Hi all -
Stage 2 Capital has a helpful way to think about customer retention:
Instead of waiting for churn to happen, you figure out what metrics are strongly correlated with retention.
Once you know what these metrics are, you design your sales, onboarding, and product experiences to help customers achieve those metrics. As fast as possible.
I’ve spoken with a few other businesses and realized that a lot of us rely on customers changing their processes or behaviors.
When you’re selling “onboarding software” or “QA automation software”, you’re often bundling the software with “new, better processes to onboard customers” or “new, better QA behaviors.”
This means customer success and retention relies on process/behavior changes.
And that’s where I see a lot of challenge & opportunity.
The challenge is that changing behaviors and processes is hard. Plus, most of modern software is sold as simple, effortless.
The opportunity is that when your product sustainably changes behaviors, your retention will almost certainly skyrocket.
Changing behaviors and processes
Look at fitness businesses - they sell transformation but require commitment and effort. It won’t be easy, but it will be worth it.
In the software world, we could do something similar.
We could create courses, bootcamps, accelerators. Where prospects and/or customers come to achieve some sort of transformation they desperately want. They put in the effort, they get the result. (And, they crush the metrics that predict our software’s retention.)
At my company, hiring managers need to change a few behaviors to maximize our chances of success and retention.
So in a few hours this week, I made a bootcamp for hiring managers. We’re going to use it as part of our onboarding, but I can foresee us using it in customer acquisition, upsells, or as a standalone (paid) demand product.
Here’s how I thought about building it:
Start with the course title based on the outcome your customers want to achieve. I made ours a 1-week hiring bootcamp. For a friend’s company, this could be: “4 week QA automation bootcamp. Get 90% of mission-critical tests automated in just 2 hours per week.”
Put together an MVP in an hour. For me, this included:
A barebones content calendar with the “workouts” my customers need to do and 1:1 check-ins with their “coach” (me)
Emails for hiring managers throughout the course
Offer early access to a select few customers / prospects.
Test how customers respond to the title, the outcome, and the time commitment. Run a trial, watch the success metrics, and build from there.
Let me know what you think - happy to brainstorm something like this for your business!
Rob
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PS: One of my employees this week said something that I’m thinking a lot about. “Once I shipped a really fast & narrow version of X feature, what I needed to do next became intuitive.”