How to fight churn by automating your customer retention flow

J.R. Farr

|

CEO & Founder

of

Weav
EP
57
J.R. Farr
J.R. Farr

Episode Summary

Today on the show we have J.R. Farr, CEO & Founder of Weav.com

In this episode, we discussed what attracted J.R. to build a customer retention platform, how Weav automates your customer retention flow, and how it helps you analyze your customer experience with a holistic approach.

We also talked about JR’s experience in building a customer retention program from scratch, why he is focused on finding the right customers from day one, and when it’s the right time to fire a customer and why that means customers that use dark patterns in their product for Weav.

As usual, I'm excited to hear what you think of this episode, and if you have any feedback, I would love to hear from you. You can email me directly on Andrew@churn.fm. Don't forget to follow us on Twitter.

Mentioned Resources

Highlights

Time

What drove JR to build a customer retention platform. 00:02:49
How Weav goes into automating your customer flow. 00:04:36
Analyzing customer experience within your product holistically. 00:12:54
How to deal with customers that use dark patterns on their product. 00:17:26
How J.R. realized that finding the right customers is key. 00:19:33

Transcription

Andrew Michael  
Hey, J.R. welcome to the show.

J.R. Farr
Hey, Andrew, thanks for having me.

Andrew Michael  
It's a pleasure. Great to have you. For the listeners. J.R. is the founder and CEO of Weav.com and automated customer attention platform, Jr. is also partner and CPA policy scouts, giving people a fresh take on comparing and buying insurance online. Prior to even policies culture was also the CEO and co founder of Mojo marketplace that was acquired by the endurance International Group Holdings after the team had built the marketplace using Mojo to find products for their web presence. So my first question for you, Jay, is what drove you from building a marketplace to now founding a customer attention platform?

J.R. Farr  
Yeah, no, it's good question. So I guess that was 10 years of my life building quite an e commerce business. We also had a subscription aspect to the marketplace as well, where people could subscribe to a service. And then obviously, being acquired by a company like endurance international group who owns Constant Contact and Bluehost comm and hostgator.com. We were really involved in those companies as well. And so, you know, as a large organization and a large customer base, customer retention was real. And it was it was a real problem. And even at a company that size, it was, you know, was still something that we hadn't figured out completely. And it was something that, you know, I just got my head, like really into it, and I just couldn't let it go. And so, as we were building solutions, I wanted to, I guess, offer the same thinking and solution for everyone. And so I know that there's been a few products coming out that are doing things. But there's things that we feel like we're doing differently. And I guess today on the show Android, you know, I hope that we can kind of get into that more, you know, ideology and philosophical piece of why we're doing what we're doing.

Andrew Michael  
Yeah, absolutely. I find it interesting that you says, Well, I'd like the company and the size and the scale of endurance and social group that you still hadn't figured out, retention quite as much as you'd like. And I think this is one of those things that a lot of people think it's really simple to grasp and understand and be able to fix quickly. But once you really start getting into it, and trying to sort of tackling it, you realize, like what a big task it is and that it's not as simple as, right. Exactly. So tell us a little bit about weave then so you said you're trying to do things that others aren't and what is the secret sauce behind weave?

J.R. Farr  
So I guess, you know, it's more so what I think we could talk about today is just there's a Let me summarize it like this. It's interesting to look at, you know, customer attention in this way where at one point, a customer comes, and they they're comparing all the solutions, let's, you know, whatever, whatever industry you're in, there's a probably a handful of options that a customer can choose. And it's at that moment, they make a conscious decision to say, Look, your solution is the best option for me, the best one I could find. And then and then all the way you fast forward all the way to where the customer cancels. What happened in that period? You know what I mean? Like, what were the what was the was there something around the onboarding? Was it an issue with pricing? Did they get angry? Was it apathy? Was it What was it that led to that? And I think that that's where we're so hyper focus is trying to see more of the full picture to, you know, try to predict and analyze. Not even just, you know, obviously there's billing history, there's product engagement usage, there's how your customer support reps are handling the ticket queue. All the way down to even just like the company's DNA itself, you know, is that is the founders thinking transcending down as the as the company expands? And, you know, are they as focused on the way that they, you know, interact with customers or as focused on onboarding or does that make sense? Like there's a bigger there's a bigger piece to this around the why someone leaves? And we're trying to, we're trying to figure that out.

Andrew Michael  
Yeah. And it's a big, big job, I guess. Like you said, there's so many touch points to so many reasons that people could end up leaving your product, but I really like the fact that you sort of start from the very beginning and saying, okay, like, at some point in time, we were the best solution for our customer and somewhere along the way, we went wrong. How are you going about thinking like, figuring this out then? Because there's so many different reasons. So I think

J.R. Farr  
it was very, it was very intentional. So the name weave itself is is also intentional, right? Like you're weaving together all of this data and thinking and trying to understand the larger picture. But more. So I mean even where we started with the product, it's very very focused right now with customer churn, or you know, customer retention and churn. And we did that on purpose. So we could effectively reverse engineer everything because we feel like if we can start it, like, it's essentially the last time you interact with the customer, and there's so much learning from that, that can uncover the whole customer journey that they had with you. And so for, you know, so so we intentionally chose to start at the last point of your customer interaction. So we could, you know, go straight to that source and figure out what led to that. So that's why that's why we decided to kind of build it the way that we did.

Andrew Michael  
Nice and then so the idea then would be to sort of systematically move backwards up to the beginning point when I first decided to raise you and really try and get a holistic picture together. You said the the name weave was really deliberately chosen and is to bring together different points like What does it look like? What is the, like the roadmap look like? What are some of the things that you're looking to be bringing into weave?

J.R. Farr  
Yeah, so right now is the way the product sits right now is

we, you know, we weave together I get, you know, obviously billing history. So, you know, connect things like your stripe account, we have a JavaScript tag that we refer to as the octo tag that attracts product engagement. And even even the way that you view your customers, it's, a lot of times when you log into a system, it's it's user IDs, it's email addresses. It's not very, it's not really focused on the relationship that you have with the customer. I mean, if you think about whether it's brick and mortar or software, right, when you go into that coffee shop or that store frequently and you kind of get to know the owner, you get to know the people that work there and they remember your order and that, just that feeling that you get. And so we're trying to you know, with even with the product as it sits today, we focus a lot on just customer the relationship you have with the customer and who they are as an individual. And then obviously we marry that with their billing history, their product usage. And then you know, like I was saying before we, we do have options that are that are found in other products like payment recovery, and we have a hosted cancellation saver flow. So when customers want to cancel, there's this automated system that will capture the customer and offer them different solutions. So So yeah, again, so so right now in terms of the roadmap, we have the product as it sits today does, you know a lot of metric based stuff, a lot of product usage, a failed payment recovery, there's a customer saver piece, in terms of the roadmap, we're focusing next on doubling down more on our predictive ability to understand with all the data that we have start to predict a little bit earlier when someone's going to leave and so finding those at risk customers is something that we're hyper focused on for the next little while.

Andrew Michael  
Nice. And I like the facts as well. I'm not too sure how many other tools to combine sort of the billing data along with product usage data, who have their own scripts. So you said that you also have product you say scripted tracks product usage? Yep. Do you require customers to send specific events? Like, how does the product tracking work?

J.R. Farr  
Yeah, it's very similar. Like Think of it like, I mean, almost like the intercom script, right? And so you have to, you have to, we have to know if the customer is currently logged in Swift, another email address, which we attach it to. And so we can track once they're logged in how many, you know, simple things even like, once, once it's it takes about 10 minutes, it's just like a normal JavaScript tag, you add, you know, the ability to look up their email. So we can, we can identify its unique individual. But then obviously, we just track simple things like how many times they're logging in, in a week, if that drops from a certain amount, obviously, we're going to flag that if they how long their sessions, are they clicking you know, inside of the help desks or inside of your app or on the cancel buttons and what's that going to trigger and you know, all the way down to just the very simple things but then there's also, you know, work we're calling out all together with how long the relationship has been, how many fold payments Do they have on their file? And we're tying that all together to kind of give them a score and, and really identify who and when and why they're going to leave.

Andrew Michael
Nice. And I think you've probably been mothers have some interesting data points. And some of you it's actually been asked on the show a couple of times, is what percentage Have you seen in your experience? What percentage of companies MRR IRR is currently sitting is dormant? Meaning that people are paying for this subscription, but they're not actually using the services? There's something that you have access to a data point?

J.R. Farr  
Yeah, like, what you mean more like a zombie type of customer that just kind of it's just

Andrew Michael  
a pain.

J.R. Farr  
It's honestly I I don't have anything, I can't just give you a number. I can say that. It varies. It definitely varies on the type of industry, the type of product. And you know, the other thing that you said when that makes me think of is it's also interesting to see depending on the type of product or industry, how how it varies in terms of involuntary versus voluntary turn, there's a lot of industries that have or software's that have, you know, majority of their cancellation is actually from voluntaries rather than filled payments. And so it's, it's weird how that all changes. But yeah, in terms of your question, I don't have anything off top my head. I just it just it's all over the all over the map. Interesting.

Andrew Michael  
Yeah. Because this has come up quite a couple of times. Because I think most like software, as you said, that have the failed payments. And you'll be able to understand sort of in terms of numbers when it comes to churn. But combining the two to be able to see sort of how many zombie customers you have, I think so it's an interesting metric to sort of understand how engaged your customer base is and how much you're right. And you actually have, right, so you mentioned sort of like this whole experience and talking through some of the different touch points where customers could leave over time. And this is something I'm a really big believer in as well, in the sense that churn doesn't happen for maybe one specific reason. Like it could be a bug, okay, yes, and people leave Typically, it might be like a series of events that happen over time, or your product just never actually getting the value where needed to. So when you're thinking about this whole holistic experience, like, where do you see you taking it with? We've like, from which point in time when the customer first discovers to the end, like, how are you thinking about tracking this whole experience?

J.R. Farr
That's a good question. So, I mean, I guess I can get pretty specific in terms of the product roadmap, then I can also just talk a little more about some of the ideas that we have. But like I said, moving it moving backwards with trying to analyze all this data and do some more predictability. Then even like that, first time, a customer experiences software. So we've had a lot of customers asking for us to expand some tools for them to do some onboarding, because we have so much data for them when they're first using the product. Like even the billing history. We know when customers are currently in a trial, obviously, when we know kind of what the use is, is happening and so for them to be able to have some tools within weave that could influence the onboarding and experience that's like something that we're talking about heavily right now. And that kind of moves us a little bit further, you know, backwards, you know, to our kind of destination we're looking to do. So that's more in the immediate horizon. In terms of like the very, very first point, I think, I don't know if we'll go that far. I think it's more educating the rest of the organization through the data we have. So if you think about it, again, with we've the name, the tools that these companies are using, like software, I'm sorry, customer service tools like Zendesk, you know, being able to take the data that we have and funneling that by customer as an individual, and bubbling up that information to the support rep as they're talking to them, hey, this customer is at risk. This customer is a VIP, this customer is been with you guys for a long time. They know that they're there, they're Azzam because whatever you sit, you know, whatever we're going to call it or we're going to say it, there's a million things that this customer could be. And so it gives you that back to that full picture that relate Ship full story, that context. So when your reps even at the frontlines are dealing with a customer, it's a much more enjoyable experience of like I mentioned earlier where you're walking into a store, Hey, I know what you order you want your coffee black and you know you like your muffin or whatever it is, you know, it just feels so personal. And and you kind of get that come through. So I think those are a few areas that we're looking to kind of expand with the product.

Andrew Michael  
Nice. And for me, I think like, when we when we think about experience, I think a lot of times people just gravitate towards product experience. And definitely when it comes to general retention, like your product is probably one of the biggest levers you have to impact it. But I think more often than not, we forget that the product itself is not necessarily the piece of software that the end user uses. But people coming to your company, they see your product from the very first ad they see sort of packaging of your product and then they have with the support or another part of the product. And I think like when people sort of understand that and see the whole company is about product and you're a product company as opposed to a company that makes a product, you end up having this more holistic experience this more felt like a genuine and sort of seamless experience. When exactly.

J.R. Farr  
You know, I'm not saying not to you know what, one of the things that I was mentioning that our two offices obviously that this customer savor pizza when customers are canceling, it's this kind of automated retention flow that helps customers before they leave. And we offer options and we kind of obviously bubble those back up to the users and let them know why customers leaving But you just said something that made me think of this. But you know, a lot of times like we have this churn issue, but it's it's really like you just said it's a customer support issue, or even just as simple as pricing. You know, as the customer starts to use it, and they feel these constraints or they feel these, like I'm getting charged an arm and a leg to use this and I'm not really using these features. And a lot of times you know, it's hard for a product company understand that when they're just looking at the very end of someone's life cycle. You know, yeah, so we're trying to bubble those things up as effectively as we can. For sure.

Andrew Michael  
I think like every interaction you have with your customer, there's a sale that's made and other to selling them on why your company can solve their problem and deliver value or they're selling you on why your company's not good enough and right i think like if we realize like every interaction is an opportunity to impress an opportunity to retain and having the data points available to be able to tell you Okay, like we suffering a little bit in onboarding or we need to make changes to pricing the product is just really to to be able to make the sales

J.R. Farr  
one last thing as we're talking about this, you know, we've been the way that we've grown the company has been very, I guess, you could say selective. We don't we don't have any we don't do any ads. We don't do any it's definitely more like direct sales or referrals right now. And I guess the reason why is we we've been very selective with who we pick because there's been, you know, the consumers online, obviously getting smarter. And I think that a lot of times, we've dealt with companies that aren't willing to change, let's say their cancellation flow online, they don't want to offer Cancel button, they just want to have an email address, or you know, they have to call in to to cancel. And so a lot of times we, you know, will purposely turn a company away and say, Look, if you're not willing to kind of evolve and offer a delightful experience your company knowing it's not maybe it's not a good fit for us. And so we definitely are looking, you know what I mean? Like, it's, it's definitely a change for people. And that goes back to the DNA of a company that we're trying to kind of match with you. No,

Andrew Michael  
absolutely. And do you get many customers that come up like this where you they interact with your sales team, maybe with yourself and then you realize they're not a good fit and like using dark patterns, like you say, to try and avoid cancellations?

J.R. Farr  
Yeah, we've had we've had quite a handful that have come up for sure. Interesting. So you know, it's not like it's not like a It's not an aggressive conversation. It's just kind of like, Okay. Yeah, that's great. You know, like, we definitely This is what we recommend. And if, you know, it's not going to make our software very effective, and you're not going to be happy with us in the next few months, and so we might as well not even, you know what I mean? It's just more of an open conversation like that.

Andrew Michael  
Yeah, I think like these sorts of things is really, really short sighted. Because, okay, you might see an immediate bump in churn going down and retention increasing, but the negative impacts that they have on your brand and the negative like sort of taste you leave in people's mouth. And when it comes to word of mouth. I think the results enough to it's a sort of, like exponentially bad for you.

J.R. Farr  
Right, exactly.

Andrew Michael  
So where are you now at the moment, like how big is the team? When did you get started as well with we've?

J.R. Farr  
Yeah, no, it's good question. So all the companies I've ever built and sold have been bootstrapped. So we're not a funded company. We're very proud of that. And so we're Based in Salt Lake City, Utah, and we've got about six of us right now. We started working on the project couple years ago. And like I said, we're still we're thinking about, you know, maybe doing some more, I guess, traditional marketing efforts, like paid ads and landing pages and things. But right now, it's it's definitely been a, like I was explaining, it's, I don't know why we just have this very intentional. It's almost like the pressure of building a product in this space, that if you get some on this product, like, if you run a customer retention tool, and customers cancel, it's like, it's a scary thing, you know, so we're just we've been so selective with who we brought on to make sure that we've, you know, we're finding the right customers that we, you know, that will get that value out of what we've done. And so, yeah, so yeah, we're just we're just slowly and steadily growing, and it's been fun. And

Andrew Michael  
yeah, I love that sort of the pressure that you put on yourself building a customer attention. software that you can't afford to lose customers. And I really love as well like how the focus is on finding the right customers sort of where did that revelation come from? Like, obviously, it must have come from experience in past companies. But how did you go about sort of selecting the right customer? Like, what were the decisions and the thought processes went into that in the beginning with the team?

J.R. Farr
That's good question. I guess there's a couple things there. One is definitely built out of scratching our own itch. So we kind of knew there was an issue here based off the last few companies that we'd ran. Obviously, you know, right now we work with stripe, we're stripe partner. stripe is obviously one of the biggest subscription offering, you know, payment offerings. So yeah, and then I guess, you know, it comes from I guess, experience with running a couple bootstrap, but you don't you don't have a massive team and time and the resources to do make bets on a million things. And so we knew that going into That we had to make sure that we prioritize the right things and we prioritize the right customers. And I mean, let's be honest, I mean, a lot of it is definitely a gut and experience that we're leaning in on, right. It's not like we have it all figured out. But we're just trying to lean on that experience that we have and be real with ourselves that we don't have endless amounts of funding and a gigantic team to just go after everyone and every everything at the same time. So yeah, that's Yeah, so yeah, that's kind of how we got there.

Andrew Michael
Absolutely, because I think one of the things when it comes to like finding the right customer, and is often overlooked when it comes to growth is the impact of finding the wrong customer. And doesn't matter how much like what growth looks like and how many people need to be bringing to the door. That puts an impact on the support team. It puts an impact on the product team like so making sure that you as a bootstrap company, really know who that ideal customer is and really being able to focus and build for them. It really helps alleviate that pressure and that stress to have to grow when your company is not ready to grow or have to add support heads when you're supporting the wrong customer. And really not Driving value for the company.

Andrew Michael  
So the question I asked everybody that joins the show is let's imagine a hypothetical scenario now and you've decided to start a new job and you've joined a company and you come in and turn your attention is not doing well at all. And the CEO of the company has come to you and said, Hey, Jr, look, we need to get some results. First, I would like to put you in charge of this project. And we need to try and reduce churn, what will be some of the things that you want to do in the first 90 days to try and turn around and get some results for the company?

J.R. Farr  
I was wondering, you told me before the interview that you had this question, I was curious what it was, you know, what's so funny about this is this is this. This scenario is not hypothetical. This is actually happened to me while I was at insurance. This is the CEO came it was a new CEO came in said dear I need you to stand up a program for us around retention. So perfect.

J.R. Farr  
teeth, this is a little Question. So I'm going to try really hard to be concise and short. Like I said, like, I'm very big proponent of churn is something bigger, then it's symptom of something bigger. And so you need to, and also separating things, there's different codes, you know, I'll obviously pull out the cohorts. You know, because because because an early life customer in a trial, or in the first 30 days, or let's just say, you know, the type of product you offer, there's probably big checkpoints, you know, direct, you know, segmenting your customers in that way. And, and I would try to look for I use a lot of data, obviously, we live in a world we have access to a lot of data and try to get some something to give us a much more educated and analytical, you know, way I, I'm a tendency to work more with my gut than I do with data. But I think it's a good way to kind of steer you, right. So I'm not saying that you have to just look at the data and to be driven. I'm just saying it's going to give you a good sense of which way the winds blowing and then obviously Depending on the type of product, and where, you know, you see a lot of these companies, you know, I listen to every phone call, I could read every support ticket, sit down with everybody in the organization that touches the customers, learn their side, you know, learn to build up that empathy in that context. And that's gonna give you that gut feeling. Right? So you've got the analytical side. And then if you can go sit with the entire organizations or, you know, departments in your company and, and learn about how they're interacting where the process is, like, even down to simple things like refunds, like, Is it very process oriented or the support reps? Are they you know, are empowered to make on the fly decision making with refunds or, because that can leave a bad taste in people's mouth, you know, customers, so I would go and learn everything I could about it. So again, I had that real kind of gut and empathy piece and marry those and then I would, you know, from there, I would build out kind of the low hanging fruit that we could go after. So yeah, that would be my initial, it'd be my initial thing and then from there, obviously You'd have to, you know, depending on the size of the organization, you have to build up something that's a little bit more process oriented. So it could be, you know, distributed across the entire organization. But, you know, that's, I guess that's my answer. I don't know if that's.

Andrew Michael  
So you'd really want to just have like a good feel qualitatively, like throughout organization understand what customers are saying where their pain points lie, making sure that you align to the data that you see that you've been collecting. And then from there, sort of build out, like you said, those low hanging fruit that you're going to go after, and really enable the team to start reducing churn in that manner. Right. For sure. I think like, definitely, it's super important. This is unlimited over and over and over again, is like really understanding the customer as much as possible is going to be the key to sort of solving this and I like as well that you sort of said it's not just about the data, it's also having that sort of gut feel and that gut feel is being driven by sort of customers and what your company is saying and the pain points that customers have. So it's it's definitely not healthy. Just Have one or the other, I think it's really, really good to have a balance. Cool. So john, we actually we're running up on time now as well. Is there anything that you'd like to leave the audience with? Is any sort of thing that you'd let them know about? That should keep up or take a look out for any of the work that you're doing?

J.R. Farr  
I mean, no, I mean, pretty. I mean, yeah. I mean, you finally have the usual places, obviously, you know, if you ever just want to talk about this, it's something that I'm really passionate about. So I'd love to chat. And yeah, I mean, if you are dealing with this, I mean, clearly people listen to the show care about sharing, they care about customer attention. But yeah, just just yeah, I'm excited to see the shift that's changing. And I'd love to be able to talk to more people about their problems and and just just more interactions we can have together and share war stories and battle scars. I think it'll, it's only going to help improve the experience all the products that all of us are using every day. So it's a win win, you know,

Andrew Michael  
for sure. And if people listen to this podcast and they're not interested in trading and retention Like I'm doing a really, really bad job.

J.R. Farr
Cool. And yeah, no, this has been this has been great.

Andrew Michael  
It's been great having you. Thanks so much, Jr. and wish you best of luck now going forward. And we'll make sure to follow up in the show notes within the other things that were mentioned today and resources that people can take a look at.

J.R. Farr
Thanks so much. Cheers..

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J.R. Farr
J.R. Farr
About

The show

My name is Andrew Michael and I started CHURN.FM, as I was tired of hearing stories about some magical silver bullet that solved churn for company X.

In this podcast, you will hear from founders and subscription economy pros working in product, marketing, customer success, support, and operations roles across different stages of company growth, who are taking a systematic approach to increase retention and engagement within their organizations.

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