so many settings.
46:43 DS: Totally.
46:43 AW: And then lastly, just realizing you have to attack churn from all angles, it's user interface, it's user experience, it's help guides, it's tool tips, it's using something like Appcues, it's internal app tracking, it's a customer success team, right? It is a complete team effort to continue to move that ball forward and drive churn down and what would yours be Darren?
47:06 DS: I really think the biggest one is that internal app tracking. So really identifying engagement, I think that you start to churn when you have people that are not engaged with the product and so getting a line on that and understanding what features people are engaging with and when people will stop engaging, getting stuff in front of them so that they do start engaging and trying to automate that as much as possible. I think there's a great opportunity there for SaaS companies to say, to have something in place that tracks, identifies when engagement drops off and then pings them with suggestions about how they could get it back engaged. I think that has a huge impact on churn.
47:47 AW: For sure. I totally, totally agree with you and something tells me we will probably address this topic again, in the future, not so far away and hopefully, we have some updates on some of the things we're trying to do with it. So...
48:00 DS: Yeah. We gotta get beyond our hopes and dreams and then we'll have a whole episode on our successes like, Wow! We reduced our churn by 12% by implementing this awesome thing.
48:11 AW: You just gave me new episode idea called "the hopes and dreams" right where we lay out our biggest hopes and dreams that our product could do or accomplish or handle.
48:19 DS: Yeah Totally.
48:21 AW: Alright, well, awesome. I think it's a great topic. Again, there's so much more we could cover but hopefully our listeners got some good tidbits and ideas off of both the things that we're doing to track and address and try to combat customer churn. So with that, we will bid you ado, hopefully you continue to enjoy our episodes, please leave us a review on iTunes, otherwise tweet at Darren or I, we'd love to hear feedback or any topic ideas that you guys have, that's always helpful. And other than that, we'll talk to everyone in a couple of weeks when we record episode nine.
49:02 DS: Looking forward to it, we'll talk to you all in a couple of weeks.
49:05 AW: Alright, take care Darren and talk to you later everybody.
49:08 DS: See you.