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Personalize to retain your customers: Andrew Michael on tackling churn

Andrew Michael is no stranger to the startup game. He founded three companies, which created four products. “But I had to sell them for peanuts, since churn and retention was a killer for those products,” he said. This led to an almost obsessive quest to find out how to tackle issues of churn and retention through his podcast, Churn FM. Currently the founder and CEO of Avrio, a collaborative research platform, he joined Crayon Data for a Lighthouse Fireside Chat last week.  

Andrew was previously the Head of Business Intelligence at Hotjar, a feedback and analytics company. He is a firm believer that user research and data analytics teams should not work in silos. Instead, he sees them functioning as a single product insights team. This will help uncover the full picture when conducting research.  

In the hour-long session, he spoke about lead scoring and the health score of customers. He also touched upon strategy and the dynamics between onboarding activation and retention. Key takeaways from his chat. 

Understanding customer behavior is key. 

On any website, you’re going to have three types of visitors, said Andrew. These categories are based on lessons he learned from David Darmanin of Hotjar.

  1. Browsing Stormtroopers: They are curious. They’ll check out your site, but never intended to buy anything anyway.  
  2. Undecided Chewbaccas: They are constantly questioning if your product is right for them. They’re also trying to understand how things work. 
  3. Determined Jedis: They were always going to become a customer, no matter what. They knew they needed a product or service like yours. They simply sign up. 

So, when you ask all the visitors to your site to take a survey, you’re going to get some confusing feedback. “What we really want to be doing is focusing and asking questions just after purchase,” he said. Questions like, what nearly stopped you from signing up today or purchasing our product. They maybe fought through something that was a little bit more difficult than it needed to be. These Determined Jedis can help you get some Undecided Chewbaccas over the fence.   

Churn is a nuanced problem 

At Hotjar, Andrew was tasked with putting together a team to reduce churn. What they found was: 

  • As the company grew really fast, they began having research and data analysis in silos. They built a great culture around their data. 
  • But the research was being repeated. There was useful information that was relevant to people in success or sales to do their jobs, but it wasn’t effectively being shared by the team. 

Especially because they had to break their usual workflow to put the information in a specific place. Most times, the additional step was missed, and yet another silo with irrelevant information was created. “In the process of finding a solution, someone mentioned that it felt like a product on its own,” said Andrew. The idea stuck with him, and thus, Avrio was born. 

Lessons from Churn FM  

After talking to 150+ CEOs and entrepreneurs, Andrew saw three consistent ways to tackle churn and retention.  

  1.  Alignment. It starts from the top of the funnel down to the bottom. So, marketing and acquisition marketing teams are not just required to bring in leads. They’re required to bring in good leads that are going to stick around. Sales teams don’t have their bonuses based on just making sales. They have their compensation based on sales plus retention. It’s not about just closing any deal. It’s about closing the right deal.  The best teams understand this, and they have a really strong alignment between each other. They know that the people they’re bringing through the door and passing down the funnel are a good fit. They’re customers who have a really good understanding of the product, the product meets their needs, and everybody’s working in unison to really try and keep customers for longer.  
  2. Activation and onboarding. This is the biggest area where people spend probably the least time to begin with. But they see the biggest incremental gains when they focus on making sure their customers get activated. Making sure customers establish a value loop and proposition around the product is one of the most fundamentally important things when it comes to retaining customers.  
  3.  Relationships. One of the biggest reasons for churn is when your customer champion leaves the company. Work hard to try and bring in these customers. If you’re not developing relationships within these accounts, you have a big risk of churn. If you only have a single point of contact in that company, that is a big risk. Because when they leave, you’ll need others on the account that understand your value.  

Personalization for user retention 

 “This goes a long way for them in sort of creating ownership, feeling that this is their product. I think it’s good practice, when you create your account, you name your workspace, upload images, start making a space yours,” said Andrew. Then customers will have an inherent bias to retain ownership. He adds that over the next few years, we will see a lot more interesting things happening in this space. 

More from our Lighthouse Fireside chat series here.

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Susanna Myrtle Lazarus

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