Why Envato launched a subscription service alongside its 15-year-old transactional business

David Brice


General Manager & Executive of the Customer Group


David Brice
David Brice

Episode Summary

Today on the show we have David Brice, General Manager & Executive of the Customer Group at Envato

In this episode, we talked about how David made the switch from a green tech business owner to a marketplace software business General Manager, why Envato launched a subscription service alongside its 15-year-old transactional business, and how the two business models are treated within the company. 

We also discussed how they balance the supply and demand function to make sure their authors are earning a healthy income on both products, how they minimize churn and increase retention, their health metrics, and what David wished he knew about churn and retention when he first started out.

Mentioned Resources



how David made the switch from a green tech business owner to a marketplace software business General Manager. 00:02:28
Why Envato launched a subscription service alongside its 15-year-old transactional business. 00:04:05
How the two business models are treated within the company 00:09:30
Retention initiatives at Envato. 00:14:30
How they balance the supply and demand function to make sure their authors are earning a healthy income on both products. 00:18:54
What David wished he knew when he first started out about churn and retention. 00:24:19


Andrew Michael: [00:00:00] Hey, David. Welcome to the show.

David Brice: [00:00:02] Hey, thanks for having me.

Andrew Michael: [00:00:04] It's a pleasure. David is a general manager and executive of the customer group at Envato. Envato is a private Melbourne based 500 person tech company. That's generated more than 800 million in earnings for its community of authors.

David leads a team of 150 plus people that are responsible for acquiring, converting, and retaining more than 2 million unique customers annually. Prior to Envato. David was the founder of a green tech company, focused on the development and commercialization of low carbon emission, cement and concrete.

So my first question for you, David, is how did you find the switch from a green tech business owner to a marketplace software business.

David Brice: [00:00:41] Oh, good question upfront. always had it interesting in digital space. So going back to sort of my educational background, had a digital bent to it, and always thought that I would get back to something digital.

The way that my life evolved, it went into a technology space that [00:01:00] wasn't digital. I actually have some chemistry in my background as well. So it sort of went down a, more technology, technological path, in that direction. And, we, we did very well in that technology space, but ultimately what I realized when working in physical, there is so many impediments to scaling, and.

It be time more and more obvious to me. Yeah. And I wasn't a digital person, not a physical goods person.

Andrew Michael: [00:01:27] Very interesting as all I care. I think talking about sort of transitions as well. It is quite a big transition, but your background as well, like going from chemistry to detect backdoor, ultimately having that sort of interest and intriguing thing and discovering that, that scale element, I think that's one of the greatest things around software is its ability to scale.

And that's also, I think why subscription businesses are so beautiful because then they've become predictable as well to a certain degree. something that's interesting. And I mentioned to you before we got on the call is like I've been an Envato customer for a long time, as well. I used to [00:02:00] use ThemeForest quite regularly, back in the day when being whipped designs, and still continue to use it today for certain elements here and there.

Whenever I need. Things. And one of the things I've noticed quite a bit of late has been this push towards a subscription business. Cause I think, traditionally like our new inventory. So as a transactional business, how it needed a theme, well, my website, I would come to ThemeForest I'd purchase it. I needed some music for a video producing come and get some tunes, but.

I never really saw it as a subscription business. And I think like, like it's definitely looked like there's more and more of this push and I think definitely, yeah, teammates probably be the ones that are sitting on this rock. And as you mentioned, probably one of the biggest day to day challenges for you.

So what is that process behind this? Like how is the business self started to evolve in this direction and what motivated them to do so.

David Brice: [00:02:54] Yeah. So that has been around for 15 or just on 15 years now. our bread and butter and [00:03:00] where we've come from is themes and code ThemeForest is our best known site.

and same for us remains a very big player in the premium theme space. The success of thing forest led us to. Some decisions about expanding thing for us. So what is now known as Envato market? So that includes sites like video hive, audio jungle road, June Rafiq river, and code Canyon and combine that's an, that is what we refer to as about a market.

And through that diversification process, we started to see, Actually different customer segments start to evolve, on, and by market by that, I mean, themes and code customers don't consume that much video and audio content. Now that might be obvious. but. The [00:04:00] proof's in the pudding. You need to, to actually look and own these sites to observe those patterns.

And likewise, you don't see men, a lot of consumption going the other way. So you don't see a lot of video audio, people are going and then consuming things. The way that we then saw that evolve was they're actually quite distinct types. When you, when you think of themes and code, they're more akin to software.

And then when you think about video, audio and photos, they're more akin to stock templated items, very basic items. There's no, there's no complexity to them. and so that bears out in terms of a whole range of different ways that these items might be handled either in a marketplace or in a subscription service.

for instance, when we think through the differences between themes and say video, It's very different cadences in terms of consumption patterns of those [00:05:00] items, they have different licensing types and different laws. Sensing desires from customers. The willingness to pay for an item is vastly different.

A customer is much more willing to pay for a complex piece of software in a theme than they might be for a stock video item or a particular quality in a theme world there's services that you might add to the theme. So. For instance, a theme author would look to offer support services on the back end of the particular sale.

They might also look to offer hosting services, but with a sale of a bit over an individual stock video, those services just don't exist. and that sort of drives you then to observe the actual customer need and the consent and the overall consumption need to make some decisions about. What type of business model might be more suited to me now, the handle, these particular items.

So in 2016, we launched a product called Envato Elements. [00:06:00] That's our subscription service that's and growing very rapidly has, in total and photo now more than 300,000 subscribers and for a single price with a simple licensing arrangement. You can now consume a whole range of more of those stock title type of items that we would have traditionally sold on graphic river, or VideoHive already are general.

we do have some themes as well on, on Envar elements. but it really has been interesting to observe those consumption patterns and, and note that they haven't really taken off in the invalid elements model. It's been quite observable to see that.toThere isn't data preference for things to be sold through a buy now type of regiment, Robin, a subscription.

Andrew Michael: [00:06:54] Yeah, I think that makes sense as well, to the Luxembourg natural usage patterns that you would have for these types of services [00:07:00] and how regularly you'd be doing them as well. So, definitely on the graphics side, photos, music sort of thing. This is something that you'd be consuming a lot more regularly and a lot more frequent.

Even if you think about it from the top of the. Personas who would be working on these, using these elements. But it's interesting that you sort of noticed this throughout the process, and then sort of. Identified an opportunity in the market when it came to the buying patterns that uses head and then what would be a better way to package this product and services.

So you mentioned two things as well. Like the one side of things is you have this marketplace business and then you have a subscription business. and. Do you see them as distinct entities and that's so like, those are the two types of models you have where the marketplace is really your transactional.

And then you have the subscription business on the side. Like how do you treat those two businesses internally as a company? Are they prioritized in different ways? Are there different team structures set up to support [00:08:00] it?

David Brice: [00:08:02] Yeas, they all set up a separate, Business units. but they do have a common leadership.

So for instance, I'm responsible for both the outcomes on the marketplace model and the subscription model. there's a deliberate choice that we've made there in that. there's is a part of this in that we are disrupting our own products with the marketplace model, where we're coming along with a subscription and going well.

We believe that certain customers that are, that we're transacting on market would be better suited to actually subscription service. And therefore we need to present that subscription service within the market shop front to those customers, because we believe ultimately that that will be a better outcome for our community and, and the customers and dental.

So. A lot of our focus as a business is around our community of authors and delivering value for [00:09:00] those authors. We have around 25,000 authors earning on our platform every month. And it's ultimately, it's, it's up to us to get the balance right. Between. Identifying customers that would prefer and do indeed like to transact in single purchase behavior versus those that would prefer and benefit from being on a subscription service.

there's a lot of data that we use and a lot of, analytics that we're looking at to try and really pinpoint those behaviors and, and how to actually effectively communicate to that customer that. Actually there is within this ecosystem, there is a better product for you. something that we spend a lot of time trying to be as.

We've got some broad based measures don't to be fair, but we also try to be quite specific with certain customers and trying to migrate that value [00:10:00] across .

Andrew Michael: [00:10:01] Yeah, it sounds like there's a whole lot of complexity that goes into making a decision like this and just thinking through some thoughts in my head as well.

There's sort of, how do you decide. And prioritize decisions to move to the subscription business. Was it sort of where you felt that there was an opportunity to increase the LTV from a specific customer segment and then starting to going down this path? How did you identify the opportunity? I think you mentioned as well, like in some cases it's just really as better for the customer, so.

How are you prioritizing this decision to begin with? Like, did you just see this opportunity where there was some money being left on the table from customers you could potentially monetize over a long period of time. And once you do move in that direction, like, what were those initial discussions or thoughts? Like in the beginning?

David Brice: [00:10:47] Yeah. I mean, there's an LTV component. but it wasn't the primary driving force here. The driving force was observing the usage patterns on the market and seeing that. A number of customers were [00:11:00] having trouble becoming aware of the breadth of the content that was available on our marketplace model.

So, I, for instance, a video hive customer would arrive at video hive, via search or via a referral link. And they'd come in and they'd see me do a hive and would be like, wow, that's, that's some fantastic content really interested in that I'll buy that content and then I'll leave. the interesting part about observing patterns and behavior was that that customer would, may, may make a decision to go and look it out audio marketplace, but it was likely that they.

Unless they were a sophisticated user and a high consumption user wouldn't connect that dot. They would be focused on consuming in the video space alone. [00:12:00] The big advantage for us on the subscription service is that that is a space holistic product. It's a single product that allows us to be able to cross promote and to be able to.

Basically made an, an almost an unmet need from the customer who would come along and say, Hey, well, that's really interesting. I love this video content of it, by the way, here are four audio items that you hadn't necessarily thought about. And now that it's in a subscription and that subscription happens to be on limited download.

Well, now you can navigate around this site and experienced that audio content and recognize that it's actually. Valuable to you. And that increases the overall stickiness of a product offering, but also meets a need that the customer may have had, but didn't know that we can provide. The actual thing.

Andrew Michael: [00:12:55] So in some ways, almost like an activation to your other products as all this [00:13:00] subscription services, really raising the awareness, getting people more into what invites or provides overall.

I do see that from the outside as well, because in the beginning I knew ThemeForest and a it's not the easier, it wasn't the easiest back then at least able to discover and understand everything that was available to you. I think over time it looked like you did a lot of experimentation around bringing the services closer together.

Trying to raise awareness, but

David Brice: [00:13:27] our strength is our breadth, but that's sort of the thing that from a content perspective, our strength is our breadth and that, wasn't necessarily obvious to a large number of our customers, which was the interesting part about what we were observing. it becomes more obvious when you tie it all together into a single subscription and then.

Release that value in a, a single, yeah, we tried to deliver on with the elements product, really keep things simple, simple [00:14:00] license, unlimited use, really good value. So quality and breadth in the, in the content. So that. There's a lot of that decision making that is required on the buy now marketplace model that gets removed. And in that simplicity of that subscription model,

Andrew Michael: [00:14:20] Yeah, absolutely. You mentioned a few things as well in terms of, bringing it, it's the concept of retention now and how you view it in Envato is that it almost feels like you've got a whole lot of, I won't call them retention problems, but retention, areas where you need to focus because you have one, one side, you have the marketplace where it's important for you to be retaining the content creators.

As you mentioned, like the 20, 25,000 monthly content, Contributors then you need to be retaining customers to keep those happy. And that's just from a marketplace perspective. And then now you have your subscription side of your business as well, where you both need to do the same thing in this case, again is like really making sure that you're [00:15:00] retaining your subscribers to your service.

And that in turn is able to sort of satisfy and keep. The content contributors happy on the backwards. And I imagine those are also different models and the way that they, content creators, make their money as well. And how do you go about this then in general? Like, how are your retention initiatives focused?

Do you see like the biggest opportunities or maybe the biggest areas for improvements at the company?

David Brice: [00:15:30] Yeah. I mean, you're spot on with the, the nature of that transactional relationship. the nature of the industry that we work in, the digital goods industry is that it is transactional by nature. they, it's very common for our customers to have subscriptions without the providers. That's just.

Effectively par for course, in the industry. So there is a, is a really broad set of choices available [00:16:00] to customers. And we recognize that and we try to build ourselves into their workflow in their day to day as one of the ways we both think about it as having one of those must have products. It's just.

One of the products that you would have as your, as your suite of various, creative, digital asset marketplace. Well, in this case elements, subscriptions. So the way that we have tried to differentiate ourselves from others, in order to. Improve our retention. And to minimize that churn away from that is there are obviously those competing interests.

We have the breadth, which is what I highlighted before. we then have tried to be broad, but also have a particular quality bar in the [00:17:00] items that we provide. One thing we've observed in market is that there are a number of providers that have looked to really expand their library. And by expand. I mean, they have hundreds of millions of items.

and in, in that world, you need to have very, very good quality, search and discovery tooling in order to be able to actually help the customer find the item that they want amongst a whole lot of, of items that may not make their need. For us, we've been quite conscientious about maintaining a rigorous quality. bar, so that when you're navigating that elements product in particular, you are right. Yeah. Ideally, same items that. Are objectively good quality, even if they're not items that you would necessarily [00:18:00] know how to use yourself or know what to do with, you would be looking at them and, and your eye in particular for something like a video or for photo would pick up that it's aesthetically appealing.

that means that we're not aiming to be. We're not aiming for the super large library and we're not aiming to be the specialist. We're not aiming to deliver on, every facet and type of search that you could look to for a particular audio file. For instance, we're looking to have a library that's good quality meets most of your needs and regularly hits the Mark in terms of being able to.

Help you quickly find an item that can help you fulfill your primarily in our case, a work need. we have a lot of professional customers. the, the things we then do to kind of de-risk, [00:19:00] that position in terms of that competitiveness, in that in the industry is we make sure that we're priced really well.

We're at $33 a month, which is significantly below what you might be looking at other sites. We then allow you to use, we have quite broad, broad licensing rights, and you can use the content in an unlimited fashion. and so that's all part of, again, flagging what I did, what I've mentioned before. it just keeps, it keeps it simple, keeps it easy.

keeps it clean. And you can rely on it then to just be there and work when you need it. and that's, that's been pretty much, pretty much the core of what we've been trying to do from the product perspective, to differentiate it from some of the specialists and some of the more cloud offerings that are available in markets.

Andrew Michael: [00:19:54] Nice. and then I'm thinking a little bit in terms of like retention from a value perspective, for [00:20:00] both sides of this deal. So the one is the customers that you have who use in consumers, contents, and then the other is the ones that create this content. And I think in a transactional model, eh, Feels at least from the surface that there would be only more money from those one off sales, as opposed to the, the subscription service.

And how does this sort of work? Because in the sense, maybe people are consuming a lot more from the subscription service. Do you see a pattern where you have certain amount of customers use your subscription service? That may be a good. Maximum value and maybe become a cost detractor. And then you get a lot of customers that end up using under utilizing the subscription, which sort of balances it out.

So that at the end, your content contributors are receiving relatively the same amounts. Or have you noticed sort of like a difference in the unit economics and how the business works from between the transaction and subscription?

David Brice: [00:20:55] Sorry. observations have been that. We've been [00:21:00] quite conscious of managing, author's expectations around earnings, on the elements platform.

And we've also been quite, aware of a need to demonstrate to our authors that there's there's value there. And in it's it's a mixed bag in terms of. And I'll talk through the model a little bit on elements. It'll help conceptualize it on elements. You, you are portioned based on the number of downloads of Autumn's your portion, a percentage of the total, every month on market, it's obviously based by the transaction and the author receives a payment when every transaction goes through, but you found that.

It doesn't always marry up. So some authors earn more on market than they do on elements, [00:22:00] but other authors with very similar, we'll learn more on elements, the mandolin market. And we've actually pretty consistently found that there is a, a positive story coming out of the elements model, where we've been keen to ensure that.

Authors are well remunerated on that subscription product. in comparison to them marketable market earnings, there are. The control mechanism that I'm flagging is that we've been quite selective about the authors that we allow on to elements. It's there are many more authors on the market product than there are on the elements product.

And therefore we've been able to balance that supply and demand function to be able to ensure that the authors that are generating a healthy income from that platform.

Andrew Michael: [00:22:54] That's very interesting. and just like, as you're monitoring this and seeing how the impact is, and [00:23:00] who's the benefactors from it as well, interesting that you seem differences as well between the two where some people can be more successful as a transaction, others as subscription.

And, like you said, others that have similar content seeing similar results on both, but, Then the next thing that I was interested in this subscription move now, as well as for trying to go in more in this direction, get more customers towards it so they can discover more of the product and extract the value is thinking about metrics for this side of the business and the subscription out of the business.

How do you view sort of retention in light side? What are some of the leading indicators you're looking for in a good customer? Do you have any specific activation metrics that you say, okay, once a customer subscribed and done X, Y, or Z, like the likelihood is they're going to retain, and then on a monthly basis, we expect them to do X or Y to stay healthy.

Like have you said to me your health metrics, like what does that look like if you mapped it out yet?

David Brice: [00:23:55] We have, I'm not going to advocate that it's perfect, but there's, we do [00:24:00] have, a lot of analysis around, particularly early stage onsite behavioral patterns. And we have a lot of understanding where we have an increasing understanding of, download behaviors, which when married up with, some of the navigational paths that.

Certain customers are taking it. It ends up being a pretty compelling, point of discussion about sonar or a particular customer type that we're looking for. That the most we were saying, okay, start with the initial onsite behavior. the customers that have intent when they land on a. Side the elements site have a very different behavior early on to customers that have low intent.

And by that, I mean, I'll define intent, but by that, I mean, a customer that's looking to buy and really wants to, [00:25:00] to consume the products that are the assets that are available and elements will. Quickly have a look at two or three different item pages. They'll look at, they'll go in deepen that and assess a lot of information.

I'll spend time on those item pages. And then they'll very quickly try to navigate towards the pricing page. A, an individual with low intent tends to click a lot. They will, book it, maybe. 10 items, but very, in a very shallow manner. So they'll spend very little time on those autumn pages and yeah, that's the type of customer that we, we try to get some information about maybe an email address or some point of contact so that we can reach back to them at another time.

But generally, yes, you can assume that those customers won't be the type, but, we'll. Ended [00:26:00] up, really engaging with the product. Now there's a big trick in there, which is to try and work out how to convert low intent customers into high intent customers. And that's obviously the be part of what we work on.

the other thing that is pretty clear to us is that the. Download patterns of monthly subscribers compared to annual subscribers is just vastly different. Our annual subscribers have much, but you know, generically annual subscribers have lower churn. They have less decision points. They're more committed to the product.

And, you can say that in a, In the monthly cohorts in particular, but the ones that are, Not particularly committed to the product, they will often arrive, download a few items, probably the items that they were [00:27:00] looking for initially, and then might, if they're, if they're likely to churn and they will have low engagement from that point forward until point at which they.

Decided to make it make a move. The more interesting pattern is with the annual subscribers, they will, they will make the commitment and yeah, they might have the same pattern of usage. They will, they will download two or three items the same. They will consume the products that they are after. But then you notice the usage pattern start to tick back out over time.

So I'll come back to the side a week later and then. I'll come back to the site three days after the week and, start to really engage with the value that it brings. so for us, there's a, there's a lot of, observation in that regard in that sometimes we have customers that are engaging in a way that would suggest that they're an annual, they would benefit more from being an annual [00:28:00] subscriber and we look to find ways to incentivize them to.

Essentially moved from a monthly subscriber to an annual subscriber because ultimately that's to their benefit, they'll get a discount, in purchasing the annual subscription and we get the benefit because we've acquired that customer for the year. And, and most likely beyond that, because we've, we know that that customer is, is a good customer with high intent.

Andrew Michael: [00:28:26] Yeah, what you're describing in terms of that monthly customer and coming in and downloading a few products and then not engaging, it almost feels like in that cases, they were probably better suited for the transactional model. but maybe just found things a little bit more appealing on the inverter side.

And, there's more people that are more committed to a yearly are more of those people are taking it as their job, or it's a serious thing that they ongoing and needing to extract that value continuously. If you're a content creator

David Brice: [00:28:58] or.

There is that. I mean, the [00:29:00] other thing to note, I, and again, talking back to the process, the, the elements subscription is at $33 a month.

which if you are looking to purchase, you know, a few products of the transactional marketplace model, you may find that it's indeed economically beneficial for you to just subscribe for a month. it's not something that we always see. And the, the, some of the more interesting decisions made by customers that, actually continue to purchase on our marketplace model and spend more money on the marketplace model then.

I'm actually going, subscribing and acquiring the same content from, from the elements product. I E being economically irrational, that's okay. Based on a level of comfort with their product, with the product that they're using and their existing behaviors, as opposed to, you know, necessarily, completely understanding how, The greatest [00:30:00] benefit that they could, arrive at through the subscription service.

Andrew Michael: [00:30:04] And then how much of your work then revolves around trying to bring those types of buyers over to the subscription service? Like, if you had to define the business, would you say like the priorities and move towards the subscription service? Or are you still sort of sitting in the middle where both businesses are really growing strong and there's no preference for one over the other, you just try to find the best situation for the customer and move them in that direction?

Like what would you say there's a preference for what subscription.

David Brice: [00:30:34] It's it's easy to describe in some ways and more complex than that in others, in that the higher price items on the transactional marketplace, are likely to be consumed on them on their marketplace and not necessarily yet fit a subscription service. The reason being that an author will look at. The [00:31:00] autumn and it may be selling for $50 on video hive, and it'll be a relatively complex item.

It might be more akin to that kind of software world, where they may be able to provide services or ancillary revenue that might exist around that product. And they look at that and they go, well, I could put this item potentially on elements, but. How does that, that balance we were talking about before, how does that revenue model stack up?

Is it in my best interest to have that content on the elements side of things? So we there's a real delineation there in the, the more, stocky. so more like a photo, more like a simple video item, the lower the cost of the item. The more likely it is to be. something that at this stage is totally suited towards the subscription model and the more complex the item, the more, the higher price it is, [00:32:00] the more likely it is to be, favorably consumed on the marketplace model.

There are those break points. Obviously you sort of start to enter that murky ground around the 20 to $30 mark for items where. That really comes to us to sort of demonstrate the value of both sides of the equation and ultimately there's discussions that happens with authors in that phase, where we are encouraging them to at least be on both and, and see for themselves about where that, balance in terms of reward and effort and return sits.

And that's the complex interactions you're dealing with. I an author who has their own business and their own way of thinking about the world and the way that they want to live in generate their own revenue, and then applying that through our shop fronts. so there's, there's a fair bit of handling that happens in there.

Andrew Michael: [00:32:55] Yeah. I can imagine a lot of complex relationship management as well, [00:33:00] too, to get right. Yeah. So the one thing I wanted to ask them as a follow up is like, you've been going at this for quite a while now as well. The advice, I think what is it almost seven years now, somewhere on this six, seven years.

So, and I think you've obviously in this time thought about churn and retention, lots in the context of not only the marketplace, but also now in the subscription business. What's one thing like that you wish you knew when you started that, you know, today about churn & retention.

David Brice: [00:33:30] They're us so much information online about churn and retention and it really does come down to in my mind. Anyway, these are the things that I didn't know at the time, I'd come out of a different industry and you start to read about it. there are some core principles to it as in. The more capable you are in many, a customer need and the more [00:34:00] capable you are  during basis, the more likely that customer is to stay with you.

I mean, that's kind of core to it. but applying models or, or different lines of thinking from across various parts of the digital industry often ends up in, False. So you can't. I ran a part of our hosting business for instance, for a few years in my time. And the hosting business has a very, very different churn profile to any of the digital goods business.

Now, maybe that's obvious, but they literally, you can't apply the logic in any way, shape or form it's in fact, It's distracting and can lead you to false outcomes. If you try to apply that across to a different type of business. And then even within business, like the digital asset business, [00:35:00] we have very different trend profiles based on the personas and the individuals that we have coming, coming through.

on aggregate, you can see these patterns of behavior and someone that's really interested in video. Once you get specific, you can start to really assess what's going on with that type of customers, churn behavior, but bucketing in the cohorts and trying to compare a someone who's really interested in audio compared to someone who's really interested in video compared to someone who's really interested in themes.

It just, it doesn't stack up. And too often, there is an aggregation of information that would say, Oh, your, your churn profile should look like X, or this means Y the, the truth is that to me, anyway, the truth is the data speaks for itself. There are rules of thumb available, but. [00:36:00] Ultimately, you guys should really stick to that kind of, positioning around understanding your customer need and being specific about targeting their data.

Andrew Michael: [00:36:09] Yeah, I love that. I think obviously it's one of the premises of the show and it's one of those things. When I see like turn benchmarks, I think they're absolute bullshit because it's so very difficult to, to sort of categorize and see where you stack up because there's so many factors and influences and you touched on a few, like the market that you're in the type of customer segment, you have your stage of growth.

Like you can go on in many different directions and, it's, it's very. Should be very cautious when you look outside to sort of get insights in ways that you can improve it, because ultimately there's just so many different factors in it, influence it. and also that, the fact that you mentioned, like at the real core of everything, it's really just about delivering value to your customers.

I think you can't get any more simple and straightforward the net. And I think that's a message that's often overlooked is this really like this problem is so simple. It's just making sure that our customers are getting value and continue to extract [00:37:00] value. And there shouldn't be training because.

Logically, in anyone's mind, if they have a problem and your solution solves their problem, why would they be wanting to leave? but, I have one last question. Cause I see we're running up on time as well, ask everybody in the show and let's imagine a hypothetical scenario, a you join a new company and general, attention's not doing good at this company.

And the CEO has come to you and said that they want to try to turn things around. They want to see some results and they're looking to see an impact in the first 90 days. what would you want to be doing with your time in that period to try and turn things around a bit for the company?

David Brice: [00:37:39] I like to start with data. So I'd be, I'd be grabbing as much information as I could around the usage pattern on sites and the way that customers are currently engaging with the product and trying to find points in which we had. Drop off or any observable feedback that we can get. You could, in 90 [00:38:00] days, you may be able to pull together some user feedback that give you some qualitative information that could support that data and that assessment.

but ultimately, if you can, if you can get in there and say a specific usage pattern in particular that maybe, Leading leading to churn, then that's where I'd start. There's so often. if, if the business is delivering on something that is, has value and, and does deliver that value, but then they're managing to acquire a customer and have them leave.

then that points to a failing on. The way that the product is actually enabling that customer to enact on that, like to find that value, to use it, to use it properly, that utility, that, and there may be one, two, three in bad cases. They might be a 10 things that are contributing to. [00:39:00] And experience for that customer that leads them to, to go elsewhere.

you'd have to be looking at, at the core proposition, if it was really bad, it'd be more like, one of the core promises that you would be failing on. and, and that is where, yeah, that's where I've started. If it was a three month.

Andrew Michael: [00:39:18] Great. So just starting with the data, like obviously making sure that your problem, your solution is solving a problem, a corporate, and then if it is like, where is it failing to meet, and help customers that are churning as a result?

It sounds a little bit like looking at activation and removing blockers from customers to make sure that are well to extract that value as much as possible. It's definatly , something, we talk about a lot on the show. as well. And yeah, so I think that's, it's been a pleasure having you today, David. I dunno if there's anything like final thoughts you want to leave the listeners with? How can they keep up to speed is anything they should be looking out for? for, we go,

David Brice: [00:39:56] look, you know, digital goods is an [00:40:00] interesting space. It has its own, its own quirks. I think. Maybe one thing I'd encourage users to go and read actually is a book called information rules by Cal Shapiro. It was, it's getting all doubts.

Actually, it was written back in 1998. but it's a book that. Books said it from a very economic perspective. It's not, it's not for a particularly creative user, but, it looks at the economics of digital goods and it looks at how, these models tend to work over time. And I found it a particularly, valuable entry point into the digital goods world.

Andrew Michael: [00:40:40] Nice. Alright. And we'll definitely add that to the show notes. There's also, if you're interested, there'll be a link on the site, to that book. great tool. It's been a pleasure having you today, David. thank you so much for joining and wish you best of luck now going forward.

David Brice: [00:40:53] Thanks so much.  Appreciate it.

Andrew Michael: [00:40:55] Cheers.


David Brice
David Brice

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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