Churn Bites Episode 6

ChurnBites - Joe Wilkinson Interview

Host: Dan Wilson (ChurnBites)
Guest: Joe Wilkinson (CEO/Founder)

Joe Wilkinson  
They said, Hey, we have this huge churn problem. We're losing users. And in fact, it had gotten so bad that they had to get rid of their entire marketing team. They said, Hey, we got to get profitable.

Dan Wilson
Welcome to Churn Bites, folks. Today I'm pleased to introduce Joe Wilkinson, and we're gonna talk about where churn is in the funnel and how to detect it. How you doing, Joe?

Joe Wilkinson  
I'm doing well. I'm doing well. Thanks for having me here. Dan, 

Dan Wilson
It's our pleasure. Tell the audience at home who you are and what you do. 

Joe Wilkinson  
Yes, I'm Joe Wilkinson. I help companies who improve their conversion in a way that really drives retention. So these these companies, a lot of them, SaaS companies, they're coming in, they have retention problems and they also have conversion problems. They're spending a bunch of money at Google ads a lot of times. And you say, Hey, how do we actually get more money out of these users? And so I spent, you know, decade in growth helping these different companies actually do this in house. And for the past two, three years, I've been doing it as an advisor and a consultant across these other companies. 

Dan Wilson
Well, that should give you a great perspective to help folks. Now, if I remember right, you have a particular story in mind about churn in the funnel. Give us some background and context, please. 

Joe Wilkinson  
Yeah, yeah. So in this case, you know one of these company I talked to who they were really having this problem. They said, Hey, we have this, this huge churn problem. We're losing users. And in fact, it had gotten so bad that they had to, you know, get rid of their entire marketing team. They said, Hey, we got to get profitable. Yeah, they were just kind of hanging on and saying, Hey, how do we, how do we get to a place where the people who are still spending, you know, some people that stuck around that this company can just continue to exist. So stopped all paid acquisition, stopped all organic acquisition, got rid of the marketing team. They actually hadn't sent an email to a customer in a very long time since I joined, over a year. 

Dan Wilson
Wow. So this company is in a pretty bad spot. They've gotten rid of marketing. They don't want any more inbound folks, and they're on the rope. So what happened next? 

Joe Wilkinson  
So when you first start looking at different companies and sort of thinking about retention, part of why we're here is the first question is, where is it happening? Where are you causing these different retention problems? And some may be at the end, where people have been using the product for a while, but their use case has gone away and they're leaving, or different people in the company have shifted around or move. But in this case, you could move it all the way up front, the very front of the funnel. And it was both in the user acquisition, where they were basically telling people, Hey, come on in. It's totally free. No need to worry about anything. And then, of course, the user was very surprised when they got there and they needed to pay. And after that, there was just many different things happening. There were all these different pop ups and all these different questions and onboarding questions and unrelated things, and they would even push users to all these different areas of the product, because 1% of users might care about this. But what happens is, I'm sure you've seen it, what happens when you have a different call out for every 1% of your users,

Dan Wilson
It sounds like they were very focused on acquisition, not necessarily on building a healthy business, and didn't really have a great sense of what the customer journey should be. So, so what happened when you started looking around? 

Joe Wilkinson  
Well, that's exactly right. I just started asking questions. Why do we have this? What's happening here? And there's a whole group of things that the response is, we don't know. And you ask, you ask everybody, you ask the CEO, you ask the marketing manager, you ask the product manager, why are we doing this? I don't know. And those are the easy ones, but they're, you know, they still run into things. You say, hey, let's get rid of it. And the answer is, well, so somebody might care.

Dan Wilson
Oh, man, this sounds like a tough one. Okay, wait, yeah, this goes, you go, 

Joe Wilkinson  
Who? Let me talk to them. And, you don't buy them, you know, and maybe it's because, again, they had laid off a lot of the company to get to this good, solid, profitable spot. But a lot of times, companies around long enough, and it doesn't take that long, you know, couple years, even people forget why they did something, and then maybe they didn't think it through in the first place. 

Dan Wilson
I've been guilty of that. All right, so this app needs a spring cleaning. Now, what 

Joe Wilkinson  
exactly, and that's the easy part, the spring cleaning. So you say, hey, let's get rid of these things and see if anybody gets upset. So you just start getting rid of anything. Get rid of this. Get rid of this. Get rid of this whole. Whole app is clean. And what do you know? People, people start making their way through the product. More they're coming in, they start spending and the people who do, they're sticking around, but they still have this problem, because not not enough, people are getting there, and those people are turning and then you have to step back and say, Well, what are the hard things that you have to change? And this is where you have to understand why someone. Coming and what they're trying to accomplish with your product and really deliver that. And this is that 1% because you say, Hey, you're coming in, someone's someone's coming into the product, and you're asking them to go do this thing that only 1% of people in the product want to do, 1% of you used to want to do. So they're going to go start doing it. Maybe they'll feel like they were valuable because you made it really complex and really advanced looking and really bulky, and then they're gonna get frustrated, not know exactly why they signed up, and they're gonna leave. So to do this, you have to start then talking to a bunch of users. Hey, what are you doing here? What's going on? Why did you join? What are you trying to get done? You know, some of these old hat things. And when you're able to do that, you can then kind of wind it back and say, hey, what if we only built an experience that handled the 80% use case and not the 37 other 20% use cases. Now, the best companies, I think, will go do that. I don't know if you've seen this done in other companies. I know you have a lot of experience there, but it's not always an easy conversation to actually get to that 80% 

Dan Wilson
No, I think it can get confusing depending on the type of product. So for a super horizontal product, it can be almost a mystery what people would want to do with it. But with a super focused, vertical product, there's an easy value chain, and you can kind of push people down the greased path of value, if you will. But you know, I think it's difficult, not only for those reasons, but also when you design by a committee, and the pm doesn't have a strong sense of an opinion of what is this product and who wants it, and why do they want it, and what do they want to accomplish it can collect dust like rolling duct tape on the floor. And next thing you know, it's not clear how I'm supposed to use this in order to get the value that I want. Because, like you said, they're afraid of taking the 1% thing away in case someone really needed it. You know, it seems really tough to figure this out without talking to customers, and not only customers, but the right kind of customers. 

Joe Wilkinson  
Yeah, that's totally right. You could go talk to customers all day, and if you're building for that customer who's never going to retain. You're going to build a bunch of stuff that nobody actually wants, and you're going to keep shipping in and keep building it, and that customer is maybe never going to pay and never going to retain if they do, and you've just scared your core customer away. 

Dan Wilson
Design by intuition is a thing. Okay, so you came in, you did some analysis, you found out that there is a bunch of junk in the app, and that the experience wasn't designed for the type of user who would retain so after you worked through all this, what was the the outcomes? 

Joe Wilkinson  
So it was huge for them. Before they ever turned marketing back on, they had actually gotten their revenue back up. So they had seen this massive drop in revenue, which had kind of worked out ring profitable. They had gotten back to where they were and actually started beating these records to the point where they've started spending five plus figures on marketing again per month. And so they're just cranking in the money, bringing in these users, users sticking around. They're seeing the highest retention cohorts ever seen?

Dan Wilson
Well, I imagine that was quite the journey. Is a lot of personalities and cross departmental opinions to manage. If someone in the audience is in a situation like this, what would you recommend that they do and or do you have any advice that they should be sure and and consider before taking an action? 

Joe Wilkinson  
Two things I try to do to make it easier that could help people. One is, you can always introduce what I call escape hatches someone's going through, and you say, well, somebody might care about it. And you can say, Let's include it, but let's make it a lot smaller. Let's make it 1% of the UI, rather than 50% of the UI, because it's 1% of the users. And then the other thing is the AB test, and I'm a big, big fan of AB testing comes from the growth background, but you can say, hey, you're right. Maybe somebody does care about this, and we've talked to people, but maybe we're wrong. And in fact, we really want to build something that people who are going to pay us a retain are going to build. So go run an AB test, see how it goes, look at it in that moment. If you can look at it later, that's even better. As you can see, hey, are these people spending and sticking around? And those tend to help solve a lot of the pushback.

Dan Wilson
Well, that's some very interesting human engineering techniques that we could apply to navigate these issues. So to summarize, there was an application. It wasn't going well, too much churn. They had a lot of junk in the app and an unclear customer journey. By removing some of the junk, and speaking to their ideal customers, you could clean up the journey and the interface and the value discovery, but this all requires navigating a variety of personalities, which you can use through escape hashes, AB testing and being deliberate. Did I miss anything? 

Joe Wilkinson  
Oh, that sounds great. 

Dan Wilson
Marvelous. Joe, well, this has been pretty enlightening, and I bet people are gonna get a lot out of it. Any final words you wanna mention your newsletter or anything like that? 

Joe Wilkinson  
I appreciate you asking if anybody's interested. I've written a lot about this over at my newsletter, artisan strategies.substack.comand you can also just reach out at artisansgrow strategies.com And get in touch and let me know what churn problem you're working through and how you're handling things.

Dan Wilson
 I'm a subscriber myself, and I really like the articles. They seem to be written from the heart and experience. So thank you for that. 

Joe Wilkinson  
Thank you appreciate it. 

Dan Wilson
All right, Joe, until next time this is churn bites, you can find more episodes at our website, at churnassassin.com.

And if you have an interesting churn story, let us know on our website.

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