How To Win The Retention Game: Three Things You Can (but probably won't) Do

Retain profile

Yaw (00:04):

So I'm really excited for everyone to be here today. Uh, we are, we are kicking off retention or retention Chronicles. So I'm Yaw Aning, I'm the co founder and CEO of Molomo. Um, we've got a really jam packed day, nine sessions with one focus, how to drive retention your econ business. And so throughout the day, uh, we'll be dropping some stuff on, on Twitter, um, uh, using the hashtag retention Chronicles. So feel free to follow along there. Um, and, uh, and if you have questions or comments, you have, please drop them into that, uh, using that hashtag. So we're going to kick off the day with two absolute legends. They probably need no introduction, really excited for them to kind of kick off the conference with some high energy. Uh, I'm introducing Valin web. They're going to be talking about how to win the attention game. And so Valen web feel free to take it away.

Web

I just like to start before I kick it off to Val. Cause I would say she's the leader of this craft. We both have excellent glasses.

Val (03:37):

Yeah. And three letter names and yeah. So yeah. Great choice. Although we can't, we have to pay a lot of money to get a Hey email address with our three letter names. So, you know, there are downsides, I suppose. Um, yeah, so let's uh, put my phone on airplane mode. Um, let's talk about retention. So, uh, I'm going to share my screen. I can do it right.

Val (04:09):

It's always a crapshoot. You can see this well done. Yeah. Cool. Okay. So we're going to talk about how to win at the retention game. And, uh, these are there's three things that you can do to totally kill it. Retention. Um, the thing is that most people don't do these things. Most people will probably won't, you'll probably watch this and not do any of these things because they're not, um, they're not quick wins, they're not massively scalable. And um, and they're not something that you can really like. You can put some numbers to it, but it's not something that you can measure in a quantitative way. And so a lot of brands don't want to do that, whether it's because they're, uh, their board or their funders, their, uh, VCs don't want things like that done because you can't measure it, you can measure it. You can. Um, but the thing is that most of these things don't get done. Um, so we're going to talk for you for the next 28 minutes about a bunch of stuff you're not going to do. So. Uh, and if you are going to do it, tell us because we'd love to know my kids are quiet until I start recording something and then they are screaming for me. So we're just going to listen to that in the background.

Um, so there are three things that are absolutely certain in this life, death taxes, and there's no right answer to any of this. Um, so sales marketing, it's different for every brand. If you try to copy exactly what another brand is doing, uh, it might not work for you, but you have to test it. You have to test it. So, um, and I think that I, I'm an email marketer. I think testing is everything. And that you have to try because if you don't try, you don't know.

So it is five times cheaper to keep a customer than to get a new one. And if you have any kind of recurring revenue model in your business, you need to know that, that it is so much easier to keep an existing customer than to go out and acquire a new one. Especially right now, it's real hard to acquire new customers right now. And, uh, the internet is a super busy place. People get distracted all the time at all points in their buying cycle. So that new customer is hard to convert. And we see that left and right. And, uh, I know personally I'll have, uh, tab open on my browser and be halfway through a checkout and the kid started screaming or, uh, you know, something happens that I need to hop on. I need to hop on a webinar like this. And, um, and I forget, and I don't know about you guys, but that definitely happens to me a lot and I guarantee it's happening to your customers. So the thing that we have to remember is that our customers are humans and humans are infallible. So we, uh, we can do some things to fix that though.

The first thing is to know your churrn rate, if you're here, you probably know what your turn rate is. Um, if you don't, your turn rate is the number of people who have left your subscriptions or, uh, you know, your monthly recurring model, uh, their, the number of customers that you've lost in a time period divided by your total number of customers. So that's your turn rate. You can measure it monthly, you can measure it in annual, um, you can measure it quarterly. However, your subscriptions are set up is probably the best way to measure it.

Web (2PM) (07:42):

The Val what's a, what's a good churn rate for it for us.

Val (07:45):

Yeah. Um, so you hear great turn rates of like nine to like kind of under 10%, right. Is a really good turn rate. Um, I've heard some amazing turn rates, like four or 5%, but I don't want people to feel like if they're up in that, you know, 20 to 30% that they're the third, you know, script, right. Yeah. You're not a failure, right. Like, first of all, that's 70 to 80% of customers that you're keeping. So you have to think, you can think about the flip side of your turn rate. And that's something that I really want people to celebrate too, is the people that you are retaining, what are you doing with them and keep doing more of that? Um, yeah, but I think like, I don't know, what do you see web like what's um, when you look at retention,

Web (2PM) (08:33):

You know, uh, I'll give you a quick antidote. You know, Mike, that's essentially the basis of my company. We're a subscription business. And so, um, I take turn very seriously. And a lot of the mechanisms that I have built into 2:00 PM is designed to help reduce churn as much as possible. My churn today was 4.17%. And, uh, that actually scares me cause it's usually in the threes, which means something went wrong. And for me, that one thing that went wrong was I wrote something last week that a lot of folks probably didn't agree with because it was outside of the scope of traditional retail and eCommerce, but I felt it was important to publish. So that usually that usually elicit some pushback, which accounts for the bump. Um, I would say that at the peak of the COVID scare in Ohio, at least, um, we, I probably experienced up to 9% churn.

So I had to really work to stabilize that and to get sort of my group back. And I tripled it tripled overnight, started cutting a lot of subscriptions because they were afraid that, you know, that they were going to lose their jobs, blah, blah, blah, blah, blah. Um, so I take it very seriously and I, I just worked to add value. I, I work to develop one-on-one communications with the people that are subscribers, meaning like all you have to do to reach me is replies to the email. And as long as it's like a amicable, even if they disagree, like as long as it's an amicable email, I'll usually respond as quickly as I can. Um, yeah. I, I really interested in hearing what your mechanisms are because I'm, I'm in the thick of it and I'm trying to optimize for, you know, minimal churn.

Val (10:23):

Right. That's why we're all here, right? Like we're all here to learn from each other. And, um, you know, the, that tripling of churn with Kobe, like I always, especially right now tell people, take out those, those extreme moments. Uh, so, you know, if you're looking at your turn numbers, maybe don't look at like March, April as far as, uh, indicators of your standard churn. Um, but kind of go back in January, February, and then maybe even looking at now, um, what your regular turn numbers are too. And so that annual trends is going to look really different this year. Um, but look on a monthly basis at earlier in the year. And then, uh, it started, things are starting to level out now. Uh, customers are more willing to give brands a try and, uh, and to come back to subscriptions that they left.

Um, so I think that that's really important to something that we aren't going to talk about today is reaching out to people who have canceled and, uh, and just talking to them. Um, but we'll, we'll kind of talk about that actually. Um, so there's, you know, we talked about there's three things, right? So thing, number one is you could do better support, but you probably won't, um, better support is actually thinking about not just support but success. So when you have a, whether your product is you and one of the person running it, or you have a large, uh, you know, team that helps manage incoming, uh, inquiries and, and customer support tickets, um, for the whole ticketing system, it's really important that you remember that they're human beings on the other side of these tickets. They're not just tickets, they're not just, uh, you know, words written on a screen.

Those words were written by a person, and it's hard for them to remember that there's a person receiving them. So it's like our job as the brand owners to, even if we're receiving words that it's like not kind words, not something that's, they're thinking a person is going to read. Um, it's our job to, you know, be the example, right? To, to show them the way that they can be treated so that maybe they turn around and treat us the same way. Of course, we don't want to work with abusive customers, but when, um, it's easy to forget that there is a person on the other side of the computer screen when you're writing. And we all know that from being on the internet as long now. Um, so the thing about better support is that it's not just remembering that they're human, but it's about thinking through the entire chain of that ticket.

And that chain begins before the ticket is written and long after the ticket is sent in. So let's say I, a customer writes in and says like, Hey, uh, you know, I love, I love these, these workout pants. Uh, I've been dying for a pair in red. I see you guys have them in blue and black and green. Are you going to do a red? And your support person says, Hey, appreciate that. We don't have a plan for red right now. Um, you know, this is what we have. And so hopefully you like one of those colors and choose something else. Um, but you know, keep an eye out is typically the response, right? Like keep an eye out, keep watch your inbox. And we'll let you know, as soon as new colors launch and that's tricky,

Web (2PM)

What would you have done?

Val (14:02):

Yeah, it's tricky because you, you want to acknowledge what they, um, what they've asked for, but, you know, it's, I think that it's about actually the, the after, right?

So let's say, so the response initially can be like, Hey, we hear you. Um, maybe you have been asked for a new color multiple times, like, Hey, we've heard that request a lot. And actually I'm going to put your request in the, you know, in our, our system, whether it's, you know, how we use Trello board or however, we keep these kinds of requests, um, we're going to tally up those requests and, you know, the, if we hear enough demand for red, we're going to go for red. Like, that's the way we want to, we want to serve you guys if that's the way that you operate. Great. I think that the most important thing though, is that taking that request and tagging it somehow, what, in whatever system you're using for tickets, whether it's like just a Gmail inbox or some kind of help scout or something like that, give it a tag of, you know, product request, red pants.

And then when you launch that red line, send an email to those people who specifically requested that item, maybe even give them like first dibs at it. And it's kind of, it's kind of one of those, like, Hey, back in stock reminder emails, but it's a direct message from a customer support person to the person who requested this item to let them know like, Hey, we hear, we heard your request. You amongst a bunch of other people sent this request in and we want you to know that it exists now and we're giving you first dibs. We're, you know, we're setting it live tomorrow morning, but we wanted to let you know tonight, um, something along those lines, right. Where we can make people feel seen and heard that's all human beings want. Right. Absolutely. Um, so I think it's really important to go beyond that traditional support requests to w we worry about like, let's get through the requests, let's make sure everybody gets a response, whether it's Facebook messenger or, um, re replies to emails.

And I know that support online and phone support is bogged down in incredible ways right now. Um, and so the, the focus is on let's get through the Q a, but if we can get through the queue in a mindful way that we can then use all of that feedback and all of those requests to drive our brand, then we can not only retain customers longterm. We can even win back customers who maybe they didn't make a purchase at all, because you didn't have the red line and that's what they want. Um, and so when you then email them directly to say, Hey, two months ago, you asked for this red line it's available. Now that's a huge win because they feel like they matter that their opinion matters and the likelihood of them buying just goes way up.

Web (2PM) (16:54):

That's a really valid point. Um, what are any other examples of programs that you could put in place where the, the outcome is, the customer feels listened to?

Val (17:07):

Yeah. Um, so listen, I think like all human beings want is to feel seen and heard. And if you can do that across your entire brand, then you're winning. That's how you win retention is to help people feel like they matter. Um, it, you know, we, we stick around as customers to the big box stores and Amazon and all those others because of convenience because of, um, commodity of the market. But, you know, it doesn't make a D it doesn't make you feel like you matter, right. Those Amazon does. I don't, I don't matter as an individual right. To Amazon, but I do matter as an individual to some smaller brands that I, that I shop with. And I see it in, um, in those even just having that, let me know when it's restocked email, I see a lot of sites that don't even offer that option of the email notification. When a product is restocked, get that up and running, let people enter their interest because not only gives them the opportunity to hear from you when something is restocked, but it also tells you, Hey, we've got a ton of signups for this restock. Let's focus on this restock over this other product. So it saves you time and money on the brand side.

Web (2PM) (18:27):

Yeah. I would also say, as it relates to Amazon, I think whenever you look at a company like that at scale, it's important to consider, what they're doing at scale to try to emulate those same sort of feelings that we could, you know, uh, move forward with a small businesses.

Here's an example I do feel cared for by him. And I'll give you, I'll give you a prime example. I probably use prime now three times a week when I'm in Columbus, I worked from home and I rarely want to go to the store in the middle of the day. And I eat a lot of snacks. Val ate a lot of snacks. So that's my primary source. The one thing I love about Amazon prime now is that it knows everything that I want to buy before I buy it. They make it very easy for me to mindlessly click 15 buttons for 15 products in the habit of my door, then the hour and a half. That's my love language. So I'm stuck. I'm there for life. Yeah. I think that, that's just an important example of how you can mechanize that at scale. Obviously Amazon has a tremendous number of flaws, but for the big companies out there, I do think that at least a derivative of it is doable.

Val (19:45):

Yep. And it's the, it is looking at how these larger companies have created scale in these, uh, you know, ways to make people feel seen and heard and how do we do it and our, at our smaller level. Um, and can we, because we don't have billions of customers, um, can we do it in a different way? Can we do it in a more personal one-to-one way? 100%. Yeah.

Okay. So there, the second thing, Oh, here we go. You can talk to your customers, like actually talk to them one to one. Um, but most people don't. And I know that because I get hired to do it for brands, um, and I get hired and they, and I asked them if they had done customer interviews and they say, Oh yeah, we talked to our customers all the time. But what they're talking about is the product, um, in this image here is a screenshot from a Slack community of operators and were talking about having one-to-one conversations with customers and how impactful it is and the types of feedback that you get on not only the brand, but some of the ways that they talk about the problem that they're facing, the reason why they made a purchase from you.

Um, and this conversation references jobs to be done, which is a methodology for interviewing. Um, have you ever dip dove into jobs, web jobs, jobs to be done? I haven't. No. Yeah. So the idea here is like your customers hire your brand to do a particular job. And it's typically not the job that you think that your marketing, right? So let's take those red workout pants. Um, you buy workout pants, not to have pants to wear when you work out though, that's like, obviously a portion of it. Um, but you buy workout pants. They're, they're like an aspirational purchase. It's the, the job is to look like an athlete when you don't feel like one, um, the job is to help you feel supported when you're out on a run and you can go an extra mile. Um, the, the job is to wick away, sweat so that when you are in that last 10 minutes of your workout, you aren't overheated.

Um, there's any number of jobs, depending on what kind of product it is and who the customer is, but you don't know those words until you talk to your customers. So that's the idea behind jobs. And there's a couple of, um, a couple of questions I want to share that I use to do these interviews. The interviews are a lot more about your customers and about your product, and they involve a lot of listening. So there are a few questions I use, but I want to give the caveat that I do a lot of listening when I do these interviews.

Um, so the first one first, you want to start talking about them because everybody likes to talk about themselves and we're all really good at it. Uh, these are questions we know the answers to. So one question you can ask them is, you know, how would they describe how this problem, how, how would you describe how, uh, you know, working out fits into your life, um, shows up in your life, it's in you, you can change those words for your brand.

Uh, so talk about, get them to talk about the topic at hand, the topic that your product solves for the problem that your product solves for, ask them what they're passionate about. Talk to them about their life. They'll tell you. Hmm. Uh, and then talk to them about that biggest thing that keeps them awake at night. And the, these two questions may have nothing to do with your product, but it gives you insights into who your customers are, the way that they think and the kind of that they use to describe their lives. And those words are incredibly powerful. These questions that I'm sharing with you give me that voice of customer data, that I need to be a really powerful email marketer. And my co my clients use these words all over their website, all over their marketing coffee, um, in their product descriptions everywhere.

So these are really valuable questions to be asking. And I do these by the way, in like a, just like this, like a zoom meeting, and I get a recording, a transcription, um, so that I can have the words exactly written out.

You also want to talk to about your product, your product line. So, uh, you can ask them what was happening in their world that led them to buying your product. If they've made a purchase already, or maybe they're just on your email list, like they came to your website, they wanted that 20% off coupon, and they joined your email list. I'm like, what brought them to your website in the first place? You want to talk about that? And then, uh, what happened after they purchased that made them feel like they made a good decision? If they say nothing. I didn't, I didn't really know until I got, got it and tried it on or used it. Um, that's an indicator that there's some opportunity for messaging in between the purchase and the product delivery

And then what were you skeptical or anxious about when you made this purchase? Um, and then if they, if you have a subscription and there's someone who has turned out, you might ask them, is that skepticism or anxiety, the reason that you eventually no longer used our product, that you stopped subscribing, Um, are there other questions that come to mind as far as like digging in a bit with customers doing these one-to-one type interviews? Have you ever done these Web?

Web (2PM) (25:42):

I haven't done one on one interviews, but I do have a questionnaire. People tend to email me to let me know that they're canceling their subscription or they'll note it privately. And the question that are the answer that I hear typically is this is, you know, this is great information, great content, but I don't have the time to keep up with everything. Yeah. I don't agree with that. And so I say nothing, um, just because I, my personal philosophy is to focus on the customers that remain and give them all of my energy, all the juice that I have that of trying to, I don't think that it's, it's not as easy for the product that I sell to win back customers. That's just my personal belief, because the reasoning typically is I don't have the bandwidth to process this much information, even though I find this information to be valuable. And I just try not to make those conversations, personal ones. Yeah. My direct answer would be, you do have the time, you just need to make it because it's very important to your business. You just don't see that yet.

Val (26:52):

Yeah. So time and money are like number one reasons that people cancel. And that's where I love to dig in because you are spending your time and your money on other things. So what are those other things that you're doing with your time and your money that are more important in your mind than this product, whether it's your subscription or, um, you know, spending money on, you know, a different food product than the subscription soup service that we have. You know, there's all kinds of options that fill in there. Um, but I think that time and money are surface answers and they're worth digging in on with a few people. You don't have to do it with everybody, but I think it helps your messaging on the front end to be able to, uh, catch people before they turn out. You know, when people, in your case, if people stop opening emails after, you know, if they're not opening four or five emails in a row, that might be an indicator they're going to churn. So then, you know, doing some kind of catching them

Web (2PM) (28:00):

Preemptive work. Yeah. Yeah. That's a very good point. There's a question from Ron for you, Val, I'm going to just read the, uh, the question, cause you're the star here about putting it a little bit late here, so maybe you've covered this already, but what's the best way to actually do these one-to-one interviews. Is there a software to help manage a set of, of these conversations? Yeah. We just send customers, unsolicited email requests. Do you offer them rewards for participating?

Val (28:25):

So I always offer an incentive, um, because they're, you're asking them for their time. Um, and I know I just hate it on Amazon, but I do an Amazon gift card. Cause it's the universal don't incentivize around your product is the only thing. So if you want to figure out something else to do indie bookstore or something like that, that's great. Um, but don't incentivize around your product. Cause then it looks like you're just trying to get a customer back. Um, but uh, I said you can set them up a lot of different ways. I do them over zoom. I

Web (2PM) (28:57):

So like you can do face to face. Yeah. Wow. Now you ever run out of energy, really energetic person. I couldn't do what you're doing right now.

Val (29:08):

I'm not, I'm an introvert. I'm full on introvert. Um, I do all my customer interviews and batches, so I'll do like four or five in a row and I'm on one day and then I don't do any for the rest of the week. Um, so you have to kind of time block.

Web (2PM) (29:24):

So basically what you're saying is if you can execute these strategies, everyone else should be able to as well.

Val (29:31):

Absolutely. Yeah. Um, yeah, for, I have two kids home with me full time. Uh they're little too. They need lots of attention. Um, I'm introvert and uh, and I don't really like talking to people, but I talk to people all day,

Web (2PM) (29:48):

You know, I'm very similar. Um, I don't like people. Yeah. I'm sort of joking, but I do, I do agree that I have a hard time having conversations all day, every day, especially given the questions that I get on Twitter quite a bit. So yeah, I'm always looking for ways to tweak those strategies so that I could be more honest, forthcoming and useful to the customers that I already have. And then you find some really interesting points. Cool.

Val (30:19):

Yeah. The technology side is like, whatever you want to use. Um, I use zoom and then I record it and get a transcript from, I use rev, but you can use any transcript service.

Web (2PM) (30:28):

So we have a two minute warning that is for me, like anything practical that we can add for the audience before we wrap this up.

Val (30:37):

So one more thing that I would love your take on, and this is the third thing that you can do. That's the hardest, uh, is to build a proper referral program. Um, most people don't, I feel like I see so much of the, uh, give 20 get 20. And that's a popup that shows up on the post-purchase page, like before they've even perceived your product. And I'll say that if you want to see a really good referral program and action, join the email list for bloom, um, Blu, M E here on this screen, they have an incredible, uh, referral program. And like I said, at the beginning, not everything works for everybody, but it's worth looking at and seeing how involved it is and how in depth they go in order to, um, use their, helps their customers be their marketers.

Web (2PM) (31:28):

Yeah. I w I would also add morning, morning brew. Doesn't want to, I mean, it's such an incredible, like it's a, it's a proprietary referral system. Um, they clearly have a passionate audience. They featured one of my articles last week. They just blew up. My site just absolutely blew up my site. So the fact that they not only have volume as far as their email list is concerned, but they have actual engagement is, is nuts. And I would give a lot of credit to them for the referral system.

Val (31:57):

There's a really good article breaking down how their referral system works. I think it's a medium article. You can probably Google some combination of like medium. What is it?

Web (2PM) (32:07):

I don't know. I'll find the article. I've tried to license their software and they've said, no, I'll be fine.

Val (32:14):

I have a key chain and a, uh, wine glass from that. Um, so the one thing that I want to wrap up with though, is that this isn't just theory. This is stuff that real brands are doing all the time. They're killing it at customer retention. Um, and, and you can do it too. So, uh, Einstein said that everything in life should be as simple as possible, not simpler. And that a hundred percent rate applies to retention. I like to, I like to like, and us with Einstein personally, as well as final note. Um, so a couple of things join 2PML, best investment. Um, and then I'm running a incubator for, uh, brand operators who want to do better emails. So you can email me for details on that. We're kicking off in mid July.

Web (2PM) (33:07):

Uh, any other questions just reach out to us about you can go ahead and spit your Twitter handle minus web web. I'll try to get to them today.

Val (33:17):

Yeah, they're on the bottom of the screen and I think I got them on most slides. I might've screwed up some, but it's at Lavelle Geisler at web for both of us. Um, tweet us, talk to you later. Thanks guys. Thanks a ton guys.