How customer support conversations with your customers can help reduce churn

Etie Hertz




Etie Hertz
Etie Hertz

Episode Summary

Today on the show we have Etie Hertz, co-founder and CEO of

In this episode, we talked about why Etie decided to double down on support and build, how it works, and how their customers use it to reduce churn. 

We then dove into Etie’s experience building his previous company Payment Revolution. How they prevented churn at the very beginning and how they made sure to stay top of mind. Etie then shared how they dealt with the customer transition between Payment Revolution and ShopKeep when they got acquired.

Mentioned Resources



Why Etie decided to double down on support and build 00:02:15
Why Loris decided to make the leap from lawyer to starting a tech company. 00:04:00
How Etie tried to prevent churn at the very beginning of Payment Revolution and stay top of mind. 00:08:20
How they dealt with churn during the customer transition from Payment Revolution to ShopKeep. 00:14:26
How works and how their customers use it to reduce churn. 00:19:35


Hey, Etie.

Welcome to the show. Thanks so much for having me. It's a pleasure for the listeners. You ties the CEO and founder of, providing real-time coaching technology for customer support agents, allowing your teams to increase productivity efficiency and the quality of their chat-based conversations.

Prior to founding Loris, ITAR started out his career in legal and in fact, Private equity. He then went on to farm the payment revolution, where he served as a CEO until it was acquired by ShopKeep. Uh, he then went to serve as the CRO for ShopKeep that was later acquired [00:02:00] by Lightspeed, uh, POS in 2020. So my first question for you tires, what drove you to start Loris, uh, coming from a background in legal finance and private equity to payments provider, you've now decided to double down on support.

Why is that? 

Etie Hertz: [00:02:15] So, um, Perfect how many again, and then for the opening question. So Laura's actually started out of a nonprofit in New York city called crisis tech farm, which is the largest crisis hotline in the world, all SMS based, um, that's 24, 7 free, very successful nonprofit doing amazing work, um, in the U S and now abroad.

And actually the, the idea for Delores came, uh, when, when private companies started reaching out to crisis text line, Saying, essentially we're moving heavily from phone based conversations into digital chat, SMS, email, and messaging. You all are the best in the world at calming people down in written form.

And you could teach us how to do that. So the original concept was actually to build training videos, empathetic training videos for large [00:03:00] enterprise clients, and then through training with some big brands. Um, folks essentially said, listen, you have this huge database and data scientists. Maybe you could do this in real time and sit on our customer service platforms because then everybody would know.

Yeah. So that was kind of, uh, how Loris was born. So I actually joined when, when that decision was made to make this live, uh, with data science and machine learning and live on top of customer service platforms. And I spent a couple of years ago. 

Andrew Michael: [00:03:26] Yeah, very nice. It's obviously interesting. Products come out of other pain points that others are facing and reaching out.

It's definitely like it's the best place I think to start is when customers are asking you for the price, uh, very cool. And then we spoke a little, what about your background? But maybe let's backtrack quite a bit and then we can come back to Loris at the end, but, uh, you started in legal and then made the switch.

Like, what was the motivation? Like how did you end up like from a lawyer to becoming like a software company. 

[00:04:00] Etie Hertz: [00:04:00] So I, I went to law school. I think I was debating whether to go into finance or going to law school. It was probably a coin toss, but I went into, uh, to law and to a big law in New York at a big firm.

And within days I think I started thinking I should probably figure out a way to get into business at some point. So what happens is very early on at a big firm, you get exposed to big companies, big deals. Um, and then as I was advising startups and VC. I ran into a lot of folks that weren't that much older than me that were building really interesting companies.

So I started to try to figure out how, you know, what kind of ideas I had. And is there anything that I could create, uh, to start my own business? I had a few buddies on the side that I dabbled in while I was at my firm. And, um, it took me several years to figure out a way out of big law, but the seeds were there really early.

Andrew Michael: [00:04:48] Yeah. And did you ever not come up with the idea of like getting rid of lawyers altogether? Because I think that's definitely I've 

Etie Hertz: [00:04:55] thought a lot about, I've thought a lot about them trying to [00:05:00] automate a lot of the mundane tasks that lawyers do, but for better or worse, Well, it's not going away anytime soon.

Andrew Michael: [00:05:06] Not going away. Yeah. Uh, it's it's such a weird thing for me that it hasn't been done by now, because I think like there's laws, you have a book like to follow and it's rules and essentially that's what, like a computer program is a group of like, uh, rules that you follow. I find it so strange. Nobody's really cracked this, even if it's just for one like specific use case and like focusing, like, for example, like startup, um, financing, like, um, surely by now we should be able to crack this and like few terms, few inputs.

And then, um, I've just gone through the pain point myself now as sort of going backwards and forwards for a couple of months. So 

Etie Hertz: [00:05:44] yeah, I mean, there's so there's certain things would definitely, definitely, I mean, safe notes and there, there are different things that folks are trying to standardize to make it easy on OnStar.

Yeah, but, uh, complexity can generate a lot of money for people. So for that reason card net card came in [00:06:00] networks and only are not going away. 

Andrew Michael: [00:06:02] Um, you then you made the leap, you started your own company. Uh, what was that company was payment revolution. What were you doing? 

Etie Hertz: [00:06:11] So, um, actually I left my firm to start an investment company and the recession that was actually before Pinot and revelation.

And so we did a bunch of deals, mostly distressed, and then the recession happened, which kind of flipped all of our plans upside down. Um, and out of that, um, you know, in that time, I don't know if you remember that time, but basically everyone I knew was losing everything that they had. And there wasn't a concept of a FinTech really, but, um, I had a friend who from undergraduate, was in the payments business and explained it to him.

And it was really interesting and it seemed like small businesses really had a tough time getting a leg up and kind of competing with bigger companies. Um, so our, our, essentially our concept was if we could provide them with interesting solutions and get them to be competitive with what other bigger companies would have available.

Maybe it will take us five or 10 years, but over time we could create an interesting business. [00:07:00] Um, so we kind of took the leap 2009 and started gaming revolution at that time, except from scratch. So, um, I went from, you know, like a big firm with a beautiful view, overlooking all of Manhattan to, you know, I'm going to gas station at seven in the morning trying to explain to people why the stain is network.

Andrew Michael: [00:07:18] Yeah, funny enough. You're not actually the first lawyer that I've had on the show. That's done something similar as well. Like, um, I think it was actually Nick Fogel, if I'm, I might be getting this wrong, but I recently joined the show and, um, he essentially went from being a lawyer to, he went to becoming a taxi driver so he could learn to code in his spare time.

Like he took a job as a taxi driver from a lawyer and it was actually coding like in his spare time while he was. Doing like done hours. It's quite interesting hearing your story. Um, but yeah, so. Talk us through that experience a little bit as well, like in the context as well, churn and retention potentially you started dealing with the business for SMB is predominantly, [00:08:00] um, typically it's, it's a tough space when it comes to general attention, because there's just so many reasons outside of your control, uh, that can lead to churn.

Um, so what was your experience like building the company, especially back at that time when, uh, these concepts were still relatively unknown and. You needed to fight an uphill battle in a lot of different areas? 

Etie Hertz: [00:08:20] Yeah. So at first it was really almost like going door to door, starting from zero. Build up a customer base because you want to get referrals and you want to build the network.

But at the beginning it's like a snowball it's very hard to get started. So it was a lot of face-to-face meetings, personal relationships with people, you know, every single client, essentially. I knew them. Um, so I could, I could be walking down Manhattan, uh, down sixth avenue and I see someone at a deli say, oh, Hey seats.

I can come over here. Something's wrong with, uh, with our technology? Can you come in here? That would happen to me on a weekly basis. I would actually like walk into places in the middle of the city. So, um, it was really. Exciting and difficult to get started. And then once you, you try so hard to get your initial client base going.

[00:09:00] If someone were to churn, it was like someone stealing a child from you. I mean, it was so painful. So we were very cognizant of, of limiting churn and trying to just grow our base. So we did all kinds of things to stay top of mind with our customers. We'd send them analysis, we'd send them updates. We stay kind of top of mind.

What's interesting in the payments business, at least at that time, there was this philosophy that you just signed someone up. You never talk to them. Because if you talk to them, they want to negotiate with you. They want to say their bank is offering something similar. There's all these other things. So, uh, we actually decided to do the opposite of be very hands-on.

So we were very, you know, our revenue retention was, you know, I can't even remember, but 140% in a year or something like it was, it was, it was insane. And so we did that and then we actually started partnering with, uh, Point of sale dealers who are going into different cities and selling payments technology point of sale technology.

So then our relationship was essentially not only with them, but their, their customers. So that relationship was even more important. You can't lose that customer because you would upset that dealer as well. [00:10:00] So the stakes just kept getting higher and higher. And then in 2011, I actually met the founder.

The first iPad based point of sale system, which was ShopKeep. And I said, you know, I think we can power payments for you in a really important way. And they do something special for your client base. And overnight they started sending us just a ton of deals. So we worked with them and worked a lot of companies that sold iPad based point of cell systems at the time.

And. And churn was everything for us. You know, if we didn't grow, that was one thing, but to lose customers was unacceptable. Right. So, yeah, 

Andrew Michael: [00:10:32] I find it interesting what you said previously as well. Like staying top of mind, because I think this is something that's overlooked for a lot of businesses. And, uh, especially when we think about like what's required to create a habits, uh, out of your product and your usage and like, you never want to be forgotten.

So I think obviously within payments. Quite different than the sense that like, it's something that works behind the scenes and just set it and forget it type of thing. Um, but then that's also leaves you, like you say vulnerable to, um, they're making the [00:11:00] switch because they don't ever remember speaking to you in the beginning.

There's no relationship that's been built there. What led you to this insights as well? Like what drove you to say, okay, let's do this differently. Let's like, make sure we stay top of mind, giving updates, giving analytics. 

Etie Hertz: [00:11:15] That's a great question. I was thinking about this recently. What made us start? I think that I had some customers say to me, when you signed me up, you promised X, Y, and Z.

Um, I don't know if you did it. So I said, okay, every month I'll I'll send you it. You know, he told you X, what do you this, why would it be this? Because it would be that. And we started doing that, not just for the existing, but for new clients. And then someone said, no one's ever done this before. Like usually I sign up for a service and then I never hear from them.

This is incredible. So that's kind of something that we tried to start to instill with folks. Um, we thought that was kind of a differentiator in the space. And, uh, and then also if something goes wrong or they're not happy with us, at least maybe they would tell us there's a risk of training. The issue of payments is kind of unique.

If your customer leads, you want me to, after they [00:12:00] left. So right. If you're, if someone's with you and then suddenly they're going, I go, they went to square, but I was still in a folder. Maybe we do it on something 

Andrew Michael: [00:12:07] it's interesting as well, because I think like the are businesses where. The use case is not every day where you want to stay top of mind.

So I think like we talked about this on the show a little bit before, as well as like a company like Zillow, for example, where you go to them to buy a house, but you don't buy a house every day. Um, and this example, I think actually it's from a first herder to Reforge it's really great material on general intention.

Like there's courses now, um, headed up by Brian Bell. I think Andrew Chen was one of the original writers as well. And Sean class, um, But, uh, Casey wants to do all, but the, the, essentially what they realized at Zillow was that, yes. Okay. It's one thing like, uh, having an using our service, but then we really want to stay top of mind.

So the next time they want to come round and like buy a house or use a service that, um, they remember us and they we're the ones to come to. So somebody like next time, maybe your customer has another payment [00:13:00] issue that they need to solve or solution that they're looking for. Their immediate response should be to come to you as opposed to looking and seeking for the solutions and what they ended up doing, which was really, really interesting was.

They put together a Zillow estimate or something it's called like a Zillow estimator, where they give you an estimate of what your house is worth. So they said, okay, you're going to buy the house from us. But, um, what's the other thing that's going to be related to your house. You're going to want to check the valuation of your house.

Is it going up? Is it going down is worth it? Well, and they were sort of like an excuse to stay in contact with their customers to give them those updates. Like you say, like, this is what we're doing for you. Like you bought this house in this area. The value has gone up, it's gone down, uh, and then that really sort of keeps you fresh in people's minds.

It connects you help you create that habit that you need, uh, for attention. So, 

Etie Hertz: [00:13:45] and so, especially, especially when something's commoditized, everything ultimately becomes commoditized, but in a business like pain, if it's monetized. So now you could argue competing with a lot of folks at the same time.

Keeping your brand top of mind is, is huge. 

Andrew Michael: [00:13:57] Yeah. And then you went on then. So you mentioned you [00:14:00] started building this relationship, uh, with ShopKeep and, uh, they were building sort of POS for iPad. How did the eventual sort of acquisition come about? And obviously they were sending you a ton of questions, a ton of customers, like you built a really good relationship.

Like what was that period like? And then maybe talk us through like how you transitioned your customer base into theirs without losing customers or these tried not to. 

Etie Hertz: [00:14:26] So we worked with them in a bunch of other companies like them iPad based point of sale systems. A big deal back then when they come out, you realize you could run a business, a restaurant, a retail store, um, with that.

So we realized that that was kind of the future. That was our bet. So they worked with them and a few of their competitors, but then we got very close with them. We had some shared office space in New York. We also set up an office in Chicago and we started, you know, we were there a lot. We trained a lot of their sales folks on how to talk.

The industry about payments, about the integration of point of sale, about a book, a bunch of other things. So we were, we were very, very intertwined and [00:15:00] how the sale ultimately happened. You know, we talked about it for a while and we were kind of opposed to it. We want it to stay autonomous. And then we realized the market was getting big and people are going, gonna consolidate, and it'd be pretty hard to go along and do what they were doing.

Um, we had a great relationship with them. It was, it ended up being in hindsight. What up six years ago, it was, the deal was great. It made sense for everybody. Um, we were able to really like help their payments, business explode. And so we had a lot of customers that were shared, so that was obviously easy.

And then on the new ones, uh, we kind of maintain the same sort of like white glove service. We had the customer care team at ShopKeep, you know, it's another, the most important clients and kind of ensure that that relationship continued and it was seamless. And still to this day, there's. Yeah, dozens and thousands of customers that are still, you know, on that platform.


Andrew Michael: [00:15:50] yeah. And interesting, obviously it makes your life a lot easier when you have a lot of shared customer base as well. So that the transition then becomes just a little bit natural for the customer. They can say, okay, I'm using both [00:16:00] services already. They just became one. Now it's a little bit different, I think from the perspective of, yeah.

You are with us now, you with this company and you need to get into line with their rules and regulations and how they work. So 

Etie Hertz: [00:16:11] that's very tough, especially when you know, the smaller company gets bought by a bigger company. Oftentimes the bigger company is worried about other things, maybe. Or, and they care more about growth right now.

And then you say, no, no, no. These folks have been with us for years. We have to take care of them. So they were very good about that. Yeah. And that really helped keep us keep trombone. 

Andrew Michael: [00:16:27] Yeah. Yeah. Because like you said, typically there might be sort of, this doesn't fit in with our strategy. This is not our ideal customer profile.

Like we're going to drop all of these customers and you end up, like you said, like, where's your baby in the beginning, you felt everyone lost. Then you lose all of them at once. 

Etie Hertz: [00:16:40] Exactly. Absolutely. 

Andrew Michael: [00:16:42] That's fine. Cool. So, um, obviously then, like you spent some time there, uh, you went on to become the chief revenue officer, uh, Chubb, like.

In the context of that. So you were leading the sales team, um, themselves, when it came to churn and [00:17:00] retention, how much did like retention play into the initial sale and how were you aligning sort of your, um, sales teams, like goals with the company's longterm vision and longterm growth? 

Etie Hertz: [00:17:15] So I would say that the main way that we tacked it was, it was mainly a sales and marketing joint effort.

So what was happening in the space? I used to say that there was not a, you know, there's no one else in that ecosystem. You'd rather be than the point of sale company because when a small business opens, they basically call you saying I'm going to open in three days. I need technology now. So you're, you're kind of their first phone call or not on their lease, but then they really need you.

So you can really help them get software. You can help them get payments, maybe a loan. There's a bunch of other things, loyalty gift cards, et cetera. And we try to be very consultative and what we did, and we started creating packages to make it really sticky, because what happens is if you're selling, you know, if you know that this customer ultimately will be the basket of eight, thanks.

If you only sell them. [00:18:00] There's five chances. Some house is going to take that customer from you somehow. So the stickier that you can make it the better, um, they trust you more also, but then it's just there. It's so easy for them. It's so frictionless for them to stay with you that you'll, you'll ultimately see churn go down dramatically.

Um, and also a big part of that is pricing. So we spent a very, very long time thinking about pricing originally shock, even at almost all the point of sale systems were monster. Um, and then some transition to square was just charging you by transaction, which was actually kind of expensive. And no one had started bundling these things into longer term contracts.

So we started doing that and that was really, really helpful for sure. So that was your solving turn on the front end. 

Andrew Michael: [00:18:43] Yep. Uh, and interesting as well, like you said, looked at pricing, was that sales specifically looking at pricing, the company as a whole, like who would lead a project like this in this. So, 

Etie Hertz: [00:18:55] uh, we had an amazing CMO, um, and, uh, We had a great team on [00:19:00] a great FP and a team.

Um, so basically we combined, we melded our minds together to, to kind of test a few things, see if they worked for them out in the market. And, uh, it was, it was a big driver for us. Yeah. 

Andrew Michael: [00:19:11] So essentially like as a sales team though, you really don't. Combining the services. So like making it more sticky, servicing them in multiple different ways.

That's almost in some cases sort of like a onboarding customer success experience where you're trying to get them engaged with your product as much as possible, but you're front loading that from the sales perspective with really like putting together pricing and packaging to enable them to take all the different features.

Very cool. Uh, and then fast forward to today. Um, so. Laura is that AI? Um, obviously we, you chatted briefly about it in the beginning. You can now. Take technology that sits on top of other, like help desks and software and can help your support team solve difficult conversations. So I think obviously in [00:20:00] the context of general attention, this sounds like a dream and to be able to service your customers better, talk us through a little bit better, how it actually works and how you see customers of your successfully using it.

Etie Hertz: [00:20:13] So what's happening today in the, in the customer service space is, you know, we thought something like this would take years to happen and COVID has really exacerbated some of the trends that we had seen. So folks are moving heavily from phone-based into digital. I consider digital chat, SMS messaging, and email.

And what happens when you move into digital is everyone gets excited, except for know if on the phone call, you can only talk to one person at a time in digital, theoretically, you can. Maybe two, maybe 300 or more folks at a time. The problem is, is folks or brands are growing really quickly. And they're outsourcing a lot of this know offshore.

They experienced all kinds of issues. So they're pushing agents to handle a lot of conversations at the same time. And also agents are typically worldwide. So someone in Asia might not empathize the same way as someone in south America. Then they're handling X [00:21:00] number of tickets at the same time of people who are some are upset, some are fine, some are happy and juggling that cognitively bouncing between tickets is super difficult.

So actually explaining, um, you know, that someone is upset and here's the way you should respond. And here's suggested techniques and here's suggested language. Really improve the conversations immediately make those conversations much easier, much faster to take. So we see boosts in, in C-SAT and NPS, and we also improve efficiency dramatically.

Mostly in the most thing, honestly, is the agent reactions are the MPS scores that we get from agents are through the roof. They're really thankful cause it's a, it's a tough job. And, um, another thing that's happening in digital channels is folks are putting in chatbots and they're putting in self service tools.

So a lot of the easy stuff's going on. So the agent that used to deal with some easy conversations and some difficult ones is now inundated with difficult. So that job is really, really hard. Um, so any, any help that they get, you know, they're really appreciative and we're, we're happy to do that. 

Andrew Michael: [00:21:58] I as well.

[00:22:00] In companies you don't empathize with very well, like within supports, like, uh, now that you've said it as well, to me, it's like literally in support, you're spending all day just dealing with shitty conversations and upset people and trying to solve problems. Obviously there's the nice cases. Do you hear about internally where we solve the case?

Case and the customer's super excited and you see the not smiley faces and emoji, but we don't probably see all the underlying, like really, really bad conversations that happen. And like the abuse that you must get as well and support. Uh, so, 

Etie Hertz: [00:22:33] and it's all day, right? It's all day. It's thinking about a shift that's, you know, 6, 8, 10 hours with wherever.

I was upset at you. It's hard to understand how upset they are talked to. It's hard to put yourself in their shoes and that's kind of the job of agent, right? So that's a really, really difficult job. 

Andrew Michael: [00:22:46] And it's so easy on the other end as well. Not to get frustrated like, uh, for me as well. I got super upset with myself a couple of weeks ago where I was on a call with a support agent trying to solve an issue that had been going.

And it was like a critical moment for me. Like I was [00:23:00] internalizing that a lot of stress that day and actually like got really upset with the agents and the. As soon as I got upset with him. Dude. I'm really, really sorry. Like, this is not cool. Like, uh, it's me, I'm stressed. I come in a bad mood today.

There's not to do with you. This is, and like, I immediately backtrack, but afterwards, like I was just thinking as well to myself, like that was move as well on the corner, but it's happens like so easily. Like people can get upset and not like I've, I've seen many people get upset with support calls, like just hearing or even at restaurants and things like this.

And, um, yeah. Building something that can help them in those situations to sort of understand and empathize. And you mentioned like a couple of other things that were interesting is like different countries react in different ways. They empathize in different, uh, places. So the tone, the way you respond can be completely different from country to country as well.

Nice. So your, uh, the product itself, then obviously one it's [00:24:00] like creating better experiences for the customers. Uh, they're solving, like, where do you see this then going next? Like, what are the use cases? Could this same scenario be applied to? Is there something that's in the plans for Lauren? 

Etie Hertz: [00:24:13] Yeah. So what's what's happening is as the easier conversations go away and get automated, then the humans job, the judgment is more important.

So those, those are just going to keep getting more difficult, not theoretically, you know, you could say, if you've got to have this conversation as a brand, I want to make it as positive as possible. So there's a lot of places this can go within this world, which is some companies want to upsell with their care team.

They want a hybrid team. You know, we like to say that you sign up today for so many products and services just by downloading it. That the only time that customers and brands really interact is through customer service. So people are realizing that that is a really important pipe, right? That, that conversation flow is really, really important.

And that's really a chance to impact the brand and to make the customer happy. So, number one, you want to make sure that they don't churn and they're not upset, and it's not a horrible conversation flips out as [00:25:00] maybe this can be a great conversation and the reason that they love you. So that's, that's certainly coming.

Uh, we've had folks actually ask us about, you know, integrating Loris into their inner company, conversations into slack and things like that. Um, But this world is, is huge. Um, it, it's not going away. It's, it's growing at an incredible pace and more and more folks are moving into the synchronous, into the chat and messaging world.

So these conversations are becoming more and more important. So I think there's. Plenty of opportunity within this space. 

Andrew Michael: [00:25:28] Absolutely. No, I think one of the interesting cases I read quite a few years back and I've always loved the notion and the concept and actually seem to play as well at Hotjar is, um, the idea of support driven growth and softened.

People under utilize this support teams and they just sort of see it as like to solve problems. Um, but like you said, like a lot of times, like the only communication you're gonna have with your customers is that touch point with the, uh, support staff. And that's an opportunity to sort of push them to maybe something interesting.

I think it was helped Scott, that first mentioned we actually, [00:26:00] uh, interviewed, uh, the head of product. I think she's the CPO now Mariah, and we're discussing this topic as well in the sense that. Support driven growth can be a thing and you can actually utilize your support team to actually push people to new features, to things avenues.

So obviously done with tech, and I think that's something that Loris can come in is that you can sort of gauge the sentiments. I caveat able to solve the solution of this problem for the customer. And then while you have them sort of push them to something new and interesting and saying, like I noticed in your accounts, you haven't tried this feature out.

This could really help you with X, Y, Z, and it's sort of a really big missed opportunity. Yeah. How are you handling this at Loris yourself? 

Etie Hertz: [00:26:39] Um, so we have, so we sit on top of platforms like Zendesk, Salesforce, lab, person, Twilio, and growing, and. We have the things that we measure, urgency, sentiment intent and things like that.

So, you know, we're, we're predicting kind of what the, what the responses should be, not just from a empathetic point of view, but from a solution point of view, we also give [00:27:00] clients the ability to kind of work the flow, to edit the flow of different conversations themselves so they can have. We call it touch points, but they can have points where they say, this is the intent.

This is the submission, and this is the topic things are going well, you might want to remind these folks for example, that there is a subscription model available. Uh, you know, we spoke recently to, uh, uh, a huge pet insurance company. They basically said, you know, most, most families as something like 50% of households who have one bit of a second.

If a conversation's going well, you might want to mention that, Hey, that, you know, if you have an extra, you have another pet, we have a special deal. So this is, you know, it's early days, but people are exploring all of those things. Um, and one of the things I'll just mentioned based on what you, what you just said was, um, you know, her folks that look at the customer service conversation as a cost center or something, maybe you want to just deflect it on habit.

If you have it and it's good. Not only can you create a great brand and upselling opportunities and loyalty, et cetera, but there's thing about all the information that you get in that conversation about what your actual customers think [00:28:00] about you. It's not a sales conversation of a prospective person.

Who's dealing with a lot of things. Someone's actually using your product, right. Do they like you, uh, what do they think about you about your competitors? Do they have issues with your product? There's a tremendous amount of insights that you can get from that conversation that we surface for folks that is super interesting.

And then once you have that data, you don't want to live without it, right? Because it gives you a real leg up on company. 

Andrew Michael: [00:28:22] Yeah. We also discussed this in a previous episode. Um, the concept of like using, uh, this customer support data that you have to be able to predict and understand churn. So more often than not, we look to try and exit surveys and we rely on those to sort of understand where the problems are.

Things happen, where you could probably predict a lot of these things earlier on in the cycle. Understand the problem. Better. Like you don't need to look at quantify your tronics and surveys to understand that you have a problem in your product. Like that's coming through your support desk and, uh, being able to effectively take advantage of that is another great channel.


Etie Hertz: [00:28:58] totally. So what we see [00:29:00] is most folks get survey. Maybe eight, maybe 12% of the time through that, or maybe manual service at QA, we score a hundred percent of messages. So if you're just scoring, you know, typically the service that you get is you get some, some great ones from some horrible ones. You don't really get the middle, the crux of most users and how they're using your product.

So if you get insights into a hundred percent of those conversations, think about all the things that you learn. And then you have a much better view. We say like, you know, 360 degree view of what's happening. 

Andrew Michael: [00:29:27] Absolutely. And you also obviously have all the context of the customer, the history. So if you want to go back in and take a look, you've got a little bit very cool.

I see we're running up on time as well. So I want to make sure we save for a couple of questions. Ask every guest. Um, first question is, let's imagine a hypothetical scenario now, uh, you join a new company. General retention is not doing great. And, uh, the CEO comes to you and say, Like, we really need to turn things around the tide.

Like, uh, we have 90 days to make a dent in our attention numbers. I'm putting you [00:30:00] in charge. You need to go and fix this, but you're not going to tell me that you're going to go and speak to customers and understand the pain points and then figure out the biggest problem and solve that one. You're going to pick something that's worked for you in the past to reduce churn.

And you're going to run with that. What would you pick?

Etie Hertz: [00:30:19] Is there any other information that I have, do I know what the. What the pricing looks like are people in cotton commitments are not in commitments going to get access to that information. 

Andrew Michael: [00:30:27] There's nothing like that. So, I mean, you can, you can make up the scenario, like pick something that's worked for you in the past that was able to reduce a churn relatively quickly.

Um, cause there's limited amounts of things you can do. I think in my opinion as well. Yeah. 

Etie Hertz: [00:30:42] I mean the first thing that's top of mind is that you want to look at some data, right? You want to look at, if you can't speak to someone, at least look at some churn curves and see what's true. Early on and then has it gotten worse?

And if so, can you pinpoint why? And it's a really, you know, this right? If you can get down a real long rabbit hole here, because [00:31:00] most people don't understand where, where it comes from. So usually you'll see SAS companies, for example, at the beginning, churn is great because all of their traffic is organic.

Then they start buying and then when they start paying for leads, they're getting folks that might not fit as well. So you can see a drop off there that would. At first, the first one is that I would look at something happening in the marketing funnel. It's bringing in a different kind of customer that might not be a great fit for this product.

It's an inevitably the answer is gonna be yes, in some respect, right? Unless you're doing, if it's all organic and it's dropping off, you have a huge problem. Maybe, maybe you don't have to go to market fit. But assuming that you're trying to mark and Charles and trying to go through PPC or affiliates or something, something else you may have picked up a channel that seems to be working for marketing, but it's really not working for, for the business because the churn is, is going up.

So then I guess the next thing is, you know, can you do something about that? Is there some something to. That you could offer folks that are in a similar boat that would make it sticky for them to stick around for you. So is there [00:32:00] something that they thought your product did that it doesn't do that you could solve or they're looking for a feature that you could build?

Um, there's a reason men and are disappointed. They expected something and they didn't. So that, that problem is either a product problem. It could be a sales problem. Sales might be offering something that's, um, the product's not doing it's. Somewhere in those two departments, you're gonna find, you're gonna be getting to begin to find the answers to do something about it within 90 days is pretty difficult depending on how big the businesses, um, and how big the clients are.


Andrew Michael: [00:32:28] Yeah. I like how you sort of default to the top of the funnel and really luckily. Uh, that's where the issues lie, essentially. I think to your point as well, like in the early days, churn can look really good. A lot of times this gets masked by growth as well, because the, the faster you're growing, um, the less like churn is visible, but then slowly over time you started to grow ceiling and then it really becomes apparent.

And definitely, like you said, Things becomes channels, like having that channel fits and knowing that you're bringing in the right customers through the door. And [00:33:00] obviously it's natural from like a sales person to blame marketing. Um, bye bye. Because I've also, we've had on the show that like sales teams just selling to the wrong leads as well.

So like, or overselling, and then you don't have a good product, like, uh, so yeah. Um, but definitely like. Huge impacts that can be made just early on in that funnel, understanding like who you bringing through the door, what are their expectations? Does your product meet that is the sales team selling to those needs or are they overselling and really driving last question I'm interested in then is like, what's one thing that you know about tryna retention today that you wish you knew when you got started with your career.

Etie Hertz: [00:33:41] That's a great question.

I think that I would say most people in my view, they don't either. They people think LTV means different things and LTV has everything in it. Right. It has growth and that's true. Um, I've, I've found that a lot of people. Companies [00:34:00] investors, the market, they don't, they don't understand how to distinguish between the lifetime value of customers across different companies.

How do you measure that? What's the timeframe, what's the discount rate that you take on that? So a lot of companies look like they're made, like you've just said, churn might look great because you're going to use it. Um, not revenue number or something. So you'll say, well, I lost a lot of co I lost a lot of users, but the ones that stayed, they grew.

So it's masking your churn and in a certain respect. So there's a lot of inputs. You know, and to LTV that I think most folks don't quite get. Um, I wish I would have understood it very early on because it makes you value different opportunities, different companies, different spaces in a very different way.

If you can really understand, is are their clients really sticking around as long as you think that they're sticking around, are they really growing at the rate that you're growing? Because when you mess them together, you get these fake numbers that people talk about where you really don't understand whether their business is healthy or not.

It's kind of a generic, I don't know. It's kind of a bigger 

Andrew Michael: [00:34:56] one. Well, I love this point as well, because I [00:35:00] think it's like, there's actually one of the very big reasons why I never talk about specific numbers on the show or never really give benchmarks because I think it's, it's really subjective. Uh, like what's a good churn rate.

What's a good growth rates. Like there's so many different variables that have this that'll impact. What's good in relation to your business. So, uh, this is something I always stray away from talking on the show. Talking to benchmark is really nervous. Cause I think it really depends like on so many different factors and like you just really need to become an expert on your business and understanding those leavers that you need to pull, uh, to build a healthy, uh, business, but great point.

Nice. Uh, so, uh, see, we, we, up to the end of the show now, is there any final thoughts you want to leave the list and as with like anything they should be aware of that's coming out from your side, how can they keep up to speed with your work? 

Etie Hertz: [00:35:47] Uh, so you can find a saw on, uh,, uh, Twitter as well. Uh, I just think that the world is moving in a really fast way.

This is really interesting topic to think about churn. I think that [00:36:00] folks really need to keep it top of mind, always. Yeah, especially interesting cause for growth. So that's what most folks are talking about. Um, but turn is really how you keep your brand strong and how you keep your customers happy, how you get word of mouth to continue.

So very interesting topic. I really enjoyed the time today. I really appreciate it. 

Andrew Michael: [00:36:19] Thanks very much. That's been great. Yeah. My view on is all like general attention is if you're building a subscription business and people are canceling your subscriptions, you don't really have a business, you just have a leaky bucket.

So, uh, I think it's super, super important. Um, and yeah, thanks so much for joining us today. It was great learning from you and hearing your stories and experiences. So best of luck now, going forward with the company. 

Etie Hertz: [00:36:40] Thank you. Really appreciate it. 

Andrew Michael: [00:36:42] Cheers.


Etie Hertz
Etie Hertz

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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