Episode Transcript
[00:00:05] What's up, founders? And welcome to the In Demand podcast where we talk all about how to troubleshoot growth for your PLG SaaS. I'm your co host, Asia Arangio, the CEO and founder of DemandMaven. And I'm Kim Talarczyk, client services manager at Demand Maven, where we help SaaS companies reach their toughest growth milestones.
[00:00:22] All right, Kim, let's get into it.
[00:00:27] Hello, everybody. Welcome back to another episode. It's just me today. It's just me talking through one of my absolute favorite topics. And today's episode, we are actually going to cover a part of growth that is one incredibly challenging in the early days, but eventually you get to a place where it kind of smooths out and it irons out a little bit, and then you got to think about different things, but you got to think about it in a different way. And I think that's my ultimate goal for today. So the topic for today is the busy Founder's Guide to Retention and Mitigating Churn.
[00:01:03] Churn is one of those things in the early days that it's literally what you use to understand if you even have something in the first place. But also it, it gives you a sense for where do you stand in the pile of SaaS products and also do you have something that's relatively viable.
[00:01:20] So in the very early days when you first start and launch your product, you are traditionally focused on the core metric of making sure that you are below the magic number for Churn, which the magic number for monthly revenue Churn is going to be, you've got to be below 5%.
[00:01:39] But I'm going to put a big asterisk to that because there are some products that have what I'm going to call built in Churn, which basically means that there are some products that based on their usage, based on their go to market strategy, their, their place in the market, and also the types of problems that they're solving for people there may be built in Churn, meaning there's going to come a time where people naturally stop using the product or naturally cancel. And Built in Churn is the best way to think about. Built in Churn is like if you are marketing and selling a product that targets graduate students and they're supposed to use your product while they're a graduate student. The built insurance scenario would be when they graduate, they're going to cancel their account because they're no longer graduate students and the whole reason for using the product is to use it during their graduate studies or Whatever. That's an example of like built insurance.
[00:02:35] The vast majority though of products don't necessarily have built insurance. Of course this is highly contextual but, but the vast majority of products out there are going to be, you know, regular ongoing usage unless something dramatically changes for that person or the business.
[00:02:52] Some would argue that every product has finger quotes built in churn based on how you define it. But generally speaking, assuming that people use it on an ongoing basis, you want to see less than 5% monthly revenue churn per month. Less than 5% churn every month.
[00:03:07] That is one of the core SaaS unit economics and metrics. That indicates, okay, you've got something a little bit more substantial.
[00:03:15] The most ideal scenario would be if you're less than 3% churn. That would be even more ideal. 1 to 3% would be incredible.
[00:03:24] This is true for B2B. If you're B2C, 5% churn 5 to let's say 8 or even 9% churn is, is pretty common for B2C SaaS.
[00:03:35] But again this is, it's highly contextual for your product and your place in the market. And again, who else you're targeting.
[00:03:44] That's the first most critical KPI that founders focus on in the very early days. And it's something that they continue to stay dialed into even as they mature and as they grow, as you start to mature. So once you get to the like we'll call it 50k Mrr Mark, you're on your way to a million.
[00:04:03] There's another metric that becomes even more critical and that metric is also indicative of how much churn slash retention you're seeing over the long term.
[00:04:15] But as your business matures and as you grow, net revenue retention becomes the most critical metric and KPI as you go. The thing about monthly revenue churn so that 5% or 3% month over month, what's great about that number is that it tells you a lot about short term effects. Net revenue retention tells you a lot about long term effects. And specifically, just because you've acquired a customer, how long do you realistically retain them over time? What percentage of the revenue do you keep and what percentage of the customers or logos do you keep over the long term NRR tends to be the most critical number for understanding if you are poised for growth and, and also if you've got something sustainable.
[00:05:03] So that monthly churn number again is the number that you start with. That's what you tend to hyper focus, hyper fixate on and focus on. But net revenue retention is eventually where you mature into and that's the number that you really use to understand. Again, if you have something viable, sustainable, and also if you're ready for growth. If it's too low, you're likely, it's probably not worth it for you to over invest in customer acquisition.
[00:05:29] But if it's just at the right amount, then you probably could invest in customer acquisition and also focus on pulling other levers and that would continue to help fuel and support growth.
[00:05:40] Net revenue retention is a number that if you have profit well or even stripe used to calculate this for you. Now I think it's more manual but like Chart Mogul I believe has net revenue retention but most of you are probably going to be on profit well. If you have profit well, you already have this number at your fingertips. You just have to go log in, navigate to the retention reports, specifically go to the revenue cohorts retention report and you're going to look at what NRR looks like. From there it's going to give you a charter graph that looks really intense. But the bar at the bottom is what you care about the most. That's the weighted average retained.
[00:06:13] What you care about is what the 12 month number says, assuming you've been in business for 12 months. But the 12 month number is what you want to focus on. And if that number is less than 70%, 12 month net revenue retention, that says that you may not be, you may feel like you're struggling with growth a bit, but what basically what that means is you've retained about 70% of the revenue that you acquired 12 months ago. You still have 70% of that, 30% of it has turned and that is the number that you want to reduce as much as possible.
[00:06:47] This becomes critical as you mature. 70% it to me is the minimum.
[00:06:51] If you're at 70% net revenue retention, you probably feel like you're growing, but like at a snail's pace. If it's less than 70%, like 50 or 60%, you have a business that probably is not very sustainable and also needs a lot of work because people like you're, you're basically having to invest a lot of energy and resources to replace the amount of revenue that you're acquiring every single month.
[00:07:13] Interestingly enough, most marketing cycles are about three to six months.
[00:07:18] So if you're only keeping about half of your revenue every 12 months or maybe a little bit more, basically every six months, you've got to make sure you're really cranking the acquisition wheel to catch up and just to even grow you have to do. You have to do a lot of extra marketing work that may not actually be cost effective in the end.
[00:07:39] So that's why net revenue retention becomes super mission critical.
[00:07:43] Ideally it's 100% at 12 months and even more ideally it's more than 100%. So think like 110, 120%.
[00:07:51] What that says is not only are you retaining the amount of customers that you need, but you're, you also have enough expansion revenue happening in the business that is replacing everything that's lost. That's how you get above 100%.
[00:08:03] If it's like 80 to 90% growth probably again, is comfortable and you're probably growing at a, at a relatively decent pace. But there's always ways, if it's motivating to you to, you know, get more than that. Great. Um, 80 to 90% would be certainly acceptable. But just keep in mind that you really don't see like super fast growth until you're above that 100%. Nrr. So if you're dreaming of becoming like a 25 million ARR company or a 50 million ARR company or a 10 million ARR company and you want to get there fast, your number one mission should be to use this metric to identify ways to accelerate that growth. And that's one of the ways that you can think about growth acceleration.
[00:08:40] Okay, so those are the two types of churn.
[00:08:46] Let's break down really quickly.
[00:08:48] Churn in as a concept, actually not being all equal.
[00:08:54] So we talked about measuring churn, short term churn versus long term churn, net revenue retention. I've talked a lot about this metric in the past. It's a, it's a critical KPI, but, but it's also something that is very complex. There are many different things that feed into net revenue retention. Everything from who you're targeting to your product strategy to your pricing strategy, and also how efficient it is to acquire and convert those customers.
[00:09:18] But there's also churn as a concept. And there are different types of churn even within like the churn spectrum, so to speak.
[00:09:29] One of the most critical ways to understand how to think about churn is basically a way to describe people who cancel a subscription to your product.
[00:09:36] But what we have to get really clear about is not all churn is created equal. Some churn is much worse than other types of churn.
[00:09:44] So from here I'm going to introduce the concept of qualified churn versus unqualified churn.
[00:09:50] This is really, really critical because again, not all churn is necessarily Created equal.
[00:09:54] Some churn you're going to care more about and some churn you're going to care a little bit less about.
[00:09:59] You still care about the churn, but some churn is going to hurt more than others. For example, if someone comes to your product and you kind of know that they're using it in a weird way, it's a, it's a stretch case, it's a stretch use case for them to use your product.
[00:10:17] You also maybe notice that like they're not exactly the right type of industry, they're not exactly the right type of buyer but maybe your self service, maybe like your plg and you know, you might not necessarily, like you're not necessarily going to be like oh no, you're so and so, you're not going to be able to buy this. Like there's always going to be those types of folks, right? You already know though just based off of their profile, based off of certain details that you have about them that this is probably not going to be the best type of customer for you. But because it's self service or PLG or whatever they're able to buy technically anyway when let's say time happens, time goes on and lo and behold they cancel, which isn't super shocking to you, you kind of had a feeling just based off of the details about and the context about them, their account, their profile, whatever it was.
[00:10:59] Now that person is going to end up in that churn number no matter what.
[00:11:05] And that may feel a little bit frustrating because if you think about it, they weren't necessarily the best fit anyway.
[00:11:10] Should we be including them in our churn number if they weren't necessarily the best fit? And again that's where we get into qualified churn versus unqualified churn. So this is an example of churn that is unqualified based off of certain details about this type of user you already know it's probably not going to be a good fit for them.
[00:11:28] Now a lot of self service motions, a lot of product LED funnels don't do enough qualifying, I'm going to say qualifying when people sign up. Sometimes people sign up for your product and it's just like a social sign up. They connect their Google account but you don't collect any other information or data about them. And maybe, maybe you know, there's a, certainly a use case for some businesses to do like data enrichment on the back end so you don't have to ask additional questions about them. You could just use like a tool to, you know, if you have their email address, you can enrich like who that person is and get details about them. Your mileage may vary for these because obviously some of these can be very out of date. But all that to say if you aren't collecting hardly any data about them when they first sign up for your product, then it's going to be really difficult for you to qualify them or pre qualify them.
[00:12:17] If you have a sales motion, it's going to be much easier for you to qualify folks because the hypothesis is that if it's sales led then they have to talk to a salesperson in order to use a product or even get access to it, sign an agreement, whatever it is with sales.
[00:12:35] It's a similar, it's a similar way to think about it. But if you, if you were to think about a sales function, ideally we are qualifying folks and we're qualifying them well.
[00:12:48] So if they were to cancel, the hypothesis would be, well in theory everyone would be qualified.
[00:12:55] So any and all churn that we get from a sales led motion, it's going to feel relative pretty painful because the hypothesis is going to be that those folks should be qualified from the get and if it turns out that sales qualified someone who shouldn't have been qualified, then that speaks maybe more to the, to the sales process.
[00:13:16] But on the churn end, if it's a sales led motion, all of that churn is going to in theory hurt because they should have been like really well vetted and the hypothesis will be that all the churn is qualified.
[00:13:27] But in a product led self service motion, if you're not asking any questions about them when they first sign up and it doesn't have to be like, you know, they have to do like a full survey. It could literally just be like two to three questions like what are the two to three most critical things that you need to know about them to know if they're going to be qualified or not? Is it their role? Is it their business size? Is it their use case? Is it their, this is B2B. If it's B2C, is it their age? Is it their gender? Is it their geographic region? Which in theory you could get, you know, automatically.
[00:13:56] But what is it is could also be like I mentioned the example of graduate students before. Is it the type of graduate program that they're in? Is it the school that they're in? What's the most critical information that you need about that person again to know if like okay, this is going to be a good fit or no, this is not obviously this requires a really good understanding of your ideal customer profile, your icp. If you don't have a defined ICP and a really good defined icp, not something super willy nilly and random. I've given examples about this in the past, but like if you're targeting small business owners, you don't say small business owners in the us you say, nope, I'm specifically targeting cake shop design. Restaurant people like cake shop designers or like cake designers in bakeries in the United States in these specific regions. Like that's an ICP profile. Small business owners in the United States is not as small, it's just not an icp. You're never, you'll never convince me that that's an icp. So you have to have a very tightly defined icp, but you also have to really get super clear on what is the information that you need to know if they are your ICP or not. Chances are asking two to three questions will get you that answer. That's why you're going to notice for a lot of self service PLG products. When you sign up for those products, you're going to notice that the best ones in my opinion ask you a couple of questions about who you are to really get clear about.
[00:15:18] They're trying to understand if you're going to be a good fit or not. They're trying to pre qualify you.
[00:15:23] So that's how we understand what that funnel and that motion looks like with a product led self service motion, which I would wager that most SaaS companies are PLG or at least self service of some kind.
[00:15:34] I would wager that the vast majority of them could be collecting better information about these new user signups, but if they don't, they probably struggle a lot with understanding why customers churn, but then also getting really dialed in to who their actual ICP is.
[00:15:55] The reason why it's important for us to understand qualified churn versus unqualified churn is because not all churn is created equal, but also because the top of the funnel is ultimately what creates the churn metric. At the end of the day, I know that sounds really obvious, but if we, if we open up the funnel to any and everyone, which a PLG product in theory will be, technically anyone can sign up for this, but we don't get really clear on the portion that is actually qualified.
[00:16:30] We're measuring churn for a funnel that may not actually be fully relevant and also we may actually have better retention for a sub segment and that then therefore in turn informs go to market Meaning once we get really clear on, oh, this is the segment that seems to perform the best in our product, that should then in turn go back to marketing and go back to customer acquisition strategy and say, okay, how do we find more of these people?
[00:16:56] And then you can, you can figure out what are some ways that you can make sure that your marketing and your customer acquisition strategies are targeted enough to actually reach the right people. You're always going to get people who sign up for your product who are not a perfect fit. That is okay. What matters is that you have the ability to segment those folks out and, and really just focus on the pipeline that actually is qualified. And also, therefore, when you think about prioritizing research, when you think about prioritizing your product roadmap, when you think about building features for those people, when you think about growth, you are dialed into that icp.
[00:17:33] So what we take, what we do from here is when we think about improving retention and reducing churn, mitigating churn, the first step is really getting super clear on what's qualified and what's un qualified.
[00:17:47] The second step is understanding why do the qualified people churn?
[00:17:52] And does that look different than people who are unqualified? Here's why this is important.
[00:17:58] So when you want to reduce churn, we have to understand why do qualified people ultimately cancel.
[00:18:07] There are a couple of rules, however, to why people cancel.
[00:18:12] The reason why people cancel, there are. Well, first, there are a couple of rules here. The first is there's. It's never just one reason why people cancel. It's usually like 8 to 10 reasons why people cancel. And they stack up over time.
[00:18:26] The person gets frustrated or they get tired or overwhelmed, and then they say, you know what, I'm done.
[00:18:31] Then they start the cancellation process. But the cancellation process actually happens days and weeks and sometimes even months before.
[00:18:39] So someone might be a customer for 12 months, a whole year.
[00:18:43] They may start feeling the effects of cancellation and wanting to churn at month seven.
[00:18:48] And the thing about it is that again, it's never just one reason. It's usually like five to 10 reasons. I'll give. I'll say five, I'll drop the number down a little bit. I'll say five to 10 reasons. And they usually stack up over time.
[00:19:01] And there are usually telltale signs that person is about to turn. There are usually indicators, leading indicators. That person is starting to kind of feel like, okay, I'm not getting the value, or there's something about my context that is making me not get value.
[00:19:17] Here's the Thing though there are certainly going to be, there's certainly going to be a slice of customers that you're just not going to be able to control at the end of the day. Like none of this you can fundamentally control except for how your product provides value and for who.
[00:19:32] But there's always going to be a slice of qualified customers that experience an event that changes their context enough that they don't need the product anymore or it passes on to someone else and maybe that person is less of a fit. Things like promotions, leaving jobs, getting hired, someone else. It could also be high level company goals. Like the customer's goals have changed and it has nothing to do with them necessarily. Like there are all kinds of things that happen in the background. None of those are things that you can realistically control that segment of people.
[00:20:05] You don't ignore. You just keep in the back of your mind of like, okay, these are things that could come up in customer success calls. These are the types of things that could come up in sales discussions and conversations.
[00:20:18] It could certainly come up in a churn cancellation survey. So if you notice that those are reasons why people, qualified people in particular, stop using the product is because something in their business has changed that is still worth you knowing and understanding. Because again, that's a whole portion of the pipeline that you can start to predict over time how much revenue loss may happen just because of that. And that can fluctuate over time. So for example, there's a company that I work with that they just know 2 to 5% of their qualified churn pipeline is going to be because the business just goes out of business. The buyer, their business just will, will, they won't, they won't make it. You know, like they'll have to, they'll have to close business. There's 2 to 5% of that pipeline is going to be just for that alone. Even though, even though they're the qualified on paper. But there's nothing that we can do about that. Right?
[00:21:12] There's a more important critical segment though that's going to be where you actually spend your time and your energy. It's going to be on all the stuff that you can control.
[00:21:19] So you're going to be listening for things like not just features that are missing because most customers can't articulate to you what features they'd like to see. Sometimes they can.
[00:21:29] We've talked about being friction vocal before versus being completely, completely unaware friction wise. Like they're friction unaware. They, they simply just can't speak about things because they don't have the language to. They're not product people or designers.
[00:21:44] But there are some people who are going to be very value aware in terms of they want to be able to accomplish these things. They can't see your product doing that for them for various reasons. It could because of the experience, it could because the product just isn't that extended quite yet into particular jobs to be done. And it could also be that it they, they can't conceive of the product doing that because it's just not the experience or the use case or whatever that they're anticipating.
[00:22:16] So very like square peg, round hole, like sometimes that can happen for folks and they just don't see your product as being that. So then that begs the question of okay, how do we adjust? How do we evolve if it makes sense for us to do that?
[00:22:28] That's one data point.
[00:22:31] The magic of this process is having more than one data point. It's having dozens of data points. You'll start to notice patterns.
[00:22:39] You'll also start to notice too that there will be value gaps.
[00:22:45] There might be processes or jobs to be done that your customers are trying to execute. Your product fits in some of the steps, but it doesn't fit in all of the steps they need. And so they end up using or cobbling together other tools or systems to try to accomplish the jobs to be done. That's another product opportunity.
[00:23:03] And then there certainly are going to be scenarios where it could be due to pricing, it could be due to it's not what they thought it was, or they had the wrong impression of something, or they they while they are qualified on paper, there's something about the interpretation of product to value that they missed.
[00:23:27] And this could speak to the activation process.
[00:23:30] Maybe they didn't fully activate, maybe something along the way did not click for them. Even though in theory, on paper it should be a slam dunk win. It should be like this is a perfect fit.
[00:23:43] And again, this is the qualified segment.
[00:23:46] If they're unqualified, it's not that we don't care about the unqualifieds, we care about the unqualifieds. The reason why we care is because folks who are unqualified, I always say those are just friends we haven't made yet.
[00:24:01] If they're unqualified, those are just people we're not able to serve right now. But they might be part of your larger tam, but they're not part of your SAM or your som. So TAM is total adjustable market. That's everyone that you could possibly Sell to.
[00:24:15] Then there's service addressable market and then there's service operable market.
[00:24:19] So maybe they're just not in the SAM and the SOM yet. And that's okay. You keep tabs on them, you want to understand them, you want to make sure that you're dialed in to some degree.
[00:24:30] Eventually your product will grow enough where those unqualifieds portions of them will suddenly be qualified to you because you've maybe extended the product, maybe you've expanded, go to market, you can serve more people or more types of people, more segments, whatever.
[00:24:47] So you, you stay dialed in, but you maybe aren't going to prioritize yet what they ask for on a roadmap anytime soon.
[00:24:56] And also similarly you may discover that there's just a portion of it that just will like they're, they just really aren't part of your tam. And then like those are actually the people that you, you do ignore. But generally speaking you want to stay relatively dialed in.
[00:25:10] So that's how to think about Churn. That's how to think about the short term versus long term. And then also qualified versus unqualified.
[00:25:19] What do you do with all of this?
[00:25:22] Which is like the million dollar question.
[00:25:24] So the first is there are two scenarios that you might be in if you're listening to this episode. The first is it's a dire emergency. You need to reduce. Turn.
[00:25:35] Turn needs to reduce significantly within days, weeks, months or else you're going to be in some big shit, big doo doo. It's dire, dire emergency.
[00:25:47] The second scenario, and this is probably the more common one, the second scenario might be Churn.
[00:25:55] Actually there are three. Now I think about it, there are three are three camps you could be in. The second is going to be maybe Churn isn't great, but it's not bad. Like it's kind of like eh, it could be better.
[00:26:08] The third camp and actually this I, I take it back, this actually might be the most common one.
[00:26:12] The third camp could be that Churn is actually good. It's less than 5% but you've never thought more about it beyond just we, we measure monthly revenue Churn. We measure customer Churn.
[00:26:30] We have a cancellation survey but we really don't do anything with it beyond that.
[00:26:35] And here's where I'm going to tell you that one of your greatest growth levers that you're ever going to pull ever Do I like it more than pricing?
[00:26:47] I'm thinking pricing actually still might win.
[00:26:51] But your number two greatest. No, I'm still, I'M saying it's number one because even if you change pricing, it doesn't matter if this thing is not true. So it is the number one. It's the number one growth lever you're ever going to pull.
[00:27:02] And that's the translation of product to value.
[00:27:08] And the way that you find opportunities to translate product to value is through churn analysis. Why do people, particularly qualified people, leave? Why do they leave and why do they leave?
[00:27:24] Particularly for reasons that are in your control. So it's not the segment that's gonna churn because things about them change that make it hard or impossible for them to keep using your product. It's gonna be for the sliver and I would say it's probably larger. But why do great people leave, particularly for reasons that are in your control?
[00:27:46] Most of you are probably in that camp in the first camp. If it's a dire emergency.
[00:27:51] Now that I've kind of, I've given you this like four layer framework, I guess of way how to think about Churn, how to think about like okay, there's how we measure it and then there's how we divvy up the number. Because it's not just one global number. The global number is great, but it's actually more complex than that.
[00:28:07] If it's dire emergency, what needs to happen is you need to stop every single project in your business.
[00:28:14] It doesn't matter how large or small you are. Stop every project. I'm serious. Stop every project. It's not important. It doesn't. Because it actually, if it's not helping you fix Churn and, and plug this, this hole. It. It doesn't matter if you're doing marketing, it doesn't matter if you're doing support.
[00:28:32] It kind of doesn't even matter actually. It doesn't matter if you're doing support, don't stop support.
[00:28:36] But it kind of doesn't matter if like, if you're pushing features or if you're launching campaigns or if you are doing sales, you're just, you're filling a leaky bucket. Like you're filling something that's just gonna churn later. Literally. Cuz like if churn is really, really bad. And to me that would be like 20 to 30%. Anything more than 10% to me is like that's something you gotta fix. Um, you can get away with like 10 to 11% if you're doing like B2C. B2B. Maybe you can get away with like again that 10 to 11%. And also too let's make sure that the number that we're using is the qualified pipeline but cause you know they're unqualified. Again, it doesn't really matter right now.
[00:29:14] But if you're finding that in your qualifieds the turn rate is super high. Problem. It's a problem. It's a big problem.
[00:29:22] You need to stop every single project.
[00:29:26] The second thing that you need to do, you need to require a cancellation reason.
[00:29:32] Meaning they cannot. People can no longer cancel without a short survey. We're talking. They need to be able to pick some reasons and ideally it's, it's more than one. I actually do recommend doing like a multi select on this because again the reasons why people churn are layered. There are usually more than one reason. It's not usually just one thing, it's usually like several things that stack. This is just from experience of doing tons of churn analysis.
[00:30:00] The second thing, if you are hardcore, you should be able to cancel without talking to someone. I think that that is now the law.
[00:30:07] It depends on the country you're in and like you know your terms of service and all that.
[00:30:13] But you could automate a process where when they cancel that they book a call that you've still canceled their subscription. So it shouldn't be a requirement to cancel. But you could put this as part of the workflow.
[00:30:27] Hop on a call for every person who cancels, particularly for every qualified person who cancels.
[00:30:33] Start tracking the reasons beyond the surface level bullet point reason. Because again it's usually more than one thing. It's usually several things that happen over like a period of time.
[00:30:44] The stuff that you can control, document those things. The stuff that you can't control, also document those things. Because it's still helpful to understand and to know. But what you want to get at is where did the product to value process break down?
[00:30:56] Because that is the whole purpose of having your SaaS. It's software as a service, which means you are providing software to conduct a service that provides value.
[00:31:08] So product to value, that's the pipeline that you are trying to troubleshoot and fix. Because the reason why people churn is because it breaks apart. You add price into that and now you're saying product to value for a cost are those imbalance.
[00:31:24] So there are going to be people again who are like this is too expensive. But really what they're saying is the product to value pipeline is not balanced with what I'm paying. So you gotta, you gotta unpack that. And then similarly if it's not because of price, but it's just because they're not using it enough or they're like, not what I thought. Like, there could be all kinds of things or it's missing things you got. It's, it's a, it's a similar type of work, but you gotta dig into that too. Where did the product to value pipeline break apart?
[00:31:51] Remembering that customers aren't going to be the best necessarily at telling you what to build. But your goal is not to ask for what feature should I have built? It's to be, what value were you hoping to accomplish? What were your jobs to be done that you were trying to accomplish?
[00:32:06] And can you show me where that fell apart in this?
[00:32:12] And you're going to find, well, one, it's very possible that people weren't using the product in the way that you thought. The other two, that's very possible is they never actually activated properly. Like, they never actually hit the aha moments. And then the third final thing could just be, maybe they get it, they get the product, they understand it, but it's like it's just not what they needed.
[00:32:32] And that's a, that's, you know, a different thing to analyze, but within the, within the qualified kind of sphere. That's how we think about it.
[00:32:39] You may find after doing this that even just two weeks of doing this, you might have to dramatically rethink how you're delivering product, how you're building, what you prioritize, and how it feels to use your product and for who.
[00:32:55] You may also dramatically change who you target.
[00:32:58] You may dramatically change pricing, you may dramatically change activation, you may do all of those things. You may do one of those things, but all of this culminates into what makes people stay versus what makes them leave.
[00:33:12] And if, again, if you're in the dire emergency camp, that's how we think about it.
[00:33:18] If you're in the camp of Churn is good, it could be better.
[00:33:23] This process is still going to be valuable for you no matter what. You may not be as aggressive about, you know, hopping on a call with every person who cancels. You can afford to be maybe a little more chill, but if it's, if it's a dire emergency, have less chill. Pause. Every project, have less chill. If it's like, it could be better.
[00:33:41] You can have more chill. You can be chill about this and you can kind of vibe through some of the challenges, but the process is relatively the same.
[00:33:49] You just may conduct your Churn analysis on an ongoing overtime perspective. And of course, like you may, you're gonna do other projects, you're like, you're not gonna pause every project and, like, treat it like it's an emergency, but you are going to go through the process also and look for the opportunity.
[00:34:05] And then if you're in the last camp, we're like, actually, it's good, but we just don't ever think about Churn like that. Like, we don't think about it beyond what it is.
[00:34:13] This process is going to do something different for you. It's going to be more about finding opportunity.
[00:34:21] And if you don't have great or if you have, like, acceptable net revenue retention, this process is going to be really good for helping you get above, like, into that 100% mark.
[00:34:31] Because this process does speak to a bit of product discovery as well, and it can also help with this side of the fence. So if you're thinking about growth and expansion, this process can really help you identify opportunities that maybe are harder to kind of suss out of. Paying customers who seem happy on the surface.
[00:34:53] Churn customers, they're unique because they've experienced it and they had the breakdown. And you get to explore where that breakdown actually happened.
[00:35:02] Paying customers won't know that yet, necessarily.
[00:35:07] So all that to say if you're in that third camp of, like, yeah, it's good, but, like, it's actually really good and we don't ever think about it, then this is going to be more of, like, a. A growth process for you in that it's going to help you identify potentially expansion opportunities. It's going to help you identify.
[00:35:22] It's definitely going to help you identify how to improve net revenue retention over time. So I digress. But all that to say, I hope that this breakdown was helpful.
[00:35:31] A. And I also hope that, yeah, like, it gives you a different way to think about Churn. I think what most teams miss about Churn, again, is they kind of look at it as one big number, but really they should be segmenting the number and digging deeper from there. And also they should be open to it, opening up new doors for them and to rethink how they ultimately fundamentally deliver product, which is how they deliver value. And for who one of the most critical parts.
[00:36:03] Okay, thanks again for listening. And, yeah, I'm excited to continue talking about this topic. And, like, how do we, when we do this analysis, how do we translate it into product insights and product value? Happy to talk more about that and, like, what that process looks like, but thanks again for listening. Bye, y'. All.
