CHURN FM
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.
CHURN FM
E254 | Reactivation Tactics: Transforming Cancellations into Customer Retention Opportunities with Baird Hall
Today on the show we have Baird Hall, the co-founder of Churnkey.
In this episode, Baird shares his experience in developing effective reactivation campaigns and the importance of segmentation in retention strategies.
We then discussed how small changes in retention tactics can have a monumental impact on high-volume subscription businesses, and the role of dynamic, personalized cancellation flows.
We wrapped up by exploring Churnkey's evolution from a tool-based approach to a comprehensive retention platform, and the future of AI-driven churn prediction.
Mentioned Resources
Churn FM is sponsored by Vitally, the all-in-one Customer Success Platform.
Course: How to find your Ideal Customer Profile 'ICP' in B2B SaaS
[00:00:00] Baird Hall: Segmentation when it comes to retention is really important. Making sure that you're not, you know, giving a 20% offer to canceling, to all canceling customers is great, but what's really great is segmenting your cancellation flows or your activation campaigns based on how customers have used the product. Did they officially, were they ever activated at one point? If they weren't, then we need more aggressive offers.
[00:00:00] 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.
[00:00:00] VO: How do you build a habit-forming product? We crossed over that magic threshold to negative churn. If you need to invest in customer success, it always comes down to retention and engagement. Completely bootstrapped, profitable and growing.
[00:00:58] 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.
[00:01:09] Andrew Michael: Hey, Baird, welcome to the show.
[00:01:11] Baird Hall: Hey, Andrew. Thanks for having me.
[00:01:12] Andrew Michael: It's great to have you for the listeners. Baird is the co-founder of Churnkey, which helps supercharge your customer attention with personalized cancellation flows, reactivation campaigns, failed payment recovery, and more. Prior to Churnkey, Baird was the co-founder of Wave and Zubtitle. So my first question for you today, Baird, is since starting Churnkey, what has been the most surprising thing you have learned about churn and retention?
[00:01:37] Baird Hall: The most surprising thing to me is this might sounds simple, but sometimes the simplest things are the most surprising. It's just how important the details are at scale. So we generally work with high volume subscription businesses. So these are lower price, lower LTV, in the hundreds of dollars range. So a lot of these businesses have a lot of subscriptions. And we have seen things like very small copy changes in failed payment emails make a large difference in recovery rates. We've seen how you structure your from emails on failed email campaigns make a really big difference.
[00:02:14] Baird Hall: How you, whether or not you include emojis and how you kind of structure the email to incite a little bit of FOMO to encourage action is definitely been the most surprising thing. And it makes sense because every little piece of your retention strategy matters, but sometimes when the numbers get to a certain point, everything matters. So yeah, it's how important the details are at scale.
[00:02:36] Andrew Michael: Yeah, I think it's like in the early days as well, when you're just getting started, you don't really have the volume to know and understand what the changes, the impact of the changes that you make very early on, like you can't really do any good level of experimentation because you'll never have the data for statistical significance, but then slowly as companies grow and scale over time, it almost gets to the point where everything becomes an experiment and everything, every little detail that you make changes can have a really, really big impact.
[00:03:05] Andrew Michael: And I think a lot of times like you hear in growth when people knock this, like, I don't want to experiment and change the button color. Like you shouldn't do experiments to change the button color, which probably you should never do experience at Churnkey. But as you said, like at certain size and scale, like small differences can have monumental changes for the business. And it's really super interesting that you see that on Churnkey front.
[00:03:26] Andrew Michael: Churnkey's evolved quite a bit. Actually, we had your co-founder Nick on the show about a year and a half ago, maybe longer even. I see since then, like the product has evolved quite a bit. What's been the motivation behind that evolution of the product?
[00:03:40] Baird Hall: Yeah, we originally started with cancellation flows, which is where our churn fighting history really started with our previous SaaS businesses that were, we had scaled those up to seven figure ARR, both of them, but our churn was in the 10, 15 plus percent range, which of course was hurting our company valuation anytime somebody was interested in looking at it. And so we originally started with building cancellation flows, making them very dynamic, personalized, and figuring out the right order of events, the right copy that needs to be delivered.
[00:04:14] Baird Hall: And cancellation flows are great, and they still are our flagship product. But because we connect, we're partners with a lot of payment processors, namely Stripe, as most of our customers are using that. We've just been so connected with our customers because we really are at the heart of their subscription data with the billing platform. We have learned that customers really want a lot of, there's a lot of different churn fighting tactics out there for high volume subscription businesses. And there's really no reason to have them in separate platforms.
[00:04:45] Baird Hall: So we've been really working over the last two years to go from a tool-based approach to a platform-based. And so the next natural evolution was adding failed payment recovery within Churnkeys so that not only are we preventing users from canceling but for the ones that are falling off because of involuntary churn, we have a failed payment campaign. Most people know the term dunning. It's a kind of old term for the process of sending out dunning emails.
[00:05:11] Baird Hall: And then we've kind of slowly been working our way back in the life cycle on trying to predict churn before it happens using machine learning and a lot of analyzing billing and product data. We've been working with some of our customers on that. And then our latest product is reactivations. And this is really where we've been moving of being just reactive to the point of cancellation to really trying to bring in lifecycle marketing strategies into the retention stack.
[00:05:39] Baird Hall: So a lot of businesses, a lot of this churn is unavoidable. And a lot of people, I think this is probably really helpful for a lot of listeners is we are talking to a lot of companies, they have no clue what their reactivation rate is. They have customers canceling, they have some of them come back and sign up, but there's been no understanding or strategy to try to connect those two events, even though it's happening naturally for a lot of businesses.
[00:06:03] Baird Hall: So that's kind of been our area of focus as of late is building out a reactivation campaign product that emails customers based on why they canceled and then gives them a one-click reactivation back into the product, back into their previous subscription. A lot of details on exactly how the mechanics there work, but that's what we've been working on lately. So it's really, it's gone from a tool-based approach to full retention play for really trying to support a full strategy to our high volume customers.
[00:06:34] Andrew Michael: Yeah, that's nice. I think the reactivation side of things, very interesting. I was actually listening to another podcast and they were busy discussing this week around the churn numbers of the, what do you call them? Streaming services like Netflix and Hulu and all these sorts of things. And they were like mentioning the churn numbers and how extremely high they were. But I think the thing that they failed to like take into consideration was actually the reactivation of those users.
[00:07:02] Andrew Michael: And even though they may be churning it like 10, 15% a month, the audience is so big and the number of reactivations that are coming back are fueling that. It is quite difficult for most businesses, I think, to be able to measure and understand that. I know that the early days as well at Hotjar, we had a similar issue where we were dealing with agencies. They would use the product very periodically where they maybe have a client, they would start using, paying, they would cancel, but then they would come back again like six months later. It hurt the bottom line when it came to the churn number and retention, but actually it drove and fueled growth on the other side.
[00:07:38] Andrew Michael: It's an important thing to understand for some businesses as well, where you have like maybe high volumes of churn. If you do have high volumes of reactivation as well, then it sort of counterbalances the negative effects of churn as well.
[00:07:52] Baird Hall: Yeah. I think a lot of businesses, they, A, might not know their reactivation rate, but there's probably, if you're in that high volume, again, that lower LTV range, you probably are having some amount of reactivations happening, which is good that you can look back and see how predictable it was. And then again, if we find a metric that's predictable, that means we can start making experiments and changes to try to increase that metric, which plays into your full retention revenue reporting.
[00:08:18] Baird Hall: And so generally what we've seen kind of in the past, just staying on the top of the reactivations, because I personally think that this is a large untapped area of revenue operations for subscription businesses that every time we talk to customers, we're uncovering more and more opportunity. And generally what everyone has been doing is when customers cancel, they kind of get put into a kind of a newsletter cadence call it. It's a regular email campaign that's going out to previous customers or previous customers are included on this and its content, its engagements, not super strategic as far as the delivery, but putting a lot of content on there in the hopes that, okay, well, if a customer's ready to come back, at least we'll be top of mind.
[00:09:03] Baird Hall: And maybe when they realize, oh, I have this use case again, they'll come back to us because we've been sending them emails, which again, for a lot of things that we do, if customers are doing that, that's way better than nothing. But the kind of realization that we had is we have all this amazing data on why customers are canceling, because they go through our cancellation flows. We track sentiment, we track why customers are canceling, which everybody should be doing this, Cherokee or not, have a cancellation survey, know why customers are leaving.
[00:09:33] Baird Hall: And then we know what offers have worked in the past. And so we're able to build strategic reactivation campaigns based on why they canceled and try to match the right offer to that customer that we think would actually bring them back. So we're still early days, this launch January 5th, and we're getting kind of our first round of data. We've actually had some customers experimenting with lifetime offers to previous customers, which has been really successful. Obviously, that's not for everybody, but it's been fun watching the data come back in real time on how these reactivation campaigns can be effective.
[00:10:06] Andrew Michael: Nice. Yeah, it's very interesting, I think, from that perspective, just trying to think through the different flows. And I think one of the things like that in my mind as well when it comes to reactivation campaigns is depending on how customers cancel. So if it's just a canceling subscription, but retaining the count, then you still have the luxury of having the email address and so forth. I think with issues with like GDPR and being keen to hear how you deal with that, it's like if a customer cancels their accounts, is this something that you're removing and deleting their emails to be compliant with GDPR and other privacy acts, like when you talk about these campaigns, who are you actually sending them out to and how are you setting them up so that they are within the law as well?
[00:10:49] Baird Hall: Yeah, making sure that we're adhering to unsubscribe lists is step number one. So you're not emailing to a previous customer that has unsubscribed. So we are having to connect to email marketing platforms from that standpoint to bring in those lists and making sure those get up to date. And then also ensuring that those customer accounts haven't been deleted so that they're still active. And it's really mostly system integrations. They are making sure we're loading up the list that we need, connecting the system that we need. And making sure that customers are getting rising bills.
[00:11:23] Andrew Michael: Yeah, so it's still early days, but have you seen any sort of early signs of success with customers that are getting started with it? It's like, what are some of your customers using it for and how are they using it perhaps?
[00:11:33] Baird Hall: Yeah, the most recent reports that came out this morning was we have two customers, as I mentioned, experimenting with lifetime deals to very specific segments of customers. So something else kind of tying back into what we have learned over the last year and a half is that segmentation when it comes to retention is really important. Making sure that you're not, you know, giving a 20% offer to canceling, to all canceling customers is great, but what's really great is segmenting your cancellation flows or your reactivation campaigns based on how customers have used the product.
[00:12:03] Baird Hall: Did they officially, were they ever activated at one point? If they weren't, then we need more aggressive offers. But going back to reactivations is these customers, the most recent success has been offering lifetime deals to very select customers that had used the product and activated power features that they know make them a good fit. And they've been getting really good reactivation rates from that. We're still seeing, it's really just the first month of emails going out and generally a monthly cadence. So we're still pretty early days on success, but that's kind of been the first instance of wins, which has been fun to watch.
[00:12:40] Andrew Michael: Very nice. Yeah. I think, It's definitely one of the last things people think about when it comes to turn your attention is like reactivation campaigns and how we can win back existing customers. Like most of the time we say, okay, like it's too late at this stage. You've lost them already. Like it's very difficult to win back. But as you were saying in the beginning, like when you get to that certain size and scale and the numbers are just there, like you definitely need to be trying and pushing and getting customers back if possible.
[00:13:09] Andrew Michael: At the start you mentioned like the most surprising thing for you was like how the little details make such a big difference. So I'm keen to maybe dive into a case study or story that you've seen and how this played out for you where you realized this. So you mentioned, I think copy in a flow or whatever it's like, maybe we could pick one of those cases and walk through like the scenario, how it got started, what changes were made and what the results were.
[00:13:36] Baird Hall: Yes, so about a year ago, we launched segmentation. So the concept that you can build out different cancellation flows for different types of customers. The easiest kind of basic version of this is customers for how long they've been subscribed. So let's talk to a customer that hasn't made it 14 days very differently than someone that's been around for you for multiple months or even years. So really starting with the segmentation is where these details can be accounted for and start driving impact.
[00:14:04] Baird Hall: Another good example of this is bringing in product usage data. Every customer is a little bit different. We'd like to work with them, but you can bring that into Churnkey. A good example is we've worked with a lot of video editing software products, a lot of AI content writing products as well has been a big segment for us. And so what they'll do is they'll bring in, for example, how many articles has their AI tool helped them revise or read, and they'll keep that count happening actively or have they use features X, Y, and Z, so that when the cancellation process happens, A, they can send that customer to the right cancellation flow, which is personalized and includes all of their usage.
[00:14:44] Baird Hall: And one thing that has really impressed me with the level of detail on our best customers is they'll use this personalization data in the cancel flow to remind customers of why they signed up and the amount of value that they've been getting. So I think what's been interesting is when you look at, again, we're talking about high volume subscription businesses and the cancellation process seems to be very much of an autonomous one. Customer sees their bill, they think about how much they've used the platform, they make a split second decision and they go to cancel. They're not having a meeting of thinking about like in a traditional B2B sense with customer success. They're going to actually look at their use case, you know, they're going to follow logic and get approval. You know, consumers and individuals are making fast emotional decisions.
[00:15:31] Baird Hall: One important part of this process is first interrupting the cancellation with an initial offer. So just something to interrupt the cancellation pattern to say and indicate, hey, there are other options here. When customers include an initial offer in the cancel flow, it increases survey response rates and recovery rates, even if that initial offer wasn't accepted. That was interesting to me because you would think people wanna get to the point quickly, but actually what they need is something to interrupt and bring them into the moment and start thinking.
[00:16:01] Baird Hall: So when we see customers have that initial offer and then a personalized survey and copy explaining, here's how many times you've used the product, here's all the success that you've had and why you signed up. We've actually seen customers be successful optimizing for cancel flow abandons. And so not even having to give an offer to save a customer, but just reminding them of this process. So I think that's probably a good example. It's a long-winded answer, but if you are at that scale, and you're not doing these types of personalization, kind of the personal exit experiences, there's just a lot of opportunity. It's such a great time to reconnect with customers.
[00:16:39] Baird Hall: You wouldn't think it is because you think cancellations are negative, but a lot of times, a lot of these customers are just, they're wanting to restructure their arrangement in a different way, not just get out as fast as they can.
[00:16:50] Andrew Michael: I like sort of that personalization element to it. And I think it's, in a lot of ways, it's sort of like, what gets discussed in the QBR from a traditional sense with the customer success, where you're dealing with larger selling prices. And we're going to review, why did you sign up for the product? Okay. What have we achieved? What were the KPIs? Where were we? And in this sense, what you're saying is, and I'm assuming as well, during sign up, maybe you have four or five goals of what you want to achieve with the product. They're registering what that goal is.
[00:17:20] Andrew Michael: And then as you mentioned, that every time one of these events is happening within the product or service, they have a count on that. And then at the end of it, when somebody goes to cancel, they say, well, wait a second, like you signed up to write once per week, you've been writing for the last 54 weeks straight, like congratulations. And just having this level of detail and personalization really gets people to see the value and understand, okay, why they signed up to begin with. And so this is a good reminder, I guess, at that point in time of where they've come from.
[00:17:51] Andrew Michael: I've definitely seen this in one or two products. I'm trying to think which ones now, but I think it's Grammarly does this quite a bit, but not only at the time of churn, but on a regular basis as well. So I think it's like once a month you get an update. And I think these things are very powerful to preempt churn at the end of it as well, because you're constantly reminded of the value that you're being delivered by the product or service.
[00:18:16] Baird Hall: Yeah. And I think these are pretty, you know, just for your audience, I think a lot of this might seem simple, but these are kind of traditional customer success functions that were happening on the phone and in phone calls. But what we're seeing is there's a large segment of business where the unit economics don't make sense to have a rep assigned to a certain number of accounts. So how do we mimic, it's not the right word, but how do we take these established customer success practices and implement them in a way that still works at high volume?
[00:18:49] Baird Hall: Again, there's a translation that happens because it's not a perfect match. That's really what we've been focused on is, how do we take these proven CS practices and deliver them at scale in a very quick, consumer-friendly type of way, which is a big problem to solve, but it's been fun to tackle.
[00:19:07] Andrew Michael: Yeah, absolutely. And I think definitely like the more conversations I'm having in the space that things are definitely changing rapidly in custom success and a lot more is being automated. So it frees up CS team members to be more tactical and work directly with clients and not just like putting together reports and spreadsheets to share data. Cause a lot of this is just repetitive analysis that can be done in automated.
[00:19:35] Baird Hall:That's a good point. Yeah. And we're also seeing, I'm not sure if you were saying this as well, but just a big push, even for larger, our larger SMB or enterprise customers, we're seeing a big push on PLG and using PLG to help feed even the larger sides of the business, where a lot of these same product-led growth functions of conversions and optimizations are really helpful to reach that. That's really what we're trying to achieve on the retention side is how do we deliver these things at scale, but also feed up the customers that need to be talked to.
[00:20:08] Baird Hall: So how do you segment these two things out and make sure that customers that don't fit that unit economic threshold go towards the more autonomous process, but then the ones that need to be elevated are, which is again, it's a lot to think through for an organization, but it can really help your customer success people be more efficient rather than talking to, you know, having so many repetitive conversations.
[00:20:31] Andrew Michael: Yeah, but I think even to that as well, like, yes, there are certain customers that will still need to be spoken to but it doesn't need to be an account of like how you've been using the product or service. I think that's something that can easily be automated and you can put together like a nice little infographic and it's quick, it's short, it's digestible. Like the conversations that you can have with the customers then can be a lot more tactical and you can dive into like how you can expand use cases and how you can continue to get added value out of the product as opposed to like this review point of like, this is what you've done basically which nobody really wants to show up for these types of meetings. Like everybody knows what they've been doing and how they've been using the product and at least it frees up the time to be used more tactically and to for customers to actually get more value out of the time that they do have with CST members.
[00:21:23] Baird Hall: Yeah, I like that a lot.
[00:21:25] Andrew Michael: Nice. So the product, as we were saying now, like it feels like you're moving more and more up the funnel and earlier early on in the stage of the user journey. And where do you see things moving next as well for you as a product? Is it something that you see coming in to end service from onboarding to activation, to retention or activation?
[00:21:47] Baird Hall: That's a great observation of us moving up the life cycle or backwards in the life cycle, closer to the beginning is what I mean. So that's definitely where we're moving. We have a lot of experiments that we're working on internally right now around in app retention preparation, for example. A couple examples being in-app messages to deliver offers based on certain feature usage. So you think of kind of a, you generally kind of have a boring checklist of when you log in and you're like, okay, I'm gonna go do these things, the box checks, and you finish onboarding and you get a big thumbs up.
[00:22:19] Baird Hall: We actually wanna try to deliver offers in the app to say, you know, if you complete these, maybe you get a free month, or also that backup payment methods, if you're willing to, you know, add other forms of payment, we can give you a discount there and like to be able to preemptively, you know, provide value when the customer completes certain actions. So in kind of an in app messaging state is, is definitely one place that we want to go still very early on that we've got a lot to work through. But we're starting the initial phases customer discovery there.
[00:22:52] Baird Hall: And then the other big opportunity is within our term prediction and customer health scoring, which has been a thing in customer success for a long time. We are really working hard on combining both billing data and product usage data, along with machine learning to try to predict which customers are most at risk, helping customers fine tune those models also, which we've got a handful of those customers which we've been working on. But with the envision being that, if we can get our churn prediction to a healthy enough state it can then help drive decisions in other parts of the product.
[00:23:30] Baird Hall: So customer goes in the cancel flow based on their score, based on a couple different product usage factors, they get this cancellation flow and then their offers could be dynamic. Or maybe the different types of plans that you offer them can be dynamic based on those scores. So that's a long ways off, but the idea is I think GitHub Copilot is probably a very ambitious analogy there, but having an AI co-pilot that's helping you write code and make decisions, we want to build that AI retention co-pilot that's helping you make these decisions, obviously within preset parameters. But yeah, that's the long-term vision, which is a long ways off. We're month to month right now keeping the growth going. But that's how we're thinking about it.
[00:24:15] Andrew Michael: Nice. I definitely think as well, like the onboarding that you mentioned, the activation, it's very interesting space. Previously discussed one of my favorite episodes actually with Jenna Basto from Prodpad where they had a 30-day trial. They said, why do we have it for 30 days? Let's cut that down to 15. They saw conversions increase when they reduced the trial time. They were like, okay, why don't we do that again? So they did it to seven. They saw further increase and then they actually started saying, okay, based on your trial period, if you're into your credit card details, we'll give you an extra two days.
[00:24:49] Andrew Michael: If you create your first project, you get an extra day. And they basically use the trial period as a way to motivate users to take specific key actions that they needed to do within the product or service as well. So it ended up being extremely successful for them. And I think there's something definitely in that finding ways to intrinsically motivate users to onboard them and activate them in the best way. So keen to see how that evolves and what the team comes up with on that front.
[00:25:17] Baird Hall: Yeah, I think from my backgrounds in sales even before I built my first SaaS companies. And these things are, again, thinking about traditional customer success practices and trying to deliver those automatically. We've been doing this in sales forever. It's like, hey, well, if you can give me a little bit of, if you can give me something, I'll extend your trial. I can maybe get you a couple months discounted. So we've used these practices in sales for a long time. And for them to deliver it that way throughout the trials, really elegant, that's a great story.
[00:25:47] Andrew Michael: Nice. So I'm keen to hear as well from your perspective, then as well, obviously you're building a product or service now to help other companies reduce channel retention. What has been your biggest challenge as a company when it comes to channel retention?
[00:26:00] Baird Hall: It's a good question. And it has been really interesting learning the differences between running a B2C high volume business versus Churnkey is a very traditional B2B software business. We don't do a lot of PLG. It's a lot of sales driven motions, implementations and engineering happening with implementation. So it's our activation times compared to our previous businesses are much slower, but our retention is incredible. We have net. I always get the term wrong, but it's net negative churn.
[00:26:33] Baird Hall: So our accounts are expanding higher than we do have some term, of course, but the overall account values are going up. And the most important thing that it's really doing a lot of traditional customer success practices of having regular meetups. Some things that really have been working for us, which again, we're a smaller company, probably for a lot of people that are listening to this, but we do a lot of shared Slack channels during implementation because our customers, that's how they work.
[00:27:02] Baird Hall: A lot of them have Slack. There's been a couple of Teams accounts, but we'll actually set up an active Slack channel. We make sure to set the expectation that it's temporary. We'll do it for two months and be there side by side as the customer's implementing because for us, if we get a customer activated, the LTV is just to a point where it is worth us spending the time being side by side with them as they're implementing.
[00:27:27] Baird Hall: So Slack channels have shared, I think it's called Slack Connect channels, have been really effective because the lag time on emails can just kind of slow people down, they get distracted, churn's generally not the most fun thing to work on. And I think our customers, when we're by their side, they feel much more comforted and we're able to make it a little bit more exciting because we're making really good progress and helping them see the overall vision. So that's really been helpful.
[00:27:54] Baird Hall: And then what you were talking about earlier about delivering automated reports to make sure that they are seeing everything that we do in Cherokee is a north star of what we call boosted revenue. So that's if a customer enters one of these retention tools and Churnkey saves them and they come back and pay a subsequent invoice, we keep track of boosted revenue. And so we really have to do a good job of making sure customers understand what is the performance of these different retention tactics and how much revenue are they generating?
[00:28:25] Baird Hall: Because if we don't deliver that, it used to happen to us all the time, where customers would kind of set it and forget it and Churnkey would be saving them a ton of money but then they would just cancel out of nowhere. And it's because they just didn't understand what was happening. They had just kind of forgot about it and had priorities leadership change. So it's been really important for us to not only deliver those, but make sure people are inviting stakeholders into Cherokee so that they get those emails.
[00:28:51] Baird Hall: And that takes a little bit of manual work and explanation because the CFO is generally not super excited to jump into a retention tool and sign up for emails, but it's really important for them to get it once we explain it and show it to them. So those have been working pretty well so far. I'm sure we'll have more growing pains as we continue to scale.
[00:29:11] Andrew Michael: Talking about pains, what has been the most painful moment since starting Churnkey for you?
[00:29:16] Baird Hall: The most painful for me was just learning B2B sales. I was, I had done sales in the past, but really spent the last seven years building inbound marketing products where you know, traditional drive a bunch of traffic, build a really good landing page, focus on those conversions, take some support tickets here and there. And then we tried to sell Cherokee like that early on. We tried to have a PLG motion for about a year, almost a year and a half. And we were just banging our heads against the wall.
[00:29:48] Baird Hall: We were running a inbound marketing driven playbook for a product that really needed a sales driven playbook. So once we started figuring that out, things started getting a lot easier. And we're still growing up in that sense where, you know, getting our pricing right, annual contracts, just traditional B2B, it's just been the most painful for us because it just wasn't our natural. It wasn't our natural.
[00:30:10] Andrew Michael: I was gonna say, your pricing and packaging doesn't really suit like a typical sales driven motion either as well, like at the price points that you're at, it's hard to support like a sales team as well. So I'm interested like how you deal with that. Obviously it helps having net negative churn and like strong growth from that front, but yeah, like how do you see pricing and packaging for the business and supporting this sales lead motion?
[00:30:36] Baird Hall: Yes, retention is what has kept us going because we know that even sometimes with these lower price points, it's worth going through the manual implementation process for our customers. But we've actually shifted product pricing over the last six months. And generally, what we'd like to do is we want to work with our customers to do price discovery and we will run a full revenue recovery analysis of, give us all your metrics, help us understand what you've been doing today.
[00:31:04] Baird Hall: Here's what we think out of your total churn revenue, split it up between involuntary and voluntary, there's the total amount of impact that Churnkey could have. Here is where we think we're going to save you that amount of money and we're going to charge you a very small percentage of that. We kind of have a sliding scale just depending on.
[00:31:21] Baird Hall: And also the other thing that's been really interesting, that I definitely wanna mention is how much we have learned about churn rates based on pricing models. So the first version of this was like, okay, B2C, B2B, yes, they have different churn benchmarks and then prosumers in the middle. Then you also can look at price points and you'll see average benchmark data there that you can match. But what we've been finding lately is that if a customer is using a feature-based model versus a usage-based pricing model, regardless of where they are, that's another segment of expected churn recovery.
[00:31:53] Baird Hall: So for example, usage-based customers, we save a much higher percentage because there's a lot more tactics that we can drive FOMO with because credit systems and giving extra usage, this is a lot more to do there versus somebody that's bought a set of features and isn't using it. So long story short, we have learned all of these different kind of benchmark areas of how much money Churnkey can save them. And then we try to charge a percentage of that. And then if we don't hit it, we'll do a true up or a guarantee and make sure that we do. But that's how we like to price it.
[00:32:17] Baird Hall: Our customers that kind of self-serve, we do have successful self-serve customers, but the best are the ones that go through this process with us. You really identify the benchmarks and set the pricing. And then let the customer hold us accountable with really great reporting that explains how much money we've been saving. So, yeah, that's kind of been the last six to 12 months evolution of pricing for us.
[00:32:49] Andrew Michael: Nice. I like that because I think your pricing is directly aligned with the value that your product delivers. It's extremely tightly aligned with ROI as well. So it almost like it's, it's a no brainer from a pricing and packaging perspective when evaluating the service.
[00:33:03] Baird Hall: It should be. Yeah. Early on, we tried to do performance based pricing after the fact to say that way, just sign up, it'll be low cost and then we'll just charge you after the fact which was great for conversations, but then at the last minute customers, they start doing pricing discovery themselves. They're like, wait, how much am I gonna pay? I'll run my numbers. And so we just decided we need to do this, we'll do the pricing discovery for you and we'll set the target. And if we don't hit it, you hold us accountable and we'll fix it. So that has been, that was a big learning of like, it's the same value metric just from a different vantage point. Yeah, different perspective. Anyway, yeah, long story there, that's been my journey over the last six to 12 months figuring out how that sales process works.
[00:33:47] Andrew Michael: Awesome. What's one thing that you know today about churn or retention that you wish you knew when you got started with your career?
[00:33:55] Baird Hall: I wish I knew kind of, it's a little bit of a cop out going back to my initial answer about the details, but I think I spent a long time just thinking that you couldn't, that churn was just kind of set based on a couple different parameters of your price point and kind of what segment you're in and you just kind of live with your benchmark, kind of your threshold, which to some degree that's true, but just learning how much change you can drive with small changes and metrics and experimentations like we've been talking about. I probably left a lot of money on the table over my previous businesses just having to learn that. So yeah, if I had known that from day one, I guess things would have moved a lot faster.
[00:34:38] Andrew Michael: Absolutely. There's definitely, as you say, like, churn is influenced by the segment, by the customer base, but there's a lot within your control to be able to, to maneuver and change. I'm not a fan of benchmarks when it comes to churn retention at all. Like, I think they're probably the least helpful thing.
[00:34:58] Baird Hall: Yeah, people definitely gravitate towards those for sure. And I think maybe also the, I spent also a lot of years hiding from churn, just hoping that we could outgrow it. We spent a lot of years thinking that we could just change our pricing, which pricing does have an effect on churn. But when you tackle churn head on and you really start learning how to make changes that affect good results, churns is an opportunity to improve where I did not look at it like that for a long time.
[00:35:19] Andrew Michael: Yes. Well, Baird, it's been an absolute pleasure chatting to you today. Is there any final thoughts you want to leave the listeners with, anything they should be aware of to keep you up to speed with your work?
[00:35:38] Baird Hall: Best place to find me is on LinkedIn. Last I checked a couple weeks ago, I'm the only Baird Hall on LinkedIn, so I should pop up right there. We share a lot of data, we share a lot of strategies when it comes to retention, and not just specifically for Churnkey. There's a lot of things that you could see how our product does certain things, and you could replicate those with your own systems. And we love talking retention. If anybody wants to chat and reach out, just find me on LinkedIn. It's definitely the best place. That's where we've been spending most of our time lately. Hopefully some big product releases and other company news coming so follow us there.
[00:36:11] Andrew Michael: Amazing. Well, thanks so much for joining today and I wish you best of luck going forward. For the listeners we'll make sure to leave everything we discussed today in the show notes so you can pick it up and grab it there. Thanks again, Baird. Cheers.
[00:36:24] Baird Hall: Thanks
[00:34:38] 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 at 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.
