How to align feedback to understand your ideal customer profile and tackle churn
CEO & Founder
Today on the show we have Lauren Culbertson, CEO & Founder of LoopVOC.
In this episode, we talked about why Lauren decided to build LoopVOC and the important role leadership plays in ensuring the alignment of customer feedback across a company.
We also discussed the dos and don’ts when transitioning an on-premise product to the cloud, the importance of segmentation when it comes to making great product decisions, and the steps they take to identify their ideal customer profile at LoopVOC and why it is a constant evolution.
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.
RecommendsAberdeen Group: Business Value of Building VOC ProgramAdvanced Voice of Customer Analytics: Get Out of the Survey Rut and Start Winning at CX
- 9 Steps to Repeatable, Scalable, and Profitable Growth
- Loop Blog: Anticipating customer needs in unprecedented times
- Aberdeen Group: Business Value of Building VOC Program
- Customer Think: Advanced Voice of Customer Analytics: Get Out of the Survey Rut and Start Winning at CX
Andrew Michael 0:00
Hi, Lauren, welcome to the show.
Lauren Culbertson 0:01
Hey Andrew, great to be here.
Andrew Michael 0:03
It's fantastic to have you. For the listeners. Lauren is the founder and CEO of Loop VOC, a voice of customer software for SaaS companies to provide them with faster and more affordable alternative to traditional market research. Prior to the LoopVOC, Lauren held several roles such as director of solution marketing, and manager Product Marketing at Blackbaud, where she was accountable for delivering 200 million in ARR across five of their products. So my first question for you learn is what drove you to build loop voc? Was it a niche you had to scratch before from your time at Blackbaud?
Lauren Culbertson 0:36
Yeah, so absolutely. I was at Blackbaud during a really interesting time in their company history going from an on premise legacy software company transitioning to the cloud. So we were used to operating with customers that were signed up for really long contracts, kind of upfront payment and ongoing maintenance. And as a result, we never really had it in our DNA to know how to think about customer churn. But moving to the cloud model, which was really scary at the time, because there weren't a lot of good examples of companies that have done it successfully, like this was back in 2014, was really changing that culture internally to be able to understand what customers needed from us on an ongoing basis so that we could actually pivot faster to make sure that we were bringing in enough recurring revenue to sit stay alive. So one of the biggest tasks that I was faced with as part of this transformation was figuring out from product marketing perspective, how we were staying on top of these customer needs. So we were used to doing these big, heavy market research surveys once a year and we'd asked customers and prospects what they liked what they didn't like what they needed. And we would reference that data for years at a time, which made more sense when you're developing a product with a waterfall methodology where you're kind of planning what you're going to do and executing it across the year. But moving to an agile framework where we actually have to adapt to how customers are behaving and thinking, it became clear that we needed a different way to source customer feedback. And it was more important that we did that. So I got a taskforce together to start listening in on the places where customers were already giving feedback. So we had people listening to sales, phone calls, reading through CRM notes, reading through support tickets, online reviews, we come together and have daily stand ups on what we were hearing. And it was really amazing how fast our company can move. We were about 4000 people at a time and we were moving at the pace of a startup, being able to say Here's what we're hearing, here's the decisions that we need to make. And let's make these changes now to respond to our customers. And so that's really where I saw the power of how a new way of listening to customers could change the momentum of a company, especially software companies. And so I was really, really obsessed with the idea of changing processes. Then I was exposed to the form of data science called natural language processing, which made me realise that there could be a technology to actually improve all these manual processes of listening and really change the entire atmosphere for how subscription based companies are listening to their customers. So Loop was really created to be a simple and affordable alternative for software companies to collect data from everywhere customers are getting it from online reviews, support tickets, survey notes. And we use a natural language processing, which essentially is text analytics that scans through all of the text and then bubbles up key topics and trends automatically in dashboards. So customer success and Product Marketing Leaders can move to just understanding the data and taking action on it versus the collection and analysis piece. That's what we try to automate. So that's a really long way of sharing my story, but I thought it was relevant kind of for what you guys.
Andrew Michael 4:39
There's a lot in there that I want to unpack for sure. So the first thing I think was very interesting that you mentioned, I think, was that transition from going on premise to cloud. I think this is something as well, like you said around 2014 I think I remember like Adobe switch when they move to the CC must have been around the same time 2013 2000 Maybe. So definitely, like an interesting time, like people still unsure of if this was a good business model or not if it was gonna be a good move, like, what was that time like, at Blackbaud? Like, what were some of the mistakes you think you made at the time and some of the things you think you did really well in that transition?
Lauren Culbertson 5:19
Yeah, it's a Great, a great question. And, you know, I think one of the biggest mistakes was to your point. It's a scary jump to make. There were not good examples. Adobe was really the only one and they haven't made it to the other side yet. When Yeah, right. And when you think about just the economics of this move, it's and I'm sure you've talked about this on the show, it's like it's, they call it swallowing the fish because you're gonna have this dramatic decline in this one time revenue that is you're addicted to getting, but you're going to start building up this incremental revenue that is much more stable and predictable. At some point,those two curves meet. And that's when you get to the other side. And experts at the time are saying that for a company of our size that would take between five to seven years. And that really we are Blackbaud has focused on serving the nonprofit market. And it was really, I think, a scary move for executives to make because we were pretty large and we were the market leader, and the risk of failure, I think stoled us too longer than we should have. So the number one mistake I think was waiting as long as we did because it allowed other startups and established companies like Salesforce, who were cloud native to really take a big part of our customer base away from us. It really take took we had a new CEO that started in 2014 that came from a cloud SaaS company and he that was one of the first decisions he made. And I thought that was extremely important for blackboards history. What I think we did extremely well was we really tried to involve every function of the organisation in the change. So from a culture perspective, there was never a more fun time now I wasn't there when we IPO. So that was probably a pretty fun time to. But for me, I was there between 2011 and 2018. And the time that we were transitioning was one of the most exciting times in my career because you really felt there. And, you know, from the frontline of it, the the model felt like it was turned upside down, where we were truly listening to our customers to our sales reps to our support reps, customer success, like everyone was being heard and felt accountable for the direction of the company which was crazy because 4000 people that's really hard to do. So I think that was some of the best the best ones Just really paying attention to the culture and the processes to get everyone on board. I think some of you know, like, when you're creating a totally new business model, there's a lot of strategic implications for Do you spin up something new that's completely separate and kind of let it live alone? Or do you use your core business model and and pull people from their existing jobs to also work on this new thing? I think that one of the challenges was we did the latter meaning that everyone was kind of responsible for both the new and the old world. And sometimes hard decisions have to be made, you know, the to sacrifice things staying the same versus kind of going to this new world. And yeah, so I think that was one of the challenges was kind of trying to straddle both worlds at once.
Andrew Michael 8:57
For sure. And you mentioned as well that you Sort of we're operating in a waterfall style fashion. And then we're to switch to agile. And that's when sort of customer feedback and having this immediacy became really, really important for the company. How did you go about this in the early days? So you mentioned you went and sort of take a look at the different channels that you had in support and sales. And I know this is a big challenge. I think it's obviously what your product solves for. But typically, you have like a lot of information about your customers and the voice of customers, but it sits within specific product teams or marketing team or customer sees. And very rarely do you get sort of this overview picture when you walk into a company that everybody has the same understanding of what the customers are saying what their pain points are. How did you tackle this Blackboard? Going into it when you're looking at these different channels?
Lauren Culbertson 9:44
Yeah, so that's a great question. So essentially, the way that leadership made this a cross functional priority for the company transitioning to the cloud was the first step in making it so everyone was bought in to staying on top of how customers were reacting to the change. And so and this is something that, when I'm talking to software companies today, one of the hardest parts is, in order to effectively get that view, you have to have leadership, give the order top down. It is so hard to get every cross functional leader aligned without having someone say this is your priority because it almost inherently says you're going to have to focus on priorities that are outside of your core function, because you're gonna have to pass the baton you're from your function, from example sales to services, like you need to be listening and understanding how that transition is going versus only being accountable for your core function. So leadership, giving the order that this is the company's number one priority, the CEO attention Did these weekly meetings we would have to review feedback 100% key to this working was that because everyone showed up, every cross functional leader showed up, and we have those meetings on Thursdays, where we would review the major challenges coming out of customer feedback on Tuesdays, all of us would get together. So we had representation from success support product, we had renewals at the time, we were, you know, maintenance company, sales marketing, there was like 15 of us and that was our stand up. And we would align on what we were bringing into the war room is what we called it that Thursday, and everyone was coming prepared because the CEO was there and he would make decisions on the spot about what we could change whether that was pricing product priority messaging to Canada, you know, things that usually take political processes were made. Those decisions were made on the spot so leadership top down, made it really easy for us to actually get all that data in one place.
Andrew Michael 12:03
Very interesting. And I think obviously, it comes into alignment and super important that you have sort of that alignment across the company that this is the number one focus. And we really need to have this information. Yeah, it was interesting that you mentioned sort of war room. And at the time, it definitely must have been sort of turbulent times for you in 2014. Let's close for a little bit now to 2020. And definitely, I think we're in sort of a phase now, where we're in turbulent times and listening and trying to understand your customers now at this point, I think is really difficult. And also with the sort of the bombardment of emails that are flowing out and you still want to stay on top of your business, you still want to be able to serve your customers, but how can you keep in touch with your customers now? How can you keep in touch with what they're saying and how you can support them best through this time now that we experienced with this COVID-19 pandemic?
Lauren Culbertson 12:54
Yeah, so this is something that I've been talking to a lot of our customers about. And just engaging with customer success and Marketing Leaders, because I think both are really impacted through this. The hardest part for me through this just has been understanding the depth of impact. And you know, our customers are all software companies, and they're mostly b2b. And so it's almost like a supply chain of an impact that would happen to one of our customers. So obviously, restaurants are hit extremely hard right now. So restaurant software is obviously going to be struggling. And so we've been talking to a lot of those types of companies about how we can dig in and understand segments of their market that might be doing better than others. Then you have some customers that are in this middle muddy area, and this would be like marketing technology in general. You know, we have some customers that are focused on small businesses and that have been hit hard by others that appear to be thriving. In this time, and so the the most difficult thing for me and I think, as an extension are software companies that we talk to is just understanding exactly how a company is impacted. It's, it's almost impossible to use just logic and common sense because depending on their unique offering, their positioning their customer base, and the segment of the market they're serving, they could be impacted different ways. And so I think to answer your question, like the number one way to get feedback from your customer right now, and this is goes outside of the tool that we built with Loop is just talking to customers one on one, and it seems kind of counterintuitive for transactional business models where you really want to get a mass appeal, but like customers are not only going to not take surveys right now. It also would be perceived as just impersonal really showing them that you care and want to know how they're doing authentically, I think is the best way especially because right now people are looking for personal connection. They're holed up in their houses, they want to get on video calls. And so I think some of the best conversations I've had with our customers have been strategizing through this and talking nothing about our software. So I think just being human seeking to understand is the number one thing to do right now. And then, you know, I have seen success with in app questionnaires like, aside from emailing surveys, you know, there's a lot of tools that will get feedback and product. I think that is also a good way to kind of get feedback making sure you're asking the right questions. Trust radius is an online review site. I thought they did a really good job. They kind of prompted a little survey when people were going to their site that asked if they were spending money on software or if they were on a freeze and Then they publish that data. So I think truly trying to provide value and inform your partners, your customers of what you're hearing is the best meant to make right now.
Andrew Michael 16:10
Yeah, absolutely. I think like you said as well, at this point in time, a lot of people are locked up at home, they want to have that personal touch as well. So there may be a little bit more likely to have a conversation other than they would in the past. I think it's interesting, you mentioned as well, the segments that are being impacted during this time when it comes to sort of their business. And obviously, churn and retention is a natural effect of this in the restaurant example that you gave, if the restaurants are not doing well, the software for those restaurants are going to be not doing well with him. So there'll be losing a lot of customers at this time. This is actually something I was interested in this week was actually looking at sort of the cases, the case numbers and by country to see if maybe there was any correlation when it comes to churn and retention by country at Hot jar where I work because we also introduced an exit survey where we Sort of when people were turning like we added a response for COVID-19 able to see sort of that impact and obviously, like, as you mentioned, predominantly like small business being hit hardest there when it comes to churn. But yeah, that's super interesting. Yeah. And then in terms of sort of, like, quantitative versus qualitative analysis, where do you sit on that? Obviously, like, loop voc being very solid voice of customer? How do you like balance when it comes to making product decisions? When it comes to user behaviour? Is it predominantly qualitative, quantitative, like what's your viewpoint on this?
Lauren Culbertson 17:39
Yeah, so, you know, at loop. Our mission really is to make qualitative feedback quantitative, in a way because our really offering is to go through verbatim responses and really identify the key topics that are coming out of those responses and measure them both in terms of volume and sentiment, so how positive or negative so what you had as a qualitative response to give context becomes an understanding really like a parado chart of your biggest issues. And the sentiment is really an impact score. I think it's that said, people are all of our customers. And you know, I've spent a lot of time creating executive reports for my past companies and also help our current customers with those qualitative is key to helping give the context to understand so really, when you think about going through customer feedback, your mission is to get to the root cause of a problem. There's other use cases like marketers in specific can go through feedback to find the opportunities and what customers are saying really well to improve positioning but for customer success and the core use case of trying to improve churn specifically is really you're trying to get to the root cause. And in order to do that, you need to have quantitative. So you need to be able to say these responses are coming up the most frequently about this topic. But in order to sell the issue internally and ensure everyone understands, you really do need to show examples of the exact verbatim because it brings alive the depth of the problem and makes it almost more human. So if you're looking at a chart that says, you know, pricing is our biggest challenge, because we changed our metric, and people are getting charged a lot more now. You know, an executive looking at that could say, okay, no big deal. Like we knew that was gonna happen, we needed to monetize this way. But if you're able to then show verbatim responses that can show the emotion that can show the intention of people leaving or what they might do that can really bring an issue to life. And then the most important step is actually tying that to impact. And so taking the quantified volume of a problem that's coming up from feedback, but then actually saying, here's the impact that this is having on our sales, our turn our revenue. That's what I found has been the most impactful way to get something changed based on feedback.
Andrew Michael 20:30
For sure, and I think it's one of the things that's often missing, though, as well, when it comes to they often looked in isolation with quantitative and qualitative insights. And I think like bringing that together is going to be a super powerful picture with if that's what you're working with towards oblivia. See, how do you think about that in the context? I think it's always important when we're looking at feedback because I don't think all feedback is equal. And especially when it comes to generating attention, especially when it comes to optimising sort of product changes around feedback. How do you suggest that companies go about making sure they're making the right decisions from the right feedback? And is there anything in terms of segmentation that you look into that you recommend that is built into the product when it comes to this?
Lauren Culbertson 21:13
Yes, I was gonna say before you mentioned it, segmentation is everything. You know, even even for startups, you know, we are segmenting. And every startup does that from the very first day that they're finding product market fit because they're trying to find their ideal customer profile, and that journey continues for the best companies through their whole life. And so, understanding that a change that you make, is going to positively impact the right segment that's struggling with a problem and then doesn't take away from another segment that's not struggling with the problem is key. Because if you make blanket changes, you're really not going to be able to move the business forward. So the ways that we've seen segmentation really work well with feedback analytics have been one, really understanding the type of customer. So your ideal customer profile, however that is you segment them, whether that is the size of the company that you're looking at or the size of the customer that you're looking at. Or if it's the amount of revenue that's brought in, we tend to focus more on transactional based businesses. So we don't do a lot of work with companies that have high touch Customer Success teams. So the hrr segmentation is less of a focus then how engaged the company is. So we have a lot of companies that actually segment feedback by how often a one of their customers is logging in using their products, essentially using usage metrics to your purchase. tying together the quantitative and the qualitative. So they'll use tools like pendo or gainsight, to define what the adoption metrics are that company should achieve. And then they'll segment those companies into how many of those adoption metrics they've actually gotten through. And then when they're looking at feedback, they can focus on the companies that really might not have been engaged use a tool and that strategy for for solving a problem is going to be different than companies that are really engaged have used the tool and are still struggling with big problems. Because, you know, you would have completely different strategies for how you deal with this. The other thing I'd say like, it's interesting when you said some customer feedback is more valuable than others. I think a lot of people often say that about the channel of feedback. So like an online review is less valuable than a support call. And that is something that I really urge Customer Success leaders to reevaluate because especially with online reviews, you know, it's one thing if you're looking at online review on Yelp, those yes can be a little noisy. You don't know if they're authentic. But if you're in software, and you are getting reviews from places like jeetu, crowd trust radius kaptara, every one of those reviews has, what do you like, and what do you not like? And so even your best customers, even if it is the ones that love you the most, they're telling you what they don't like. And so I think it's important to not ignore feedback channels. And to look at it holistically, maybe segment it as a journey map, but um, I do think that it's important to kind of take every channel into consideration.
Andrew Michael 24:51
Absolutely. And you mentioned quite a few things. One thing specifically I want to dive into a little bit more because I think it also really sets with your background and the experiences you have his you mentioned this concept of the ideal customer profile, and who your ideal customer is. And I think when it comes to things like your target market and positioning, this is probably one of the first places where you end up getting churn and retention, if you haven't got a really good understanding of who your ideal customer is and who you're serving, because if you marketing to people that aren't meant to be your customers, and they're coming in, they might not even have the problem that you're advertising they come in, and they're gonna end up churning because they're not going to be getting value. So understanding who your ideal customer profile is probably one of the most critical things you can do for SAAS business, subscription business. And obviously, you have a wealth of experience in this, I think, from your product marketing days. And now I'd love to see. So maybe you want to talk us through your steps in identifying and trying to understand who your ideal customer profile is. I see at Luke voc. you've identified SAS businesses specifically you mentioned earlier thing as well. Predominantly b2b. How did you go about that? So what is your typical process in identifying who your ideal customer profile is? And maybe let us know as well at what stage of the company growth you're at when you're sort of trying to figure this out and how you went about it?
Lauren Culbertson 26:13
Yeah, so this is a great question because it's, it's fresh. In my mind, there is a great resource that was built called nine steps to repeatable, scalable, profitable growth. And it really helped us to define kind of the steps to searching for product market fit and then creating a repeatable and scalable model that you can use to scale the business. So when we were really trying to narrow in our ideal customer profile, we were sitting between four and eight paying customers so we had got a lot of free customers. So we have like a premium offer. We had a lot of success, getting people to talk to us getting people To use the tool, but we were not finding a lot of traction getting them to stick. And so we really made an exercise of saying, Okay, what a lot of people struggle with the problem, we're trying to solve any subscription based business and understand the need to stay on top of what customers are thinking and using that to make change happen, but that the market is there, but the product really is meant for smaller mid market companies that don't have the resources to hire, you know, analysts to help build out some of this stuff. And so, we really took a deep look, we did an exercise where we mapped out the exact for every deal that came in which we had about 200 deals and customers that we talked companies we talked to, we mapped out their target market, so are their market, so Like a sub segment of SAS, what was that? Where were they marketing tag where the operations tag, their user profile. So for us, that was customer marketing, Product Marketing and customer success were the three primary. The their use case, this was the hardest part, and I'll come back to it. And then how they responded to things like pricing, and messaging, just to understand, like, were some of these more price sensitive than others. And when we did that, that was really helpful for us to to realise that we didn't have there are so many different ways that companies could use what we're doing because we have a tool that essentially does, could serve a lot of needs. So because it brings together cross functional leaders across the organisation, depending on who had the deepest needs. It, it really drives the use case. So for example, we had customer marketers that really just wanted to use the tool to understand how people were talking that from about them online, and so that they could change that and drive more strategic messaging based on some of these channels and kind of get a sense of their brand perception. So then they would bring in customer success leaders, but the driving use case was marketing. The majority we found and where we found our our use case was strongest was with customer success. And we found that because they were it was urgent, they wanted to talk to us for multiple times. They were the ones driving the sale forward. But they weren't converting because of a product that we had, which was an integration with Salesforce. So the ability to integrate with all of the customer feedback coming out of Salesforce and what we did was similar to you know how Loop helps people is we quantified all of these deals and how many of them really needed Salesforce to move forward and what we thought the impact could be of them, if they did have a Salesforce integration, other segments that we could be served and we decided to go full onboard with building out that Salesforce integration and kind of bringing along those Customer Success leaders in that ideal customer profile in the process. And it really helped us get to the other side of just, you know, having a few separate use cases to actually being able to say the hardest part was deciding this is the one use case we're going to focus on and others could come to us and say we want to use this as a way to do marketing but as saying, okay, you can use it as is but we are really focused on customer success. That was really the key to us, changing the trajectory.
Andrew Michael 30:58
Interesting, and how You're going about getting this insights. Was it something that you asked me to sign up? Were you surveying customers and users? Were you interviewing? Like, what was your process in getting this quantitative data, this data together to make the decision?
Lauren Culbertson 31:14
Yeah, so we actually used loop, of course. So we, essentially all of this data was in our CRM. So a lot of the times it was through emails attached to the deal, or it was from notes that a sales rep would leave, or it was we do, we do have a survey after someone completes our trial, which we'd get feedback that way. And so all of that we connected into loop which essentially using the natural image processing bucketed, the key issues coming out of the feedback. And then it was really easy for us to say to tie that then back to direct opportunities because again, creating I think that's another way you can use a segment is this is impacting new sales. And that's how we kind of drove it forward
Andrew Michael 32:06
very cool I love the process and I love the dogfooding as well of lip voc using your own tools to sort of do the research and be able to how is the decision process then when you there's you got the data back and I think this is like one of those stumbling points a lot of startups making talked about on the show before Is it okay you have this information now but often you might feel it's a risk making a decision. Similarly a blackboard when you said okay, like, we just needed to make a decision now like, what what how'd you feel was it for you to make this decision to say okay, let's double down let's focus on SAS companies. VDP. Like Customer Success being the main use case, was an easy decision to make or whether debates internally at the company.
Lauren Culbertson 32:47
So I remember this so clearly, it because it actually was one of the longest decisions and in a startup world, that's like a week and a half. But it was So my sales leader actually brought it up to me. I really don't think we've nailed our ICP and our ideal customer profile. And I was like, What? Like, what are you talking about? We're already so narrow. We're focused only on b2b SaaS companies between 50 and 1000 employees. What do you mean, we haven't nailed RSVP. So first, it was kind of like denial. Because I already felt like we were really focused. But then it was like, okay, like, obviously, I trust this partner. And he's really smart. So I'm going to dig into this a little more. And it took, honestly, it took until we found a really good framework, which is I mentioned, I'll send you the link to this. This presentation. It's really good
Andrew Michael 33:44
that we'll leave it in the show notes as well.
Lauren Culbertson 33:47
Yeah, for sure. And we could all get on the same page about the questions we should be able to answer and realising the questions we couldn't answer. So there's this one slide and it's it's the title of it's called Pathfinder and Trail Blazers, salespeople. And this is really important for the the early salespeople of any startup is that they are not like ordinary salespeople that follow a playbook. They're actually writing the playbook. And there's a few questions that they can ask to know if how close you are to finding product market fit. And one of the first one is which target market and use case second, who in the organisation to sell to messaging pricing, sales motion, and key missing product features being the last. And so what we did is we did a red, yellow, green exercise me my sales and head of marketing on all each of those questions. And doing that made me realise that I wouldn't give any one of them a green. They were giving them mostly reds and yellows. And so it helped us understand the questions that we still needed to answer. And for us, that was the use case. And so this was all like, surfer did day one when he brought it up. It was like denial and then day two was like oh, Okay, let's get a framework here to get on the same page. And then going into the next week, that's when we really did a tonne of data analysis, we've got to get got all of our deals, did the loop process of actually scanning all of that feedback and identifying the major topics. And then we looked at the data together, and we kind of that's where we had to make decisions about, okay, what do we think the How hard is it to serve the customer success leader, and how much value could we get on them? And that kind of cost benefit analysis made it easy, I love data, but you know, start an analytics company. So for me, if I am confident in the data, the decision is easy. And so the hardest part was just getting the data. Once we have the data, the decision was easy. It was a simple, economical exercise.
Andrew Michael 35:48
Nice to use a framework that could get everyone aligned behind and sit down. I like the scoring as well like the red, yellow green. It's almost like a good reflection moment. When you realise that you're not giving anyone the green light. So,
Lauren Culbertson 36:02
Andrew Michael 36:04
You mentioned earlier as well, and that the ICP is sort of in some of the best companies, they're constantly evolving and constantly learning as well. It's funny as well, because actually at Hot char, I was responsible for helping define the initial ICP, like the ideal customer profile. And just yesterday, having a chat with the CEO of the slack is like, I think it's time we start to take a look at this again, and it was definitely obviously 100% agree with him. It's something that's constantly evolving. How do you advise companies to be thinking about this evolution of the ideal customer profile? How are you potentially thinking about it as well? At loop?
Lauren Culbertson 36:40
Yeah, I think a lot of the companies that we work with are kind of in the hot jar stage of, you know, entering into this next level of growth. And it's like, they've found great success with an original ideal customer profile, and now they have to decide if they can expand that into something new with the risk of abandoning the old or how far they can go to continue to add value to their existing and monetize their existing. I think for a lot of companies, regardless of where you are, there's processes that you can use to evaluate kind of like the red, yellow, green evaluate if you're still serving a major market need for more established companies to I think the competitive analysis is important understanding the options that your ideal customer profile has, like for a company like hot jar, when they were first starting out, they were really like on the forefront of creating a category. And so focusing on their ideal customer profile probably allowed them to go really fast and deep in that category. I mean, you can tell me if I'm totally wrong here, but uh, but then now there's more players in the space and so it's good. They tried to stay out to their ideal customer profile, or do they find a new persona, a new segment of the market? It's reallyall about how you're going to expand your Tam right? So there's a lot you can be proactive in that way. But then, you know, my experience at Blackbaud being a 30, I guess now, like, almost 40 year old software company, you're constantly trying to reevaluate how you can go after New segments of the market and create value that aligns with your core competencies. So it I think it depends on if you want to lead with the market or lead with the product. Like with Blackbaud as an example, their core was a CRM, they focused on nonprofits that could be easily expanded to relationship management for a school and you call it student management just as an example. Or you could say, I want to go deeper into the school market and I think that my company has the core competencies to build out and admissions management software or something totally different? So I think, depending on if your product first or market first company kind of guides that decision, I'm curious your thoughts like having built the ICP for hot jar, like where you feel like the next step or evaluation process ago?
Andrew Michael 39:20
Yeah, I think it was actually fortunate that you mentioned sort of the Hotjar being important in total addressable market. I think we're fortunate that the Hotjar is really, really big. So we're actually doing the inverse. And we're really trying to focus and double down on the niche. So we can add more value, like you mentioned, obviously, a lot of players in the market, you really want to be able to sort of stand out and although we definitely market leaders, by a long way, it's really important for us to be able to offer like what nobody else does and really have that exception offering for our customers. So worrying who the ideal customer you're building for really allows you to do special things with the product because you can't be everything for everyone, you end up being nothing. There's also a really interesting case out Like you mentioned now in terms of like repositioning the product just to a different markets, I think price intelligently was profitable. Now, they had a good interview with the CEO of Freshdesk. And I think it's a billion dollar company now, but $100 billion company now. And they went about this exact same strategy that you mentioned. So they had software that they were building called Freshdesk, which was a support software, they realised that if they had to just repackage the software, the exact same thing, add a couple of features, that could be an internal ticketing system for it. And they went out and then sold to the same same company, but with two different teams within the company and ended up expanding that way. So there's obviously a lot of different ways you can view sort of your ideal customer profile and the way you can reposition and find new opportunities, but keeping it focused to your current core product offering all your current markets, for example.
Cool. So I see we're running up on time. Now it's been really really good chatting, learn, I have one final question that ask everybody that joins the show. Let's imagine a hypothetical scenario now that you join a new company. And this company is struggling with churn and retention. And the CEO comes to you and ask to help turn things around. They give you 90 days and they said, What can you come up with a 90 days to try and turn things around and maybe make a dent or now turn your attention? What would be some of the things you'd want to be doing those first 90 days to get some results?
Lauren Culbertson 41:31
So step one, I would do an analysis of the whole customer base by understanding across the customer journey, the feedback that's coming in from customers who are leaving from customers who aren't leaving, and then identify the key segments between the two that make the difference. So kind of mapping out the ideal customer profile for people that are engaged and staying, then I would really drink Drill in and understand if there's people in our ideal customer profile that aren't staying, what are the key problems that they are facing that are causing them to leave and do a root cause analysis? I would do that by listening and collecting all of the feedback where they're giving insights directly. So any support tickets, online reviews, sales calls, any notes that can show the problems that they're facing, then I would do a survey to get more details on the feedback problems that they're already having. I would then quantify what major problems are coming up, I would get a cross functional team together to review those problems. I would assign ownership to big problems so everyone felt engaged, and then set up cadences to meet on a regular basis weekly. To kind of solve the major challenges that we identify together, so that'd be kind of my my playbook.
Andrew Michael 43:08
Sounds like the playbook is something that you've gone through recently. How are you finding the cross functional team working? Is this something like that you focus on now at loop? And like, how have you gone about this with the team?
Lauren Culbertson 43:25
Yeah, for sure. I mean, I mentioned before, how important it is to have bigger ship involved. So I think like, in your example, that question, I love that you add, like, you position it as saying, like the leader says, this is your big problem for when I'm working with companies, and there's even really big companies that are still trying to figure this out. I mean, you know, better than anyone that that's true, the big challenge is feeling heard and respected by their partners because they can't do it alone. So you know, working with product managers, or product marketers that say, Well, if I get if I show them this customer feedback, like they might not listen to me I can't tell them what to do. And it's like really changing the culture to say everyone's accountable for this. It's not just customer success that owns the customer. Everyone has to be accountable for this to work. So again, I know it's you want ways for things to work without the top person in charge to say this is important. But I find it's so much harder if you don't have that.
Andrew Michael 44:23
It's impossible. I think this is a question that comes up a lot, as well as like, who should own retention within a company. Like, it's definitely my belief that if it's not one specific team that needs to own it, because it's an output metric, it's influenced by so many different inputs, if anybody needs certain needs to be the CEO needs to be the CEO, making sure that this is important that there's alignment across the company that you sort of like so you have this cross functional effort to tackle the problem because there's so many different influences to it in so many different ways like Product Marketing, as you mentioned, speaking to customers getting these insights like you need that to transfer the information to products that can make changes Customer Success needs to be getting customers to adopt the problem sales needs to be making sure they're closing the right deals. There's just so many different influences that impacted that. It can't be one specific team and it needs to come like you say from leadership from a CEO. The end of the day, if you don't have if you're not retaining customers, you're not a subscription business. You're just sort of looking back at this waiting to go to business. I
Lauren Culbertson 45:20
couldn't agree more. Yeah, it's really it's and rewarding people that work across the lines, right? And it's not just like, oh, you get a badge or a thumbs up for helping someone out. That's not in your department. It's like that should be an expected part of your job. And I think that has to come from the top to.
Andrew Michael 45:37
Absolutely. Well, it's been a pleasure having you on the show today is any last thing you want to leave the audience with? How can they keep up to date with what you're working on? Anything you'd like to share with us?
Lauren Culbertson 45:48
Yeah, you know, we're, we're working with a lot of software companies through this that are really looking for a more affordable way to stay in touch with their customers. You know, Especially for companies that have been hit hardest from this, we're helping them out at no charge. Just really we want to learn how we can create processes together that that help you to stay in touch with how customers are adapting to this major economic event. So if if that is something that you'd like to explore, I would encourage you to go to our website, the OSI Comm. And we can have a chat. Awesome.
Andrew Michael 46:27
Well, thanks so much for joining today. And I wish you best of luck now as well for yourself during this economic downtime. And hopefully you can stay close to your customer and come out strong the other side.
Lauren Culbertson 46:38
Yep, same to you Andrew. Great chatting with you.
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We’ll send you one episode every Wednesday from a subscription economy pro with insights to help you grow.
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.