Qualitative churn analysis
Spencer Dent & Andrew Peterson
Spencer Dent & Andrew Peterson
Today on the show we have Andrew Peterson and Spencer Dent, Founders of Clozd.
In this episode, they shared how they came up with the idea to build Clozd, and how they help their clients uncover the qualitative pieces of the puzzle they need to really understand all the nuances that went into their customer’s decision to churn.
We then dove into why you should interview the decision-makers of companies that have churned, the benefits of recruiting a third party to conduct the interviews, and they also shared some of the key questions you should be asking in order to get the most out of the calls.
[00:01:28] Andrew Michael: Hey, Andrew hey Spencer welcome to the show,
[00:01:31] Spencer Dent: Andrew.
[00:01:33] Andrew Michael: It's good to have you for the listeners. Andrew and Spencer are the founders of Clozd a leading provider of technology services for win-loss analysis. Prior to close Spencer was the head of demand generation and marketing operations at Qualtrics.
And Andrew was a product founder and general manager Qualtrics to, so my first question for you too, is at what point did you decide you want to start a company together? And how did that evolve
[00:01:57] Spencer Dent: question? You want to take it? I'll [00:02:00] take it. I'll take. We worked at a feedback company, right? So it was Qualtrics is a great company, learned a ton there.
And, for folks listening to this understanding, measuring customer house type metrics, we were learning a lot there. And, but in our roles, we realized like the most important feedback we needed was understanding why we were winning and losing sales opportunities, because that was the. It hindrance or obstacle to us, continue to grow the business.
And in the process of doing that we went and looked and tried to understand we were working with both the new business team, as well as the customer success team to figure out. When somebody does churn, what happens and why do they leave? And when on the new business front, why are we winning and losing deals to certain competitors?
So we got pretty obsessed with this concept of there needs to be a platform that helps companies diagnose after the decision is made, not predict whether or not someone's going to win or lose, but after somebody [00:03:00] churns or after a deal is won or lost upfront, why did that happen? And so we we left.
Five years, it'll be five years ago next month. And started this business. We bootstrapped it for several years and really immediately we started winning customers and spin. It has been a great experience, but the big thing is we've realized the biggest, most valuable source of feedback for B2B companies is to actually understand why companies are making decisions to spend or not spend money with you.
And what's driving those underlying decisions.
[00:03:35] Andrew Michael: Very cool. So you gave me the story of the, why you decided to build what you're doing, but let me know a little bit the details, like when you got started, like he went to her and said, Hey, we should start a company together. Yeah.
[00:03:46] Andrew Peterson: Yeah. It's a fun story. We were really fortunate to work an incredibly successful hypergrowth.
SAS company and learned a ton of lessons there. I was there for just about eight years. Spencer [00:04:00] came over from Bain and company in what, 2013, and was there for about four years. So an incredible experience. And, we got to see from the inside out how an incredible company got built and, learn from observing Qualtrics, how they went about growing the company.
And I think both of us were always entrepreneurial. Spencer had started a business while he was an undergrad at Brigham young university. I'd always had a bunch of business ideas that I toyed around with, at home late at night. Vetting different business plans with different colleagues through the years, but none of them ever felt like the right one felt as we did more due diligence, like this is a, this is the right one for our skills.
The right timing, the right opportunity, so I always wanted to leave and be an entrepreneur, but was that such a great company that with so much opportunity that, ended up sticking it out for eight years and learning a lot in the process. So eventually, we stumbled across the idea for closed because it was a business problem we were facing at Qualtrics and we couldn't really find a great solution.
And [00:05:00] it was quite adjacent to the work we were involved in doing act Qualtrics. And so it just felt like the culmination of this is the right idea. At the right time and we've got the right skillset for this. So it was really exciting when that moment arrived. And even though there was a big opportunity cost for leaving Qualtrics, Qualtrics was pre IPO.
It was just a year or two before they ended up getting acquired by SAP for $8 billion. We left meaningful roles there to be in Spencer's basement, tripping over his daughter's toys. As we walked through the family room to get to our little room in the basement, but it was a super exciting time and a ton of fun.
To venture out and start our own business.
[00:05:38] Andrew Michael: Yeah. It's a real deal. And like you said, there's that big opportunity costs or resonates a lot for that myself as well. Like I left a Hotjar about a year before they were acquired and one one end as well. And the other side is what you mentioned. I think what I thought back then there was like the enemy and there's this quite that stuck with me, that the enemy of a great life.
And when you [00:06:00] have a good life, it's so easy to break. So difficult to break out of that, into, to take a risk and say, fuck it. I'm going to do it. But when you do it, it's
[00:06:06] Andrew Peterson: Yeah. We actually had one a third colleague at Qualtrics that was integrally involved in like developing the business idea for closed.
And the opportunity cost was just too high. Like he, when it came down to it to make the decision to leave, he decided to stay and he's had a great career there. He's had a ton of success, made great money, all of that. And I think that, for him, it was the right decision to stay. But you're exactly right.
Like it's a big decision at that moment. It can be real scary
[00:06:34] Spencer Dent: psychologically. I think people tend to over wait risks and worst case scenarios and under what. Way upside and best case scenarios and realize that, if you have a good idea and you're smart and you work hard, you'll be fine.
[00:06:48] Andrew Michael: But if you try to apply logic to that, you never going to make sense. I think because if you start adding up all the risks and stuff, like you'd be crazy to get started with the business to begin with looking at the chances and stuff. But [00:07:00] so you deal then with obviously a lot of Clients now handling churn and retention, like trying to understand for them how the reasons for it and that you mentioned before the show you a deal to deal with a lot of enterprise clients as well.
What are some of the things you're seeing in the market when it comes to generate attention and the way that these companies are approaching the challenge?
[00:07:20] Spencer Dent: Yeah. So I can take that. Given my background in consulting, I've been the lead of how do we actually deliver our programs for our clients.
We work with our clients to help them understand once a decision's been made to, to purchase decision within their existing customer base, either upsell stay or leave, why the company did that. And I think, some of the stuff that we're seeing, that's interesting. Is a, there's no silver bullet for any company, right?
It's never oh, if we fixed this one feature, if we had this one feature, we would've kept them. It tends to be people, especially once they've made a choice to go with a [00:08:00] company it's actually painful for them to score. And so it tends to be of multiple factors. So there's an issue with the product and then they can't get it resolved with the support team.
And then somebody is unresponsive on the sales team. And those things start to just add up to the point where there's issues, but there could also be other things that happen that are completely outside of your control as a company. For example, my new boss use your big G your biggest competitor at their old job.
That has a great relationship with a bunch of people there. And they've already told them that they're going to give us a huge discount if. And so that has nothing to do with how well you've executed, what value you've generated. That's a decision that's completely going to hit you blindsided.
I think what we see is companies over index on thinking that a everything's in their control B it's only a handful of things. And then see, they think that their internal systems will fully predict. Why they are, or aren't [00:09:00] turning and they use things like an NPS score and B B2B to figure out if that's going to predict churn whether or not somebody turns, but they don't understand that.
Depending upon how they're administered and mentorees and administering that survey or who they're sending it to those people may have no impact on the.
[00:09:16] Andrew Peterson: Yeah. So I think to zoom out a little bit we've just observed a broader trend amongst the enterprise software and SAS companies that we work closely with that they've got some really interesting tools that they use internally to track what's happening with their customers usage behavior.
NPS things like that to, to understand the customer journey and customer health and to predict churn. There's just been a gap for some of these competencies that we work with. Once churn happens. Why did it happen? Like really do our metrics, tell the full story? Probably not. And so there's a qualitative piece of the puzzle that our customers are eager to uncover and really understand all the nuances that went into [00:10:00] the decision that their client made to churn.
And trying to add that piece on to, in addition to everything we've been tracking all this time. The scoring that we've done, the customer ended up leaving, in some cases we'd see a Qualtrics, one of their primary solutions that they offer is, NPS measurement.
And what if you got a, what if you got a promoter, a customer that's been giving you consistent nines and tens, when you ask them what, how likely they are to recommend you. And then they churn, what's the story behind that. There's gotta be more. More to know. And we've been fortunate to be in a position with the kind of services we offer to help companies go out and capture that qualitative side of the equation and answer more of the actual decision-making process that they went through to arrive at the decision to churn.
[00:10:48] Andrew Michael: Yeah, this is actually something we, we chatted about a few different episodes on the podcasts we've spoken out with. Emeric from Agora Pulse more recently as well from, with Joe, from Maze. In the sense that [00:11:00] there's many different reasons, like sometimes the data alone can't give you the answers that you're looking for.
And also off the back of that, like a lot of times when we see generate attention, when we just look at data alone and we say, okay the number is X percent. We wanted to reduce it by 5%. Not having clarity on what the actual reason is for churning. Like you don't really know what you can influence at the end of the day, because sometimes you might be getting a nine on that NPS, but they went out of business and that's why they churned.
That's not something that your tool or service is going to fix ultimately, but we're trying to improve that metric without understanding these reasons. So how are you doing it? Yeah.
[00:11:34] Spencer Dent: Yeah. So there's an interesting thing here. It's it will seem like a small nuance, but it's actually incredibly important to understand a lot of the measurement like customer experience type measurement originated in B2C businesses, right?
Like I used to work at Bain and we would go do and NPS projects for companies where we would go survey, for example, a telecom customers, to understand what the NPS score was. Here's why this is [00:12:00] important is in B to C businesses, the person giving you the score is also the person who has the decision rights about the wallet and the money that gets spent.
There's a disconnect in a lot of B2B, and it's not always clear of the person giving you the score. May not have any rights to, or influence on the decision or it may be not well clearly defined why or how decisions are made in the company. That's why it's dangerous to try to approach proven B2C methodologies for tracking churn into B2B, because the way decisions get made.
They're more complex and more difficult. So how do to answer your question? How do we do it? How do we help companies understand this is we go out on their behalf and through typically on bigger, more sophisticated deals, an interview mechanism. We'll go interview the decision. Okay. And understand why they did what they did.
If it's a more transactional deal, we can help survey those buyers to understand why they did what they did. [00:13:00] But the key is to under is to make sure you go to the buyer and don't sit internally inside the, the walls of your own, whether you're working remotely or own office and try to guess why they did what they
[00:13:11] Andrew Peterson: did.
Yeah. So we're seeing this trend of, executives, Business decision makers, customer success leaders saying, Hey, I think there's a gap. I think there's more for us to uncover around why these customers are churning. So let's establish a discipline process. We're on an ongoing basis.
Customers do churn. We're reaching out to all of them or depending on the volume, maybe a subset of them to actually invite them directly, to give us feedback and weigh in on why they made the decision that they made. And the ideal mechanism as Spencer said to do that is an interview. If you could interview.
Every single customer, that churns, that would be ideal. But in some cases that may not be feasible or cost effective. And so you can also use a survey instrument in certain [00:14:00] cases, and we could dive more into, some methodology questions about how to approach that. But overall companies are looking to develop this ongoing continuous process.
Collecting qualitative feedback to inform them about why these churn decisions are being made, who's involved in making those turn decisions. What are the factors that led to churn? What was the nature and quality of the ongoing relationship with that customer? Was their decision based on internal factors at their business, or was it based on their experience with the product?
Capabilities of the product or whatever else, pricing concerns and considerations. So by having an in-depth conversation with that buyer, you have the opportunity to really dive into a wide array of topics and influential factors. Because as Spencer said, it's usually not just one thing. It's not a silver bullet.
It's usually a culmination of factors over the course of the relationship with that customer that led to their decision to leave. And it takes usually [00:15:00] an inner. Interaction to really cover that broad spectrum and understand fully what happened.
[00:15:07] Andrew Michael: Yeah. And so just understand correctly then you're are you doing these interviews on behalf of your clients?
So a client would come to you and say, okay, we want to use your service and you would then go and set up these interviews on their behalf with the.
[00:15:20] Spencer Dent: Yeah, Mo most often companies lab let's do that. The key here is we have a technology platform that allows companies. If they so chose to, they could do the interviews themselves.
There is value in having a third-party. It's the analogy I give people is it's if you break up with your girlfriend and in middle school, you send your friend to go talk and figure. What happened? It's kinda awkward for you to go address it cause they may not want to be fully truthful with you.
So there's real value in having a third party that they can feel comfortable having a professional, but very transparent conversation with, but you can sometimes accomplish this internally. Ultimately a good way to think about it. [00:16:00] Andrew is it depends on the nature of your business and your pipeline, right?
If. If I had a SAS business, that was a very simple app, and it's a simple monthly subscription. It's 99 bucks a month. And like the decision to use me or not use me is also really simple. It might be overkill to go interview some of those people. In fact, it's like awkward, but if I have a more enterprise level solution, That has multiple users within an account.
And, it's $10,000 plus in an ARR that I'm spending type of thing. At that point, it starts to make a little more sense to let's go engage these people and see what happens. So you choose the tool or the engagement method based off of the nature of your business. And right-size how you approach it based on.
What the deal looks like and how involved the company is with you
[00:16:49] Andrew Michael: and what will make the most sense. So then let's go into this a little bit deeper. So a client comes to you. They want to analyze why customers are turning you. Go ahead, you [00:17:00] set up some interviews. What does a typical interview look like with the clients?
What are some of the key questions you want to be asking during those interviews to show that you're getting? Cause what you're saying, as well as like these interactions, maybe it happened over the course of a series of months. People aren't very good at remembering specific actions. What are some of the tips that you'd have for people wanting to bring out those key actions and points during the interviews?
[00:17:22] Spencer Dent: Yeah. Good question. I have tons of thoughts on this. Let's bulge. We can tag them just one rule. Number one, if you make it a rigid survey, like I'm going to ask this question, then I'm going to add this, ask this question and I'm going to ask this question. You're wasting your time and you're wasting their time.
What you're trying to do is understand why they did what. So you, you may have, there's certain things that may influence this, so it could be pricing, it could be product gaps, it could be a support experience. It could be implementation. It could be a handful of things. So you may want to, you want to put the thought in upfront to think about what those things might be in the types of questions you want to ask, but it's.[00:18:00]
You cannot script the thing. And if you do try to script the thing, two things will happen. One, you won't dig right in the right areas to understand what happened. And two you'll end up having a hole. If you try to aggregate this across different customers that you talk to, you'll have, a very rigid set of answers, but not something that truly uncovers what happened.
So rule number one, your whole goal of that conversation. Why did you do what you did and just and I'm going to do the whole, tell me more about this. Tell me more about this. Why was that important? What exactly didn't work. If somebody tells you, for example, the product couldn't meet our use case.
Okay. Tell me more about your use case. Tell me more about the challenges you ran into and trying to meet your use case. What would you do differently if you were designing the product? Those types of questions will get you to an answer as a company that can help you go solve it and keep that customer in the future.
[00:18:58] Andrew Michael: I said, tell me a little [00:19:00] bit more about this and tell me what else are you asking?
[00:19:02] Spencer Dent: Why?
[00:19:02] Andrew Peterson: Yeah. Yeah. Spencer's got a whole repertoire of great questions. He's done a lot of this interview work on behalf of our clients. So maybe you can be conjuring up some more great questions that people could incorporate into their interviews, but as you conduct the interviews, it's equally as important.
In addition to conducting a great interview, that's adaptive as Spencer has described. You also need to have a mechanism or an approach for aggregating the feedback across all the interviews that you're doing. And so you need it, you need to lead these adaptive probing interviews, but then step back after the fact, ideally record and transcribe these conversations so that you've got a great record of it.
And go back through, come back through and tag from interview to interview you like here are the major factors that influenced this buyer's decision and create a framework of those or a scheme of decision drivers that then you were tabulating across all the interviews that have been conducted. So that in addition to.
To tell me a convincing, compelling story about a [00:20:00] single deal. You can also step back and see big picture. Here's some common themes and trends like yeah. One customer complained a lot about XYZ feature, but we don't hear that a lot. And it's not something that's worth our product organizations time to go to.
But we do hear consistently that there's frustration about our pricing model and how our pricing model scales for small business customers. It's coming up routinely. Like this is something that we need to address if we want to retain our SMB customers. So that's, long-term the goal that you've got to keep in mind is we've got to have a way to track themes and trends and decision drivers across all of the deals that we're analyzing.
[00:20:41] Spencer Dent: Yeah, I bet. I bet there's people that are listening to this that have been like tasks in the past. Hey, go talk to those customers and figuring out why they left. And they go in and they bust open like a Google sheet or a word doc or whatever, and they're taking notes about why, but then they get done with it.
And it's what do I go do now? How do I get this into the hands of the right people? And that's Andrew's [00:21:00] point is if you ever found yourself in that situation, that actually is as much a methodology problem. How are you actually going about upfront to conduct it as it is about a, how do you synthesize and share problems?
So you want to keep those things in mind as you approach it. You want to have a really sound methodology. That's flexible, so you can have flexible conversations, but also have a way of pulling it all together and sharing it out. Because again, this doesn't do anybody any good in your organization.
If it just sits on somebody's.
[00:21:29] Andrew Michael: Yeah, and I think that's a challenge as well. When you don't go like a fixed structured interview questions, it's a lot more difficult to run the synthesis analysis and understand and spot patterns. And. I think what I like about what your service offers is having external third parties, you end up removing a little bit of the bias.
So it's not like a product manager or marketer who's has like their own perceptions and understanding of how the product works and can say, oh, I heard that. And they're over here. That's and then that ends up coming up more in the reports than it should. What does your
[00:21:59] Spencer Dent: process look [00:22:00] like? I know that's a good point.
Like not to interject, but I'm getting interjected one reason to do that. One re one benefit of a third party. Is it prevents people internally from weaponizing and feedback. And most people have probably seen this, right? The sales team goes to the product team and says, this is the fifth time that this is a problem because we don't have this functionality.
We're not going to hit our quota because of you guys, you suck. And vice versa. The product's great. I was on the demo of the product. They said they could do everything we needed. Your sales guys blew it. And, or, it's the reason this happens is because the CS team didn't follow up and pay attention.
Not because the product couldn't do what they needed, et cetera, et cetera. An independent, third-party just there to represent the customer can be helpful, but you can, sometimes you can accomplish that internally and you just have to have the right kind of culture and the right representative that has the trust of the different departments within your company.
[00:22:54] Andrew Michael: I want to ask a question that all we're talking a little bit about an exit survey, speaking to customers that ended up quitting. [00:23:00] One of the things I found fascinating and I actually learned from David dominance at hot shower was in his CR odd days. He was working in conversion rate experts. One of the things.
They used to realize that one of the biggest mistakes that people tend to make, when you try to understand why people don't convert on your website is people typically would put up like a poll and said like, why didn't you buy today or whatever it is. And then people would get responses, but. They have this bad, this analogy as well.
And I'm going to butcher it now. It's of the star wars theme where they had, you have the two backers. I didn't even know what the characters, the jetties I hope the listeners don't hate me for this, but I haven't watched much of wars, but essentially there's three buckets of users and there's The stormtroopers are the users who are going to come to your site.
They will always going to be buyers, no matter what they're going to click by. And the women just get on with their business. Then you had the two backers who are the ones who are never going to be customers. They may be just clicked on an ad by mistake that are at your site and there were bad fits.
And then you. The third type is losing an hour sec. They're the [00:24:00] in-betweeners. And by collecting feedback from all these three groups of users on your website, what you're actually doing is you're getting mixed messages, because you're getting a bunch of feedback from people who weren't qualified, who weren't meant to be your customers to begin with.
And then you can't really tell who is the one that's doing. So when they recommended was like, You instead of asking on the site, you ask immediately, post-sale the question of what nearly stopped you from converting today? And that way you ensuring that you are only getting from feedback from customers that converted, you're going to get like the ones who are just going to go through anyway.
And not much thing that you're going to get the guys in the middle who had a little bit uncertain, give you good feedback. And I think. My thoughts on this is the same can be approached to when it comes to churn analysis, because we spend so much time focusing on these exit interviews running surveys and so forth.
But I don't think we spend enough time actually speaking to customers that renew and asking them that simple question is like, what nearly stopped you from noon today? Because I think the feedback you can get obviously is from someone who's managed to stick around, but they must have a lot of frustration.
What are your thoughts on this? Is [00:25:00] this something that you see with your clients?
[00:25:02] Spencer Dent: Yeah. So we should hit this into talk about upsell and the benefit of Windsor. We see this all the time, right? Like you only go to Nate. If you only go talk about the negatives. You might actually over-index right. Cause sometimes something that one customer preserves as a negative thing oh, your pricing model, another customer, I'd say it's perfect for me.
And so you actually do want balanced feedback and we often see this for our clients the way most of them use us as they use us upfront. The first time I sign up, why did I choose you or not choose you? So a win or a loss upfront, but also down the road, an upsell or a. So just to understand that journey at the decision points, why are they doing what they're doing?
And so 100%, you want to understand the wins, because if you understand the wins, it actually helps you better understand the losses. That's true. But another thing that you mentioned in that analogy that I think is important to touch on is context of who the person is right upfront. It's harder to [00:26:00] have that context when it's a brand new buyer and they're coming in, they're hitting my website and they do, or don't convert.
You should have all the contexts in the world about customers that are choosing to churn or not sure. And you have all of that metadata sitting in your systems, whether about their usage, about the account that they come from, all of those things. And one of the things that we found is as you're trying to interpret win-loss feedback, upsell feedback, churn feedback, the immediate question you will get is what does this look like?
With product X or what does this look like in segment Y or whatever it happens to be, and having the metadata around those decisions and understanding the metadata is huge because sometimes it's actually really funny. Like we had. We had a client come to us and they were helping, they wanted us to understand why they continue to lose customers to a certain competitor.
Why are we losing customers to this competitor? Why are we losing customers to this competitor? And they were only [00:27:00] looking at that at the churns. And then you actually went and said are you actually seeing when you're winning customers from that competitor? And when you actually balance the coin, you said.
Oh, it's actually really, they're just both you, you're saying you're losing them based off of price, but you're also pulling their customers away from, to you based off of price. So this is just a discount game that you guys are in with each other. Where, when someone comes up, you just offer them a sweet deal to, to flip them.
And so you're doing the same thing to each other. Yeah. Very helpful to understand all sides of the coin. So you really truly understand.
[00:27:36] Andrew Michael: Yeah. I think on to around pricing, like if you don't have at least like five to 10% of people complaining about pricing, it means your pricing is too cheap. So it's just the nature of doing business in the space as well.
You're always going to have this. But yeah, I think what I was alluding to as well was more that. I'm asking like what nearly stopped somebody who's just rebought the products. Because I think in that sense, then it's not okay, why did you upgrade today? It's more about what nearly [00:28:00] stopped you from upgrading to what nearly stopped you from noon today.
So you're getting insights ahead of time from people that have actually gone through and continue to be a customer, irrespective of a thing. The feedback I think you get from that is like a. I've just gone ahead and spent this contract. So I'm going to give you all the feedback non, and instead of you, what you need to be fixing immediately.
So I think it's a great opportunity that we miss out on that because we spend so much time focusing on that upsell. Then I can, now we've got this clients, but it's probably the best opportunity for a really
[00:28:28] Spencer Dent: powerful yeah. How do we grease it so that you just upsell even more simply and faster?
[00:28:33] Andrew Michael: Yeah.
[00:28:34] Andrew Peterson: And that's along these lines just real quick.
There's been an interesting strategy. But some of our clients have employed were using whatever mechanism or algorithm that they have for predicting churn. They actually preempt the churn and have us contact those customers to interview them about their experience as a customer, not disclosing to the customer that Hey, you're at risk and they're worried about your account, but more.
Hey, we're a neutral third party that's been hired just [00:29:00] to better understand your experience as a customer of X corporation. And really the purpose of that strategy is get in there and really dig into what's the status of that relationship. What is the, their experience? And is there anything that customer can do proactively to save that account from churning?
So that's, it's a few of our clients have taken that approach and there's a really strong ROI to that because Hey, the customer appreciates this outreach and this interest of the customer, the company has in better understanding their situation. It gives them the opportunity potentially to vent about issues.
And then it gives the company an opportunity to. Step in and address some of those issues that they may be able to resolve. And it helps them during out directly impact their attention.
[00:29:46] Andrew Michael: I like that. Cause you give, build a bridge as well, to give the freedom, to give more direct feedback as well, to a third party, and then the opportunity to save it on the other end.
I see we're running up on time, so I want to make sure I save time for two questions. [00:30:00] Ask every guest guests in plural. This it's not normal, but Let's imagine a hypothetical scenario that you to join a new company. Churn and retention is not doing great at this company, or this year comes to you and says, we need to turn things around fast.
We have 90 days to do it. You're in charge. The trick is you're not going to tell me you're going to go do exit surveys, so speak to customers, understand why they churn. You're not going to, you don't have the freedom and luxury of data. You're just going to pick a tactic that you've seen be effective.
Other the company you've previously worked at, or company that you've worked with to reduce churn fast and run with that playbook blindly.
[00:30:36] Andrew Peterson: Spencer's a former management consultant. He was at the Bains, Salesforce effectiveness practice did a lot of go to market consulting style, a lot of super interesting companies. So he's got an incredible insight here for all the listeners today.
[00:30:50] Spencer Dent: what, what, What would they do first time? I would say this, I would say this.
Root cause most often our [00:31:00] challenges with the product or service actually delivering right. You can try to go address things through cus like support. Oh, we have problems with support. Nobody likes to call support. Do you know? There's never been a person that woke up in the morning and said, I can't wait to call whatever company support line.
They only call support because something's not working. So if I was in charge of turning a company and I had to blindly go after it, I would just go and look up. What are the consistent challenges that we're running into from a product standpoint and do everything we could to fix those and get quick wins out of it, because that ultimately will cascade all the way through years ago, I was working on a project.
The client was just freaking out about their support turnaround times and the, first call resolution. They had all the metrics under the sun. So it the opposite of this situation. And they were trying to figure out how they could improve their net promoter score so that they could overtake one of their [00:32:00] competitors and the great grand joke.
And the whole thing was like your competitors have a stronger product. Yeah, so it's not like the reason you have longer turnaround times. The reason you have less first call resolution is because your product has problems. So you can do whatever you want to, the price, you can do whatever you want to the support thing.
It's not going to change the fact that what people are buying is not working for them. That's the, still the closest thing to a silver bullet is are you delivering on your brand promise? I'd always go there first.
[00:32:33] Andrew Michael: I think it's a bit of a, yeah, it's a bit of a tough one is all because 90 days is not much time to make a big impact and stuff like that.
But I think in the sense, like the end result that people come to, to solve a problem with your products, not solving that problem.
[00:32:46] Spencer Dent: Sometimes there are quick wins. Sometimes we see this with our clients. It's cool. There are quick wins oh, there's an issue with one integration that most of our clients are on that.
If we can go fix that integration, that will completely change the workflow, make everything better. Other times it's We've had [00:33:00] clients tell us, department customers, their UI just felt old antiquated, and the other competitors have really, and it's okay, that's a, that's an 18 month overhaul for you to do.
It's worth doing cause you're losing customers left right. And center on this. So not everything's easy.
[00:33:19] Andrew Michael: Cool. And last question then what's one thing that you two noted about general retention that you wish you knew when you got started with your careers?
[00:33:27] Andrew Peterson: I think in B2B, Relationships matter to customers. A great deal that, you know, knowing that a company cares and has the intent to improve goes a long way with customers. And so anything you can do as a leader to demonstrate to customers that even. You can't fix every issue right now. The fact that you're listening, that you care and that you're being proactive customers, especially in B2B, are willing to give companies some leeway and some second chances.
And so if you can demonstrate that sort of [00:34:00] empathy for your customers and show them in one way or another, that you're listening and the channel of communication is open. And that you're willing to make change over time, even if you can't do it immediately that will get you a long way.
And if I, that kind of answers this question, but also strikes the other question too. If I was coming into a company, new CEO with a company that's really struggling with churn, just something as simple as me as a CEO and executive getting on the call, just go on one night after the other, talking to our best customers, our biggest customers.
Showing them that there's an open channel of communication and that we care might actually do a lot for churn in the short term, as you're trying to weigh, like what can we do from a product or business standpoint to address the bigger issues long-term
[00:34:44] Spencer Dent: In a world where you're trying, where we're trying to constantly figure out how do we quote unquote, scale, everything, right?
In some ways automated out the interpersonal action, right? So every time there's a challenge, we send an email or we chat about something. If you can actually get on the phone with someone and [00:35:00] talk to them, it softens everything. It's a lost art, I think.
[00:35:05] Andrew Michael: Nice. I think that's a nice closing.
A note is all for the show, but before we go, is there any final thoughts you want to leave the listeners with? Anything they should be aware of for speed with.
[00:35:16] Andrew Peterson: Just that you have a great next episode coming up and they can't, they shouldn't miss it.
[00:35:22] Spencer Dent: Which one is that? Gray is that this is a, this is an awesome, this is an awesome.
Podcasts like tons of great thought leaders coming in and an important topic that ever evolving, b2B, SaaS is ever evolving. So you need to make sure you understand what's happening in the forefront. And it's been crazy for us over the last five years. As we work with all the different companies we've worked with how much buying behavior has changed, how much go-to-market processes have changed and how much Really understanding your customers has been facilitated, but also lost in some ways.
So I think this
[00:35:53] Andrew Michael: is thanks very much, guys. Really appreciate. It was great chatting to you today and wish you best of luck going forward. [00:36:00] Yeah. Thanks for
[00:36:00] Andrew Peterson: the time Andrew.
Spencer Dent & Andrew Peterson
A new episode every week
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.