Locking out customers | Loomly's Thibaud Clément

00:00:00:01 - 00:00:30:23
Unknown
You have to understand that you have hired humans and when you work with enterprise customers. So in a way, wrapping our heads around the fact that there is kind of like a minimal structure or level of churn that at some point we cannot go beyond. While balancing that with the idea of still always trying to improve and fight to improve churn, I think that's that's where we have to walk this fine line and make sure that we are always doing our best while also understanding and accepting the specifics of our market.

00:00:31:14 - 00:00:50:11
Unknown
Welcome to Retention Talk. I'm Neil Desai and we're talking to the best minds in the world of product and customer success to bring you actionable strategies on reducing churn and boosting retention. This week we're talking to Thibeault, the co-founder of Lumley. And this episode, we talk about different ways to triage customer feedback. Second, how you might approach term optimization.

00:00:50:17 - 00:01:11:10
Unknown
And lastly, pay close attention to what TiVo says about delinquent churn So TiVo, thank you so much for being here today on retention. I'm super excited to learn a little bit more about Lumley and how you guys think about retention. First up, I'd love to just learn a little bit more, like how do you end up here? How do you end up starting this?

00:01:11:15 - 00:01:50:23
Unknown
You know, what are you working on these days? Yeah, well, it's it's a long and fun and romantic story, but essentially I've been working with my spouse Noemi for nine years and normally is the fourth company that we are building together. And in fact, prior to starting gloomily, we had an advertising agency operating both in France and here in the U.S. and we were serving a very wide range of customers from SMEs to start ups to, you know, very large enterprise accounts like L'Oreal, where we were managing five brands and essentially there was a process that was common to all of those clients, which was that we were managing for them and creating for them what

00:01:50:23 - 00:02:12:22
Unknown
we call editorial calendars. And the simplest way to think about editorial candidates is that they are spreadsheets where you make your planning in terms of content and what you're going to publish to social media and blogs and things like that. And as you might imagine, spreadsheets were not meant for that. They're great for pencils and, you know, balance sheets, but not so great for content creation.

00:02:13:12 - 00:02:41:07
Unknown
Let alone collaboration. So we started to look for ways to streamline that process that was very repetitive and time consuming and error prone. And we could only find two families of products online. The first one was a generic product management software, which was great for collaboration, but not so much for publishing. And the second family of product was social media, which were great for publishing, but not really good for collaboration.

00:02:41:09 - 00:02:59:05
Unknown
So we decided to take the matter in our own hands, and we actually built our own solution internally in the agency. I'm not a software engineer. I just wrote to everything on my own. And, you know, that was back in August 2015. And by the end of the year, we had prototype up and running that we started using with our own clients.

00:02:59:05 - 00:03:30:02
Unknown
And we did not tell them that it was our own product because we wanted some feedback. And, you know, the feedback was actually great positive. And so we kind of understood that maybe that was something that other professionals could be interested in using. And we opened up in the public beta two months later in February, 2016. And from there it has been a wild ride, you know, we are approaching the 9 million annual recurring revenue we have over certain sales and marketing teams paying customers using our product.

00:03:30:10 - 00:03:47:04
Unknown
And, you know, it's been a very exciting adventure. Awesome. Thanks for the quick sort of break down there. I love founders stories that start with we were just tired of doing this in Excel, right? Because I'm pretty sure and I'll have that share Lulu, with our content team because I'm pretty sure a lot of our content planning still happens in Excel.

00:03:47:04 - 00:04:03:22
Unknown
But such a fascinating like example of a core frustration that I'm sure a lot of teams have and you guys being able to productize that is pretty special. Obviously, you know the product now, you guys have been around for five plus years now and content creation is one of those things that's like pretty integral to, you know, obviously marketing teams.

00:04:03:22 - 00:04:22:15
Unknown
Tell me, how do you guys think about retention? Does someone own retention? What do you guys track? How do you measure success here? Just at a high level? Would love to get a sense of, you know, particularly as you know, the founder CEO, how do you think about retention? Yeah, well, I think about it a lot. And in a way, the short answer is that everyone in the team owns retention.

00:04:22:21 - 00:04:48:07
Unknown
The customer success team, you know, looks at the data and works with the customers and helps them in trying to make them happy. You know, the engineering team builds the features and fixes the bugs and and they are very receptive to customer feedback. And of course, management team works on growth and strategy and reporting. And so, you know, we are kind of like a tripod and we all work on on retention.

00:04:48:07 - 00:05:08:02
Unknown
And this is kind of I wouldn't say it's our Northstar because we have like another Northstar. But, but it's a very you know, it's something that we are all very aware of and that we try to work on consistently and collaboratively. Got it. What's something that, you know, based on what you just said, seems like retention is something that is a theme across all the different teams.

00:05:08:02 - 00:05:28:21
Unknown
Right. Whether an engineer on the sales team or an exec, you have an eye on retention. So, you know, something that I try to unpack is like, how did it get this way? Because it's not something that just happens. And I think it's really a mindset, right? So I think I'd love to learn a little bit more about like how you guys end up this way where a lot of companies perhaps struggle with infusing, you know, cross team collaboration and attention.

00:05:28:21 - 00:05:57:10
Unknown
Right to the revenue retention. Yeah. So to to get there, I think we we need to just take a step back and rewind the story a little bit. Like, I said, we had this problem, right? It was an internal problem. And so the way it started is that no, Amy, my spouse, who is the cofounder of Lonely and the CMO she had this problem in the agency and I was building the product for her to kind of silver pain point.

00:05:57:10 - 00:06:17:11
Unknown
And so because of that, you know, we had a very tight feedback loop where I was, you know, building the product, pushing out the updates. She would be doing some kind of cute way that we were not even calling that at that point. But she was basically trying the product and telling me, well, this is working, this is not working.

00:06:17:14 - 00:06:45:09
Unknown
Can we make it this way? And so on and so forth. And so that's how it started. That's the DNA of the company. And as we kept growing, we were and we are obsessed with one thing, which is how do we scale that feedback loop so that we make sure that we stay in touch with our customers so that we understand when something is wrong, but also when something is great and finally when something is missing.

00:06:45:19 - 00:07:09:12
Unknown
And so the way we have been doing that is, well, now instead of being, you know, just me and me on both sides of a desk, it's basically, you know, the 16 speaking with about 250 customers every single day and responding to their feature requests and, you know, kind of helping them when there is a bug and also trying to help them figure out the UI if there is anything that is not clear.

00:07:09:19 - 00:07:47:05
Unknown
And that is what informs the roadmap on what we build. And that is also, you know, how we work on bugs and things that are reported by the customers. This is a very long way to say that it has basically been into our DNA since day one to focus on customers And as we kept growing, we kind of focused on making sure that we were not losing that because we treat customer feedback as gold And basically, everyone in the team is receptive to customer feedback and therefore understands the importance of retention.

00:07:47:06 - 00:08:04:21
Unknown
That makes total sense. You know, is there something that you guys are currently still working on or struggle with today when it comes to improving memory retention? You know, there are things that are that that you have to understand which is, you know, depending on the type of leg of your target audience, for us, it's it's mainly a SNBS.

00:08:05:04 - 00:08:36:04
Unknown
You have to understand that you have higher terms. And when you work with enterprise customers. So in a way, wrapping our heads around the fact that there is kind of like a minimal structural level of churn that at some point we cannot go beyond while balancing that with the idea of still always trying to improve and fight to improve, I I think that's that's where we have to walk this fine line and make sure that we are always doing our best while also understanding and accepting the specifics of our market.

00:08:36:09 - 00:09:02:12
Unknown
Sure. Yeah. That's, you know, kind of separate from this podcast team always is something that a lot of folks ask us is like, what's a good enough churn rate? Because obviously at some point, you just have diminishing returns. And something that we often like to do with a lot of our partners or friends is is share like, you know, benchmarks, particularly because we were just sitting on a ton of data around, you know, B2B, SAS, and what do you see as churn rates across different industries.

00:09:02:12 - 00:09:23:08
Unknown
So if that's ever helpful, like let me know. I'm happy to share some of that. Just so you know, you have more context. Of course, that's that's really cool and kind of, you know, building upon what you just said, I think it's not easy to know, you know, what's a healthy level of churn. What we usually refer to is we try to look into some is there some studies or some benchmarks?

00:09:23:11 - 00:09:47:20
Unknown
One that we like is the one from Redpoint from down to News, who basically has it for the monthly and annual customer churn rate for, you know, SMB and midmarket and enterprise. I think as long as you are somewhat aware of, you know, what's a healthy level and then, you know, you work towards that goal and to be to build that goal, I think that's the healthy way that makes a ton of sense.

00:09:47:22 - 00:10:10:17
Unknown
Speaking of, you know, monthly and annuals, I'm super curious, like what's your approach to sort of term optimization? Like is there you know, most folks sort of give a discount to upgrade users to annual like what's that process look like forward for your customers? Yeah, in a way, that's, that's how we approach it when you subscribe to a yearly plan, you get a 25% discount compared to the same monthly plan.

00:10:11:02 - 00:10:29:14
Unknown
And yet the way we look at it is that, you know, if you're interested in flexible easy, then you go with the monthly plan. And if you're ready to commit to a year of service results, then we reward you with a 25% discount. Got it. And what's the process for you know, getting more folks on annuals is a sort of campaigns you guys run.

00:10:29:14 - 00:10:47:20
Unknown
Is it things in the app? Tell me more about like how you guys get customers actually on it, these annual plans. Yeah, well, you know, we always present the users with both options. And so, you know, usually it starts with the specifics of their situation, you know, depending, you know, sometimes it's, it's a matter of cash flow, sometimes it's a matter of profitability.

00:10:47:20 - 00:11:06:03
Unknown
So, you know, you will choose one billing cycle over the other and then, you know, over the course of the lifecycle of the user, depending on their behavior, what they do, what they do, not, which features they use and things like that and how active they are. You know, sometimes we, we from them and we say, hey, you know, you seem to be like loving the product.

00:11:06:14 - 00:11:23:09
Unknown
It looks like you are very active. So and it doesn't look like you're slipping away and you may be in for the long haul. So you might as well benefit from the discounts. Would you like to proceed in a grade to the yearly plan? And, you know, that's that's usually how we do it that many times. That makes sense.

00:11:23:20 - 00:11:40:13
Unknown
One thing that I like to sort of learn from from different folks that we don't do because because I think something that the audience really likes to hear is some of the mechanics around, you know, how you actually reduce churn. Right. And one of the key areas in which this happens and is very unique to each product is the cancelation experience.

00:11:40:20 - 00:11:57:07
Unknown
So curious, like, let's say I'm a customer of loyalty and I go and hit the cancel button. Walk me through like what happens. Yeah. When you cancel, a couple of things happen. Well, first, you can cancel any time. That is very important for us because we don't think that, you know, you should be tied in to a contract.

00:11:57:07 - 00:12:17:15
Unknown
So if you cancel and then, you know, at the end of the year of your subscription, you just cancel. So that's that's one, too. We basically present you with a negative survey so that we understand what is the main reason why why you canceled. It's very fast. It's only, you know, two questions. One is required. There's a one is optional.

00:12:17:22 - 00:12:48:01
Unknown
And this really helps us understand there are terms and trends that we need to pay specific attention. And it also allow us to have some granularity perspective in to understanding why some customers are turning in three. The last thing that we do is, you know, for some customers, again, given the specifics of the assembly market and also the fact that, you know, some of our customers, for instance, are professionals, they are consultants and they have their own customers and they use locally with those customers.

00:12:48:06 - 00:13:13:09
Unknown
So sometimes, you know, we know that they may lose the contract with their customers and then they may have another contract in the future. So their activity may be seasonal. And so their need for only may also be seasonal. So to get them addressed, that what we do is we offer the option to users who cancel their subscription to receive an email three, three months down the road to return more of our alumnae.

00:13:13:09 - 00:13:39:17
Unknown
And what has been you in the in the three months between when the canceled and in that famous email. And so that helps, you know, that helps with reactivation that also helps with relationship because it shows that we we keep on improving the platform and making progress and listening to our customers. I love that right is it's really like thinking about the long term because to your point, you know, it's less important if you save them that day, if they reactivate months later.

00:13:39:17 - 00:14:02:17
Unknown
And ultimately it's the LTV that you care about. Right. Is there something that you've learned from these surveys that you've really taken to heart and ultimately incorporated in building your product? Well, yes and no. No, because it's not like there is one thing that stands out particularly. But yes, because we learn something with every new customer survey response.

00:14:03:00 - 00:14:28:19
Unknown
And I think the main thing here is we are firm believers in continuous improvement. And so it is still a large, you know, while continuously improving, it's all about making sure that we are a subscription business. So we work and benefit from recurring revenues. So we have to think long term. Like you just said, we cannot be just like transactional.

00:14:28:19 - 00:14:46:23
Unknown
We have to always get better. And I think this is the name of the game. Got it. No, I love that. By the way, I got to ask, just because this is something that we spent a lot of time thinking about is what happens if they don't cancel, but their payment feels like, what's the process for recovering those users when fail payment happens?

00:14:46:23 - 00:15:16:10
Unknown
You know, we just have policies in place to retry the payments such an infinite number of times. And after that, a lot of times. Well, basically, the subscription is automatically canceled. And, you know, they, of course, receive emails every time a payment fails. We make suggestions to help them with that. We also try to prevent it ahead of time when we know that the cards expire not that we have the data, but, you know, this is one of the services that we use that going to help them account.

00:15:16:18 - 00:15:46:02
Unknown
And basically, you know, we would try to keep in touch with them and allow them to avoid service interruption because we are a content publishing platform. And so if you have planned content ahead of time for to be published in the future, you don't want your posts not to be published because your payment failed. So we tried to be aware of that, not necessarily from a pure revenue perspective, but just from a pure customer experience perspective.

00:15:46:02 - 00:16:03:11
Unknown
That makes sense. I think one of the things you guys do really well is like tell the customer what they'll lose, right? I think especially when it's a mission critical or a service that you know well, they'll lose memory or content or the ability to schedule post reiterating a value proposition at key points in the user lifecycle can really go a long way.

00:16:03:12 - 00:16:20:12
Unknown
Right. So no, that's that that's super helpful. So this has been really helpful to just get a sense of like, you know, some of the mechanical things, but also just how you guys think about retention overall as you think back, you know, over the last couple of years and growing the team and now revenue to almost 9 million in error once what's something that you're really proud of?

00:16:20:15 - 00:16:42:01
Unknown
It could be anything. It could be something you build, it could be something around the team. But as you reflect back on your time here, like what? Yeah. What's something you're really proud of? Well, you know, I don't want to sound like a broken record, but I think it's this idea of of, you know, striving to continuously improve and get better and not, you know, not be like, oh, okay, we'll just build this product and kind of milk it.

00:16:42:07 - 00:17:05:14
Unknown
No, it's it's all about, you know, lonely is kind of, like, alive, and it's growing. It's getting better every day. With every new customer interaction, every piece of customer feedback, every feature that we ship. And I think that, you know, this is this attention to detail, this attention to customer feedback that, you know, has taken us here. And this is probably what I'm the most proud of.

00:17:05:18 - 00:17:30:22
Unknown
This idea of starting from nothing and then building something in perfect and polishing it over time, this is very satisfying. I love that. And so, like, if you I don't know that we have a lot of folks who are still trying to figure out retention for their SaaS product. Right. If you had to, you know, perhaps give people four or five years ago some advice when it came to revenue retention or someone just starting out, what would that look like?

00:17:31:02 - 00:17:53:16
Unknown
Well, for sure. Don't don't look at the customer churn rate in the aggregate. Look at that revenue churn rate or revenue retention. And look at it from a cohort perspective because like I said, your product is alive. Your product is changing. There may be seasonality on your market. Everything is changing that there may be like, you know, structural changes.

00:17:53:16 - 00:18:20:07
Unknown
Just think of what happened last year. And so if you just look at customer churn rate in aggregate, you know, just using a big proxy and you are missing out on so many levels and layers of details that you would get if you are looking at revenue retention on a cohort basis. So that's very important. It's a much better picture it's a much better way to analyze retention.

00:18:20:14 - 00:18:39:00
Unknown
And that's definitely something that I would do. Just look at retention on the call basis. Love it. Cool with TiVo. Really, really appreciate the time. You're really insightful and backlog. I mean, it it's kind of crazy to see how fast you guys have grown over the last few years and really appreciate the time. And thanks for being on the show.

00:18:39:01 - 00:18:40:18
Unknown
Thank you so much. It was a pleasure.

00:18:45:16 - 00:19:04:11
Unknown
A huge shout out to TiVo for lending their time to the podcast today. Someone that spent a lot of time thinking about delinquent churn and term optimization. This was a fun way to recap. We talked about different ways to triage customer feedback, and loosely they view retention as a tripod. The customer success team looks at data and helps to work with customers.

00:19:04:17 - 00:19:27:18
Unknown
The engineering team builds features and fixes bugs, and the management team works on growth and strategy as they grow. It's really important that the entire team is obsessed with scaling the feedback loop to make sure that they stay in touch with the customers and understand all of their concerns. Second term optimization the folks over at Lumley make sure to offer an annual subscription not only when customers sign up, but once a month.

00:19:27:18 - 00:19:50:10
Unknown
A user has actually been using the product for a few cycles by checking customer behavior and how active they are. They can prompt them with the best value for the customer at the right time. Lastly, locking out a customer can be a last ditch effort to keep them around. However, by sending dunning emails and communicating the value that will be lost, hopefully you can avoid locking out a customer, but sometimes it's the only way to get your attention.

00:19:50:17 - 00:20:09:19
Unknown
Making sure that you freeze a user's account without deleting valuable information in there can really create a loss aversion that way. Once you do recover the payment, your customer doesn't have to do anything to reset their account, pick up right where they left off. You don't want your delinquent churn to turn into an active cancelation. Thanks for listening to this week's episode of Retention.

00:20:09:19 - 00:20:25:17
Unknown
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00:20:26:01 - 00:20:31:21
Unknown
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