Conversion XL Growth Marketing Mini Degree — Week 12
This week, I completed the course on retention inside of the growth marketing mini-degree. I’ll be sharing what I learned.
- Define actions that lead to activation and other retention steps.
- Use industry benchmarking
- Jobs to be done interviews
Identifying pain points:
- Question 1: Are enough people motivated to solve this pain? Or is there a stronger pain somewhere else?
- Question 2: What common events or situations trigger this pain point?
- Question 3: What existing solutions do we not want to compete with?
- Engagement metrics: Are the customers getting value from our product? They may be spending time with the product, but are they getting value? Are the customers tweeting, sharing, and talking about our product?
- “Engagement is when your customer is realizing value from your SaaS.” — Lincoln Murphy
- The biggest drop of retention happens between week 0–2. “Onboarding” or “short term retention” is huge.
- Great for engagement and re-engagement. Only way to engage inactive users. If you overload your emails and they unsubscribe, you have greatly minimized your chances of getting them back. You have to consider that they could be at work, on errands, etc. and asking them to do something right then could hinder building a relationship with them by logging in and doing something in-app so be careful about your asks. We are really asking them to do something later and to remember to do it.
- Email is more about developing a relationship and speaking about benefits over features
- Great for product notifications that has context for the product itself.
- Great way to reach active customers
- If it isn’t seen in a couple or few days, then send it as an email (in case that person isn’t logging in)
- Vary your cadence by how your customers use your app and test it
- Product tours
- Notification bars
- User onboarding checklists
- Highlight content, new features
- Prompt to take action on a feature they haven’t used yet
- Need to be used in conjunction with email timing
- Need to be helping the customers reach THEIR goals not our business goals
- How you communicate should match up with what’s best for your customers and not what is industry standards.
- Onboarding is bringing the customer back to the app again, again, and again
- Hubspot defines customer retention in three ways
- Short-term Retention: Week 1: Use the product more than once
- Mid-Term Retention: Week 1–4: Establish a pattern of usage
- Long-Term Retention: Week 4 and beyond: Rely on the product as an indispensable tool
- Sell the benefits hard in the beginning. Solving for their problems is solving for your problem. Features are important, but that won’t keep a customer long-term.
- Champions — Customers who bought recently, frequently and spent the most amount of money
- Loyal Customers — Customers who have shown loyalty towards your brand by purchasing recently, frequently and spent a good amount of money.
- Potential Loyalist — Customers who have recently bought from you, but spent a good amount and made more than one purchase.
- New Customers — Customer with the highest recency but made a purchase only once
- Promising — Customers who made a fairly recent purchase, but haven’t spent much or made repeat purchases.
- Customer’s Needing Attention — Customers with above average frequency and monetary value but may not have bought from you recently
- About to Sleep — Customers with below average recency, frequency and monetary score
- At Risk — Customers who used to buy frequently with high monetary value, but haven’t made a purchase for a long time
- Can’t Lose Them — Customers with high value attributed to their frequency and monetary score, but have a very low recency score.
- Hibernating — Customers who purchase a long time back, spent low amount with a low frequency
- Lost — Customers who have the lowest recency, frequency, and monetary value.
Things to look at of how you define the segments:
- Buyer Attributes — What do we know about them? Demographic data pieces
- Behaviors — What do their actions tell us
Beyond the first 90 Days:
- According to MetaSaas, a company that identifies unused, underused or abandoned SaaS licences, approximately 31% of SaaS licences go unused.
- “Rethink how you’re organized. Building an organization with the agility to respond faster to change than competitors is more practical than trying to predict what’s ahead.” — Gartner
- Zappos uses a follow-up call after people call in and get their problem resolved to make sure that they are still good and if they have any other questions. For example: 2 weeks after they call in a call goes out to them: “Hi, How are you? I wanted to make sure you’re still setup on CRTV and to see if you have any other questions?”
- In SaaS, activity is the number one driver
- John Warrillow wrote the automatic customer
- Zappos does thank you notes and other gifts to the customers.
- Speak to your customers in the channel in which they prefer the communication
- “In doing 5% more than anyone else, it makes you look 100% better.”
Slowing the Curve:
- Product backlog is user stories that aren’t in the current product development sprint. Cleanup should be happening on an ongoing basis.
- Your backlog should be relevant to your product and your customers
What are we being hired to do for the customer?
- Read “Hooked” by Nir Eyal
Nir’s Hook Model: 4 Step Model
- Trigger — Multiple triggers help form a habit
External (Bring customers into your app)
- Push notification in app
- Email notification
Internal (customers own emotions & behaviors)
- A sense of peace and calm from using your yoga app for example
- There’s a page that drives the behavior. They can sign up for the free class.
- It’s something we are helping our user to do
- Have the email go directly to the action that can take place
- If it’s an email about watching a specific video, link to directly to that video page, not the homepage
3. Variable Reward
- When we get a small reward for a particular task as humans, we will go back and see if we can get that same reward.
- Variable reward means that we may not get that reward every time, but we are intrigued enough that we want to keep trying to get the reward.
- If it’s a Yoga app, when you push the notification where you sign up for the free class, but once you sign up, there’s a share link on facebook and that is an entry for a grand prize drawing for a free yoga mat. By sharing that, you’ve been interacting with the app more, you’re sharing with other people and you’re creating a virality around the app.
- Once someone is invested in your product, you can get them to invest in future experiences. The goal of this is to help create consecutive cycles.
Continued Valuable Info
- The app “Calm” saw that users were proactively setting reminders or calendar times to meditate and so they started using app notifications to their users and they saw a 3x result of daily users from it. They used Amplitude to track all their analytics.
- Cancelled customers, especially in trial can be your best prospecting group.
- You don’t want to email too much for a zombie customer. That’s one that has been signed up and paying for 6 months, but isn’t watching/engaging with your service.
- Reach out in small doses to these customers with super valuable shares
- Churn Rate = numbers of customers lost during period divided by total customers
- 7% annual churn rate annually is really good
- Annual plan offer should not go out to cancels. That email should be about how the product has improved and build the value of that and THEN pitch the offer of coming back.
- Upselling is a power move if you have the right offer and the right audience
Book called “Marketing Metrics”:
- Probability of selling new prospect is 5–20%
- Probability of selling existing customer is 60–70%. That includes cancelled customers.
- Get to know your customers. Get on the phone, skype, zoom, anything!
When you are interviewing your customers over the phone, ask them about themselves:
1. How would you describe your job title + role at work?
2. What are you working on right now?
3. What is the biggest problem you’re facing that keeps you awake at night?
Then talk to them about your product:
- 1. What was happening in your world that led you to sign up for the product previously?
- 2. What happened during your trial that convinced you [product] was the right solution at that time?
- 3. What were you skeptical or anxious about when you signed up? Is that what ultimately prevented you from using [product] long term?
Slowing the Curve:
- Mixpanel (most popular and her favorite), Amplitude, Segment are all popular software tools.
- These tools are all focused on product analytics.
- GA is more of a marketing tool for pre-acquisition and for ongoing customer retention, a deeper analytics tool is needed.
- GA is session-based and Product Analytics are user-based.
- Are the tools for simplification like Segment or going wide like Amplitude with more features.
- Take a look at the reports they have available
- Also take a look at funnels and see where the users are dropping off
- The third report to know about is retention
- Pricing varies for all three products and they have a low-price startup option.
Inside Mixpanel (Key Reports)
User Identification (explore -> users)
- You can see everybody in a list. You can filter cancel reasons and tons of other filters like events.
- You can change day ranges
- You can click into an individual and see their whole history of what they did and in what order. You can see what country they are in, how recently they’ve been active, etc.
- You can see how people are engaging with different actions
- You can set up your own funnel like 1. download app, 2. view video, etc.
- You can set up an onboarding flow, upgrade flow, cancellation flow all based on “events”
- You can filter your cohorts by various filters
- You can see how certain events correlate to retention like sign in to cancellation, sign in on 2nd week to retention, etc.