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CHURN FM is the podcast for subscription economy pros. Every Wednesday we hear how the world’s fastest growing companies are tackling churn and using retention & engagement to fuel their growth.
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E246 | Optimizing Cancellation Flows to Reduce Churn: Unbounce’s Approach with Tamara Grominsky
Today on the show we have Tamara Grominsky, the Chief Strategy Officer at Unbounce.
In this episode, Tamara shares her experience in optimizing cancellation flows to reduce churn.
We then discussed how Unbounce implemented a data-driven approach to understand the reasons behind customer cancellations and how they tailored their strategies to different customer segments. We wrapped up by exploring the importance of cross-functional collaboration in driving successful churn reduction initiatives.
Mentioned Resources
Churn FM is sponsored by Vitally, the all-in-one Customer Success Platform.
[00:00:00] Tamara Grominsky: And so really we said, we need to better understand, like who are our best customers? Who are the customers that are staying? Who are the customers that are leaving? And so we started a large segmentation project and a large part of that was focused on understanding who was leaving us and trying to decide who do we actually wanna save versus who do we not wanna save? And I think that this is where a lot of companies kind of stumble because they think they need to save every single customer and that's not always the case, right?
[00:00:38] Andrew Michael: This is Churn.fm, the podcast for subscription economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.
[00:00:51] VO: How do you build a habit forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely boosts profit, profitable and growing.
[00:01:04] Andrew Michael: Strategies, tactics and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode.
[00:01:15] Andrew Michael: Hey Tamara, welcome to the show.
[00:01:17 Tamara Grominsky: Thanks so much for having me.
[00:01:19] Andrew Michael: It's great to have you for the listeners, Tamara is the founder of PMM camp and advisor to Klue. Tamara’s previously the VP of product marketing and life cycle at Kajabi and prior to that chief strategy officer at Unbounce. So my first question for you tomorrow is what does a chief strategy officer do?
[00:01:37] Tamara Grominsky: I get this question a lot. And I will say that it really varies depending on the company, but a chief strategy office strategy of a company across different time horizons. So I focus on three time horizons, zero to 12 months. So like, what should the teams be doing this year? One to three years, what should the teams be doing next? How do I start validating those opportunities so that by the time the teams are ready to focus on them, we have the right inputs and then long-term.
[00:02:03] Tamara Grominsky: So, you know, five years and beyond, where do we wanna go? How do we wanna exit this business? What are the other ponds we might wanna be fishing in? And so really my job was to balance across all three of those horizons. But also when I was at Unbounce, I managed several teams as part of being the CSO. So I also have product marketing, customer lifecycle, partnerships, and M&A. So really a lot of the strategic growth teams that would funnel into a go-to market and product strategy.
[00:02:31] Andrew Michael: Well, sounds like a very busy job. Having to look after all those teams and then sort of have to think over those three different time horizons. When it came to sort of the strategic side of that and thinking through like are you balanced your time specifically around those three areas? Like, what would you say the breakdown was in terms of time and effort going into the planning and thought process behind the different time horizons?
[00:02:56] Tamara Grominsky: Yeah. So ideally the first time horizon should be the one that I spend the least amount of time on, because if we've given the right level of direction to the teams, that's where the team should be living. So I thought about, you know, the directors and VPs that are org, they are really the ones that are empowered with building and driving the 12 month strategy. And I would kind of be there as a consultation. So, you know, a decision had to be made like, oh, we want to make this decision.
[00:03:20] Tamara Grominsky: Would that, you know, prevent us, is that a one way door decision for our next one to three year strategy? But I wasn't as involved in actually executing the 12 month strategy. I would say I spent probably 40, 50% of my time on that one to three year time horizon, about 25% of my time on the three years, five years and beyond. And then the remainder on that one, like a zero to 12 month time horizon.
[00:03:47] Andrew Michael: Nice. And what sort of stage was the company at when this role was introduced? Like this year, so like how big was the org? What did it look like?
[00:03:55] Tamara Grominsky: So as I mentioned, this was at Unbounce. We were about 10 years old when I actually joined Unbounce and I joined as the head of product marketing, not the CSO. At that time, we were fully bootstrapped. We were just over 100 employees. And in that first year of me being there and leading product marketing, we actually made the decision to go and raise money. So we raised a large round private equity and that really was what kicked off us needing a longer term strategy.
[00:04:23] Tamara Grominsky: We were very much just focused on like, short term, short term, short term. And then we're like, okay, if we're gonna raise a massive amount of money, if we wanna build the future of this business, we need to know what that future is. And so I was heavily involved in the process to build the strategy that would raise us the money. And then once the money was raised, then I moved into that strategy role. By that time, we had about 200 employees and we raised, I think, $25 million. Yeah, so it was a pretty good raise and it gave us the money we needed to actually start to execute on building the future.
[00:04:56] Andrew Michael: On the future. Yeah. It's interesting as well, like just drawing some analogies to Hotjar and sort of timing as well. And I remember like I joined hot show when there's around 20 team members. I think it around 80 when we got to around 80 team members, I remember we started going through an exercise and we were really sort of like, at that point, David was really trying to think about the future because up until that point, it was like, let's just get the now and make things work.
[00:05:17] Andrew Michael: And then we really started shifting our thought process in terms of like, where was the market moving and I remember quite clearly as well, one of the things that I loved and it made me sit back quite a bit to us. We're going through an exercise. We'd done it originally like this ideal customer profile work and we defined who that was. And this third party consultant came to us and just sort of said, well, the ideal customer profile that you defined today is a direct reflection of the marketing that you've done up until now and the product that you've built.
[00:05:43] Andrew Michael: But it doesn't necessarily represent the best opportunity for your business going forward long term. And that was sort of like when you put the like, opened my eyes and sort of said, okay, let's start thinking about this. Like where is the market moving? Where is the opportunity going? And another one, I think it's like [Keaton Schar] on the show mentioned it. He's like, product market fit is a moving target and you always got to be chasing after it.
[00:06:03] Andrew Michael: And if you're not thinking ahead of time and where things are going. So it seems like similar timing where this sort of kicked in and became a priority for the company and started to think. And then I think now obviously at this stage Hotjar's has grown to four or 500 people, maybe more. And yeah.
[00:06:18] Tamara Grominsky: That's true. And I think one of the other important things that were happening at this time was that as part of the raise and moving to private equity, our co founders were stepping away from the business. And they were really what drove the first 10 year strategy. And to your point, they had a very specific ICP in mind when they started. And sometimes you actually need to remove yourself from that and let a new round of folks come in have a different vision or a different strategy to really think bigger than maybe what you were thinking originally.
[00:06:46] Tamara Grominsky: And so that was exactly what this kind of role entailed? Like what markets should we be serving? What markets are growing fast? Where are we well positioned to win? Or what do we need to do in order to win an interesting market, right? And so we worked really heavily with the product team as well to be like, how will this change our product roadmap to make sure that we can actually win in that market, you know, two years from now, three years from now? What do we need our value propositions to be in the future?
[00:07:11] Andrew Michael: Nice. It sounds like a very, very similar story because also at that time, I think David was also starting to think about like an exit strategy for himself personally and how to bring in new leadership. So it's sort of like the trends map against both companies. Very nice. So today as well, we're just discussing before the show will be interesting to chat about, and you mentioned that there was something interesting in the work that you did at Unbounce when it came to the cancellation flow. So I'm keen to hear a little bit about that. Maybe you can just set it up for the listeners. Like what was this project and what was the goal?
[00:07:43] Tamara Grominsky: Sure. So really our focus at Unbounce when I came on was about building sustainable growth. And so we really didn't have a growth model that we could rely on, right? And particularly we needed to move the needle both acquisition and churn. And so what we did was we created pods that would focus on each. We made sure that they were connected. So we had a full lifecycle strategy, but we actually had subject matter experts that would either focus top of funnel or later in the lifecycle stage.
[00:08:13] Tamara Grominsky: And as part of my role, as I mentioned, I manage both customer lifecycle, as well as product marketing. And so I think we were able to marry really the best of both teams to build a strategic, but highly executed and iterated on program. And honestly, the main insight that drove this program for churn was that we didn't really understand why people were churning. Like most companies who are, you know, maybe more self-serve, if you haven't used Unbounce as a landing page builder, you can start your own trial for free.
[00:08:43] Tamara Grominsky: You can cancel on your own. You don't need to go through an account manager. And so people could cancel whenever they want. It was a month by month plan. What we did have in place was you would select from a dropdown, one of the reasons for cancellation. They were so high level though. It was like price. I'm not using right now. We've all seen this before. And so we had so many different charts that would show, well, most people are leaving about price, but then we would look and our competitors were actually charging more money so we knew that the market could withstand a higher price.
[00:09:13] Tamara Grominsky: And so really we said, we need to better understand like who are our best customers, who are the customers that are staying, who are the customers that are leaving. And so we started a large segmentation project and a large part of that was focused on understanding who was leaving us and trying to decide who do we actually want to save versus who do we not want to save. And I think that this is where a lot of companies kind of stumble because they think they need to save every single customer and that's not always the case, right?
[00:09:42] Tamara Grominsky: And so to give you an example, we started seeing, well, there's some customers who had hit cancel and they've been really active in the app. They were building landing pages. They were optimizing those landing pages. Those are customers we want to save. Like they've clearly gotten an extracted value from events in the past, we want to make sure that they continue to do so. But then there'd be other customers who had signed up, had never used the product, and then we're hitting cancel. It's like, do we need to save them? They're probably not where we want to put all of our effort and energy.
[00:10:12] Tamara Grominsky: So what we did was two different things. We started to build cohorts of customers who were coming to cancel, and then we started to build really customized programs based on both who those customers were and the reason for canceling. So we started by updating the reasons for canceling. So now when you hit cancel, we have a whole new page. We actually use a really great tool called BrightBack for this. It's a funny name, BrightBack, but it actually stands for Be Right Back. Like I'm not gonna cancel. And we were lucky to get in as one of their early customers. And so they worked with us to build a lot of their product around some of our strategies, but it was super simple.
[00:10:53] Tamara Grominsky: Now they land on a new page and we had a clear, crisper cancellation reasons, but we could also see a ton of different facts. We could see the tenure of this customer. Had they been with us one month or 20 months? We could see product usage. We could see by spend. We could actually tag it by a bunch of other things like were they in a target segment or not? And then what we started to do was started to pair who that cohort was with their cancellation reason with the right offer. And the offer doesn't always mean like a price offer. So sometimes we would serve up, hey, if you said, oh, this is complicated, or I don't quite understand how to use it, we would offer them the ability to have a free session with a CSM where we would build it out with them. If someone did say price and we had Intel that they had been a paying customer for a while, we would give them a special offer. And so we started to build very, very customized programs. And we iterated on this for months at a time to get the right formula.
[00:11:58] Andrew Michael: Very interesting. I want to go to the start of this then as well. Like obviously you mentioned like one of the things we've all seen that before those exit surveys were like, what is your reason for canceling? And you had something similar to that to start. How did you go about then, like when you decided to work on this, diving into those reasons and coming up with that initial list that was going to be improvement of the past that you had?
[00:12:19] Tamara Grominsky: Yeah. So first of all, we took the list and we actually did a bit of an audit of who in the organization is using this data. Because what I didn't want to do is I didn't want to blow this up if someone was actually making real business decisions based on this. Turns out it was very few people, but I like to mention that because sometimes we think, oh, this is just some random form, we can change it, but you never know where that data is being piped into, right? And who is using it and what decisions are being made. So we started there.
[00:12:48] Tamara Grominsky: And then we just started to tease out what we would actually want to know. And so the price question, for example, it's like the price is too high, I think was what the price said. And we're like, is the price actually too high or is it that they're not seeing the value from the product? If they saw value from the product, they might even be willing to pay more. And so we started to tease out like, okay, there is going to be a group of people for whom this price is not right.
[00:13:14] Tamara Grominsky: There is going to be a group of people for whom the price would be right if they could find the value. And then we also started to tease out for that question around, it was almost a combination of the not using right now and the price is too high of, was there an opportunity for us to like park an account? Because what we learned throughout this analysis was that folks who are churning, they love Unbounce. They were using us.
[00:13:37] Tamara Grominsky: So we saw that they were with us for many, many months. But then as you know, sometimes marketing campaigns can be seasonal. You don't always need a landing page. And so people would be like, I just want to cancel for three months and I'll be back. But we didn't know that because we weren't asking the right question. And so we started to tease that out a bit more. A lot of it was honestly common sense. We did do a bit of an audit of like what other best in class companies were doing.
[00:14:01] Tamara Grominsky: And then as I mentioned, we were using BrightBack, the tool and their team were definitely helpful in providing some suggestions there on how we might frame things. And then part of it was just like experimentation. Like we we would update the list, we would see how people would answer it. And if one of the questions was never being answered, then we would get rid of it.
[00:14:21] Andrew Michael: Nice. And so you started there sort of updating that side of it. You mentioned integrating with BrightBack. Can you be a little bit more specific as all like the types of data that you were sending and how they were actually being used then? So obviously one is the response and then you mentioned things around like how long they've been a customer, the engagement level. So maybe talk us through one specific, like if you want to call it, Be right back or whatever it is, flow that you had for a target segment audience.
[00:14:49] Tamara Grominsky: Sure. Yeah. So we had a couple of different triggers, but I'll use tenure as an example. And we were, even before I get to this, we were trying to optimize for two things. First of all, we wanted to decrease churn rate, but we also wanted to increase save rate, which I don't think a lot of people talk about save rate enough. Save rate is basically the percentage of people who hit the cancellation flow and decide not to cancel. Right? And save rate is really important to measure when you're running an experiment like this, because it's a direct outcome of the work you're doing.
[00:15:21] Tamara Grominsky: Because if you're just measuring churn, it's a bit of a lagging indicator and there's so many other factors. So we're specifically trying to measure save rate here. And so for one of our flows, we would say, are you in trial? That would be one 10-year option. Are you in the first three to six months of your tenure with us? Or are you post six months. And that was kind of the first filter that someone would come through. If someone said that they were in trial, we were very unlikely to give them like a monetary option, right?
[00:15:54] Tamara Grominsky: Because we knew that like their LTV was very low at this point, we probably still were trying to pay off TAC, let alone give them more free dollars versus if someone was in the over six months, 10 year cohort, then we were much more likely to give a financial offer to them. Whether that be a discount on their plan or even just like two months free of their plan, whatever it might be. So that was kind of an example of how that might work.
[00:16:21] Tamara Grominsky: And so to give you an even clearer example, imagine someone who was in trial or someone who was in the first three months went through they landed on this page, they selected it's too high of a price. What we might do instead was say, oh, we'll give you an extended trial. Why don't you get another two weeks free of a mouse? We had a 14 day trial at the time. But if someone had gone through that exact same flow and they were, say, 12 months old with us and they hit the prices too high, we would say, try three months at 50% off, like redeem now.
[00:16:55] Tamara Grominsky: And we actually even tested what all of those offers were. So we practiced or we tried free trials. We tried a whole month off. We tried a discount off of multiple months. And what we found was that for different cohorts of customers, they each preferred different things. And so literally by the end of this program, we had like dozens of different cancellation flows. So it was not the same experience for everyone.
[00:17:20] Andrew Michael: I like that a lot as well, because I think one of the things that concerns me a lot when doing these sort of cancellation flows is that you end up getting a tweet on Twitter and it's like, hey, by the way, if you want to save some money on your subscription with the unbalanced, like just go and cancel, you're going to get 50% off for three months, but having this very specifically based sort of on their tenure, as you mentioned on the revenue, on the engagement rates, it really becomes then about like the activities focused on the audience who you're serving and you get an understanding of sort of how valuable that customer is to you already and how you go about telling them.
[00:17:53] Andrew Michael: I also like the save rate that you focus on, as you mentioned, sort of like turn rates are lagging metric. There's a lot of other things that have led to that moment in time that they're arriving at these exit flows. When it came to save rates, I was interested, did you see any sort of difference in terms of the save rates you were seeing between tenure or between any of the different segments that you were tracking?
[00:18:12] Tamara Grominsky: Yeah, we did. And one of the things I loved about... You could build the staff for on your own, but because we went with this tool, it was like super easy. We could actually calculate the save rate overall, and then we could start to filter down by 10 year. We also had it by customer segments. So we had agencies were one segment. We had marketers as one segment because they use the product differently. We had our self-serve accounts versus our enterprise accounts. We had a ton of different levels.
[00:18:40] Tamara Grominsky: And I think unsurprisingly, people who have been around longer, we would have a more successful save rate, right? Because we already had, they already have mostly seen the value of the product. We were usually able to offer them a more compelling offer because their LTV was higher. Like cancellation rate in trial is high. That's kind of what to be expected with a free trial.
[00:19:01] Tamara Grominsky: And so for example, when we were really focusing on optimizing for churn in free trial, we were focusing a lot on like onboarding rather than say, assuming that the cancellation flow would really be the thing that saves them, if that makes sense. But nothing too crazy that you wouldn't expect. It just allowed us to really understand where we wanted to double-click in. That was why for us, we had all of those different lifecycle team setups.
[00:19:28] Tamara Grominsky: We had the activation team, we had a separate engagement team, and then this retention or resurrection team, as we called them. We were able to say, okay, team, you focus on trialers, we'll make sure the cancellation flow is updated. But really by separating the flows, it just meant that we could spend way more time on building better and more flows for the late 10 year customers.
[00:19:50] Andrew Michael: Yeah. Now, I think like one of the things that's the first place is most people think about when looking at churn and retention is like, okay, let's go ask people why they churning while they're leaving. I think the thing we talk a lot about on the show really is like the biggest impact you can have is focusing on activation and getting more people successful because ultimately it's very difficult to turn things around at the end when somebody's made that conscious decision to cancel their subscription.
[00:20:14] Andrew Michael: But I really liked sort of like how deep you went into this cancellation flow and really try to understand the pain points of users and from that point, I see a way to save them at the end of the day. What are some of like the key takeaways that you got from this exercise? And obviously it sounds like you worked over for like several months as well to get it to the point where you felt comfortable with it. What were some of the key lessons and the main outcome that you had with it in the end?
[00:20:39] Tamara Grominsky: Yeah. So I think one of the main lessons is that this needs to be cross-functional from the beginning, because in order to drive change, you're going to need to have buy-in for many different teams. So we need obviously someone from marketing, someone from sales, someone from product, even someone from like finance or commercialization if you want to move quickly. So, not just by implementing it in the product, but we wanted the product team to be on board because some of the cancellation reasons we could only solve by building product solutions. And so by having the product team involved in this whole process, they were really able to like see and have empathy for the customers, which meant that we got these items on the roadmap so much faster.
[00:21:21] Tamara Grominsky: And then same thing with the finance team, we were able to come up with these financial offers really quickly because they were involved from the beginning. So that's number one. And so I always say build a cross-functional squad that has one goal, one KPI that they're all focused on. And then they can all bring their subject matter expertise to that.
[00:21:38] Tamara Grominsky: The second one is really experiment and iterate. Like there's no way we would have designed the final flows without starting with our first basic flow. And so give yourself time, but like iterate quickly. Don't get too committed to the idea. We learned a ton of lessons along the way about like what offers worked or didn't work. You know, we were convinced that if we gave like two free months away, it would be the most compelling thing.
[00:22:02] Tamara Grominsky: But what it was actually more compelling was giving a percentage away for a longer period of time because they felt like the benefit was extended longer. But we never would have known that if we didn't experiment, right? So I think build an experimentation backlog. That's the best way to get everyone's ideas on the table, make sure everyone feels like their voice are heard. And then you can start to prioritize what some of those experiments might be.
[00:22:24] Tamara Grominsky: And then the third one is don't expect this to be a silver bullet either like churn is hard. That's the whole point of your show, right? But I think this can be a really great way of moving the needle and feeling like you're taking action against churn because so often it feels like it's impossible to churn or to change the winds of churn. So I think you will make progress with this, but it's not going to solve all of your churn issues. Those are kind of the lessons we got from it.
[00:22:54] Tamara Grominsky: The main outcome I think was successful in two ways. First, we were able to move the needle on save rate quite significantly. And for very particular cohorts, which was great, we were also able to identify the cohorts where we weren't able to move the needle on. And this actually led to more kind of product and customer research where we're like, okay, we've tried everything and offer isn't working. We're seeing people continue to churn.
[00:23:20] Tamara Grominsky: One of these areas was product functionality. And so one of our answers was like, the product doesn't have everything I need. And so what we ended up doing, we started by testing, oh, book a one-on-one session with a product manager that didn't work. And so what we ended up doing was doing a full series of research around what actually is the missing product. And is this even a target market that we want? And it turned out that for the most part, this wasn't an audience we could serve. And so we just accepted that that was going to be acceptable churn for that answer.
[00:23:51] Tamara Grominsky: And then the second one was just internal learning. So we all learned so much more before the beginning of this project. No one knew why anyone was churning. We kind of had a pie chart that we looked at sometimes, but it felt impossible to move the needle. And the pie chart always had to discuss, was like so vague, versus by having this cross-functional team that was like in the weeds every day. We learned so much about our customers. We learned so much about our product. And just about how to communicate the value of the product. So I think internal learnings that then flowed over to other initiatives within the business was also an amazing outcome of this project.
[00:24:25] Andrew Michael: Yeah. It's funny. I was laughing now because sort of that pie chart that lives in a lot of organizations that everybody, so these are the reasons for that. Nobody really understands them or, or how to do anything about them. And I think one of the lessons I loved as well on the show was from Emeric Ernoult from Agorapulse. And at some point sort of, they did this analysis and he sort of said, okay, like people often set these arbitrary goals and trying to reduce churn. Like we're going to reduce it by 10% to 15%, but they don't really know what are the main drivers and what's actually within your control as well.
[00:24:54] Andrew Michael: So like in your case, I'm probably, it's probably similar for unbalanced, but in the water pulse, small businesses going out of business was a big reason for churning, there was like nothing that we're ever going to be able to do about that, but they were still trying to measure themselves against that. And these sort of say, okay, makes no sense. Like let's figure out what is sort of the churn that we can control and then set a target or goal against that. And stuff that we can't control, let's just forget about that for now because there's nothing we have in there to fix it.
[00:25:18] Tamara Grominsky: Totally. And I think that kind of triggers another thought for me, which was one of the other best outcomes of this was that we started to funnel insights from the end of the funnel back to the beginning of the funnel. So, for example, the more insight we had on who would leave us, we could funnel that back to the acquisition team so that they could do a better job of not getting those customers and getting more of the customers that would stay with us. It's like very basic product marketing. But again, so many businesses don't do the research, she even understand that.
[00:25:45] Tamara Grominsky: And so to your point, like we had a group of customers who would leave, who they kept saying price was too high, but they would only pay $20 a month. Our products started at like 80. So we're like, we're never gonna close that gap. And we're like, okay, that ICP is never gonna win for us. So like, let's make sure we're not attracting them with our ads or our marketing content. Yeah, so very powerful.
[00:26:07] Andrew Michael: I'm going full circle on it. Yeah. You mentioned experimentation then as well, being a big part of this process. And obviously we, I think experimentation is used very loosely in a lot of places and a lot of times. So I'm keen to hear a little bit about like, what would some of the type of experiments that you did ran, like how would you understand when to change in one flow versus another, and were you testing flows against each other? So what did experimentation look like in this context?
[00:26:31] Andrew Michael: Because you'd hope as well, sorry, just for a period, you'd hope as well, like churn isn't at extreme numbers where you're having like thousands of people churning. And like, so I'm wondering like how you would run experiments to get statistical significance in a space like this?
[00:26:44] Tamara Grominsky: Yeah. So again, because Unbounce is a self-serve tool focused on small businesses and marketers, we did have a very large customer base. So I would say we did have numbers to experiment, but not necessarily as we've gone to the granularity of each specific offer for each specific reason in each branch. And so when we started experimenting, we started experimenting based on a few variables, tenure or just based on cancellation reason. We did have a data, we have a large data science team amounts, and it was run by the time by a string theorist.
[00:27:21] Tamara Grominsky: We have truly the best scientists in the business, which was amazing. I mentioned we had a cross-functional team. One of them was someone from the data team who did help guide our experiments methodologies. But it was, I would say, a tenuous conversation sometimes where we would say, well, how statistical significant does this need to be? Can we just get a signal?
[00:27:42] Tamara Grominsky: We were always having those questions back and forth. We never really tested more than one flow against another flow. It was always like an A/B test. It wasn't like an A-B-C-D test, but some of them would take months for us to get the result back on. And then it just depended on... We focus on like the largest cohorts and the largest reasons to kind of speed up time to results.
[00:28:05] Andrew Michael: Time to results. Yeah. And like, like you said, as well, I think like the confidence level, especially with experiments at this late stage in the funnel, because there's no real major consequences after the step. Like it's they've turned and they've gone. It's not that they're going to think. I think you can afford to like run experiments with a lower confidence level and call them a win at the end of the day as well, depending on the volumes.
[00:28:26] Tamara Grominsky: And I think there were times where it'd be like very murky and we're like, oh, we're clearly not moving the needle. But then there'd be times where we're like, wow, this is way better. You know? So we kind of just went with it sometimes.
[00:28:42] Andrew Michael: It's not like you're doing something at activation that's going to impact like the customer lifetime and their experience forever. It's something that's like, okay, they're either going or they're staying. And like, that's sort of the two options at this stage.
[00:28:54] Tamara Grominsky: Exactly.
[00:28:56] Andrew Michael: Nice. You mentioned something as well earlier on, like the customer segments and you mentioned a few different ones. And you also mentioned around like the pausing aspect of the thing. And when you mentioned agencies, like sort of that triggered that brain thought to my brain, cause I think this is something as well.
[00:29:10] Andrew Michael: Similarly at Hotjar, we saw where it was like the project finished and this typically came from agencies where they're working with the clients, project finished, they paused or they wanted to pause, but they had to cancel. Was this something you saw from an agency perspective or was this sort of across the board with customers?
[00:29:27] Tamara Grominsky: I would say it definitely was broader than agencies, but definitely more pervasive with agencies for sure. And so we try to, it's hard because agencies were an important segment for us, but also not the largest market. So it's like, how do you balance your time? There's so many things agencies wanted that we couldn't prioritize, but we did try something where we said, okay, what if the agency handed off the account to the client after?
[00:29:55] Tamara Grominsky: Or what if instead of the agency signing up for the account, the client signed up for the account and then we linked it to an agency's partner account, if that makes sense. So we did try to mitigate churn that way, a couple of different strategies, but it's hard because as you know, agencies have very specific workflows and each agency has a different workflow. And so you kind of have to work within their world.
[00:30:20] Andrew Michael: Yeah. I think they're very good early adopters as well, like agencies. But then as you say, like over time, the market is not extremely big. And the level of things that you need to build to sort of service them to a degree is not really widely applicable as well. Like a lot of the feature sets that they require don't apply across the board. So it really comes down to that idea, like figuring out who's the ideal customer profile and do we want to be prioritizing. And at some point, even though they make a big percentage of the business, like sort of the internal discussion is okay, we really need to start focusing in other direction.
[00:30:53] Tamara Grominsky: That's exactly it. It's like, whenever you have any multiple ICPs, it's always like, okay, do we go all in on one ICP or do we do just enough to keep, you know, all of those ICPs? And that was definitely one of the struggles we had. That conversation was a recurring one.
[00:31:09] Andrew Michael: Nice. Yeah. We talk a lot about ICPs on the show and to define them and best practices, but I'm keen to hear your perspective as well on this, like at a high level, like maybe let's start off like, why do you think ICPs are important?
[00:31:24] Tamara Grominsky: Yeah. For many reasons, but I think the number one reason is that it gets everyone focused on the same thing. I often say to companies, it doesn't even matter who your ICP is. As long as you're all focused on it, it is better than you having, you know, a couple ICPs that only have a few people are focused on. I think people over-focus on like they are too afraid to say yes to one market or no to another market. But I always say like most companies I go into or talk to product marketers who are out and like if you ask 10 different people across your company, who are your best customers, you'd get 10 different answers.
[00:32:01] Tamara Grominsky: And that's alarming, right? Because then you have marketing content being built for one ICP, you have onboarding flows being built for another, a product roadmap being built for a third, like you're never going to be able to align vectors and build momentum that way. So the number one benefit is alignment. But when you get alignment and you have the right ICP, meaning it's a sizable market, it's a growing market, it's one where you can win and be differentiated in, it's one that like your product is set up to deliver the value, then that's when really things take off, I think.
[00:32:34] Tamara Grominsky: And it starts to guide all of your strategic decisions. And so a solid understanding of your ICP should guide your product roadmap. It should guide your marketing channel strategy. It should guide your three-year business strategy of like, do we want to be strategically acquired by a business? Do we want an IPO? It should guide the types of employees you hire, right? We want to hire employees who are passionate about serving this target market.
[00:32:57] Andrew Michael: Yeah. No, for sure. I think the alignment for me is like the biggest key piece. And I think as well, when it comes to channel retention, having a solid understanding and having that alignment, it's probably one of the biggest influencing factors that you can do to reduce channel retention is like, if everybody really understands like who they're serving, what the pain points are and how we deliver value to them.
[00:33:18] Andrew Michael: I mean, that's what it is at the end of the day, when it comes down to channel retention is delivering value to customers. They came to you for a reason. They had a problem if you can solve that problem. And the problem with not having a clear focus on who the ICP is, is that you're off in many different directions and you sort of diluting the impact that the business can have and everybody can have as a result.
[00:33:35] Tamara Grominsky: Exactly.
[00:32:36] Andrew Michael: What's one thing that you know today about churner attention that you wish in you when you got started with your career?
[00:33:43] Tamara Grominsky: I think that number one thing I know now is that not everyone is worth saving. I kind of touched on this earlier, but I think earlier in my career, I was like, we need to get churned down to zero, you know, or everyone who is churning, we are weighing equally. And that's not the case. And I think the more that you can get clear on who are the most important segments and customers to save, the more you can actually prioritize those strategies and move the needle. And I think a lot of people, especially executives have a hard time saying, we're okay to lose those customers. But I have seen that when people do say that it actually can be very powerful.
[00:34:20] Andrew Michael: Yeah, absolutely. As a product market or lifecycle marketer, what would you say are like the areas where you can have the biggest influence on trend and retention? So for those out there listening or product marketers or lifecycle marketers, like what are some of the areas of the business they can be thinking about to have an influence on trend and retention and what could be some potential quick wins as well for them?
[00:34:42] Tamara Grominsky: Yeah, a couple. So first one is just positioning the value. I think oftentimes we think about value being positioned the same for everyone, but especially when someone has already used your product, we can start to position that value differently and we have inputs about like who they are, how they've used the product, again, what cancellation reason maybe we know. And so even just creating value propositions for each of those different cancellation cohorts, really great, easy win and starting to test some of that messaging.
[00:35:11] Tamara Grominsky: Another one is just the channels that you can use. So oftentimes like product will be focused on building products that will decrease churn but it can be as easy as sending the right message at the right time. So in-app messaging using tools like Pendo or Appcues, building cancellation flows if you don't already have flows built, even working with like the support team, right?
[00:35:35] Tamara Grominsky: So lots of people call in to cancel, not even knowing how to cancel in-app, making sure they're armed with the right value propositions, the right offers that they can deliver. Those are two really great easy wins that most people don't wanna work on in the business and so you're not really competing for effort there.
[00:35:52] Andrew Michael: Very nice. Very cool. Well, tomorrow's been absolute pleasure chatting today. I'm sure we could continue discussing this topic for hours, but I want to be conscious of time as well. Is there any sort of final thoughts you want to leave the listeners with today before we wrap up anything they should be aware of maybe to keep up to speed with the work that you're doing?
[00:36:08] Tamara Grominsky: Yeah. I mean, I think really the heart of product marketing and the heart of all of this work is better understanding your customers. So I'd say, you haven't spent time doing that. Just get on the phone with five customers. It's going to change your life. And it becomes quite addictive. But yeah, if anyone wants to follow along on what I'm building or the content I create following me on LinkedIn is the best place to do that. I'm the only person in the world with my name, so it's easy to find.
[00:36:34] Tamara Grominsky: And then I also run a business called PMM Camp where I create content. I have a weekly newsletter all focused on how to take product marketing strategy and apply it in a practical way. So that's another great place to stay up to date on some content.
[00:36:47] Andrew Michael: Amazing. Well, thank you so much for joining today. And for the listeners, everything we've discussed will be in the show notes so you can find that there. And Tamara, just thanks a lot for joining. I wish you best of luck going forward into the new year.
[00:36:57] Tamara Grominsky: Thanks so much for having me.
[00:36:58] Andrew Michael: Cheers.
[00:37:02] Andrew Michael: And that's a wrap for the show today with me Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with churn.fm and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting churn.fm. Also don't forget to subscribe to our show on iTunes, Google Play or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to Andrew@churn.fm. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.
