226: Crushing Churn, with Jackie Cook | The New Marketing Stack

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Increase your client retention rate by 50%+. Discover data-proven results and tips to help eliminate churn.

Jackie Cook, Chief Strategy Officer at Vendasta,  gives us the low-down on churn, not  just as topic but because churn is everything, churn is the inverse of growth. In this weeks episode she shares the results from her comprehensive study on churn. Jackie and her team compiled data to give us the details on how to bring down churn, she provides some great tips, insights and when to go back to the client to check in.

Get the churn study here!



George: We are continuing with the “Conquer Local” podcast all around selling the digital marketing stack to your customers. We are putting together the thought process around this series of podcast. We’re like, “Who are we gonna get in to talk about awareness? And who are we gonna get it to talk about websites? And who are we gonna talk about listings?” We tried to do that. We tried to bring you industry experts that have been focused on those solutions and solving those problems around the stack. You can’t just sell one thing. What we need to be doing is solving more than one problem. And I have a guest online that is gonna speak all about that, our Chief Strategy Officer at Vendasta Technologies, my colleague, Jackie Cook, joining us on this week’s edition of the “Conquer Local” podcast. Hello, Jackie.

Jackie: George, it’s a pleasure. Finally, you asked me. I’m just honored.

George: I really appreciate you because, you know, you’re not even done your maternity leave yet. How’s Lex? Is he with you right now? Do we get Lex on the show, too?

Jackie: You know what? He’s been on half of these calls that I decided he get a break today. So, I’m giving him the day off with Grandpa.

George: We’re in-studio with the one and only T-Bone, our sound engineer, producer Brock. And here’s what I’d like you to do though, Jackie. Can we make sure that you play this for Lex in his headphones so we can get him an early start on being at “Conquer?”

Jackie: He’s one of your top subscribers, don’t you worry. He’s conquering local and diapers, and so much more.

George: I just love that when you ram the “Conquer Local” podcast down your young son’s ears when he can’t even fight back. So, that’s fantastic. What we’re talking about and there’s nobody better to talk about this topic, and the topic is, when I go out and figure out what the solution is for my client, there’s a number of things that you have learned through your team in digging into the data. So, can we set the table around why you’re here and what we’re hoping to learn out of the next 25 minutes or so in the “Conquer Local” podcast?


Churn is Everything

Jackie: Today’s discussion is all about churn, and not because churn is a topic, but really because churn is everything. Churn is really the inverse of growth. So, if we figure out in glean insights about churn, we can become better sales professionals. And obviously, and in turn, help our partners grow and our customers and their customers, and your customers grow. And so, today, we’re just gonna be covering a churn study that we actually pulled together for last year’s VendastaCon in beautiful Banff, Alberta. We shared some of the insights. I’m gonna talk a little bit from that study. And, of course, we’re going to be continuing to feed into that study and continuing to learn a little bit more about churn from your partners.

George: When we are out talking to customers, and that is our media partners around the world, and we bring up this data, it’s…you know, there isn’t one vice president of sales, Chief Revenue Officer, CEO that isn’t like, “I need a copy of that,” because it really brings to life to something that we probably knew and we felt. But now, we’ve got some real data to back it up. So, I’d really like to dig into that.


Data in Black and White

Jackie: You’re absolutely right. And let me just preface this. This isn’t our data. This is our customer’s data. This is our partners who have told us in the field, “You know, this is what I’m finding.” And we just got the privilege of working with so many brilliant partners that we could kind of pull together not only what they were telling us, but actually back it with data. And so, the study was conducted by, I’m gonna give mad props to a gal named Stephanie Goertzen who is on our business intelligence team. She was the one that…I’m the eternal optimist and she’s the eternal realist. I would throw out questions and say, “You know, can we dig into this?” And she was the one that not only produced answers, but made sure that those answers were verified in, you know, black and white. There’s no gray in this. So, that’s what we’re gonna share with you today.

George: So, I’m… you know, we’re waiting with bated breath. What was the number one finding of this study that just knocked you on the floor when you saw the data?

Jackie: Well let’s build up to that a little bit because I think that’s the most exciting thing. What we went into the study was really testing a number of hypotheses. Some of these hypotheses were tested and verified what we thought in our guts. And others, actually, disproved what we thought in our guts. Some, we didn’t have conclusive evidence. But really, the three topics we wanted to understand was what’s making customers leave, when did they leave, and really, what can the impacts of growth with by looking at churn data? Really, it came down to three things. One is sell customers what they need. That’s nothing new. That’s what you’ve been really talking about on your podcast a lot, George. And the “Conquer Local” is all about being consultative and being helpful rather than just ramming, you know, digital products down our customer’s throats. Two is making sure that customers have the ability to participate. And three is being that single trusted provider. As George mentioned, you cannot be the listings guy or the website gal, or the social group. You really need to be that agency of record, that single trusted provider, so that when they do have a need, you’re right there to capture and to help them along that digital journey.

George: Well, I will tell you that in my career as a salesperson, the one moment that I dreaded was when I was talking to one of my top-10 customers and they brought up that they were having a conversation with somebody else. So, let’s say the ability in 2019 to have all of those solutions at your avail as a trusted local expert, we’ve never really had that before. So, it’s very exciting where you’re in front of the client and they bring up a problem or a need that they have, and you’re “Oh, I’ll go over here to Marketplace and I will enable that Product. Now I have it and I can solve that problem.” So, you know, it’s an exciting time as a true marketing consultant if you are one, and I know there’s…you know, all of our listeners aspire to be that, to be able to offer those solutions.


Nobody Knows Your Customers Better Than You Do

Jackie: Absolutely. And it is really as much of a defensive play as it is an offensive play. You might have a specialty. And what we found in talking to our partners is they might not know listings in and out and top to bottom like someone else does. But if you can make sure that you just know enough and really partner with the best technology providers and the best partners to help cover that area, then you can provide a need that…you know, you don’t necessarily need to be the most expert or the deepest expert in some of these areas. You just need to have the ability to point them in the right direction. So, what we say is, you know, you don’t need to be selling every solution in the whole market, but you need to be able to offer a solution when the need is there, and find them that solution because nobody knows your customers better than you do. And that’s your core value proposition. Keep looking in those technology a lot more than you do, but nobody’s gonna know your customers better than you do. And you better keep that relationship because it’s sacred.

George: So, the ability to take that relationship and add more products and services to solve more problems, there’s a big opportunity for a win there?

Jackie: Yes, absolutely. And I mean, speaking of some of the data, what we found is, actually, when we looked at the difference between solving or selling an offer in one solution to offering two, three, four solutions, and as we grow the study, more solutions to the Marketplace, we saw a drastic difference and a huge impact on the level of retention that these customers had. So, just to kind of jump into it, you know, when we looked at folks who only sold one solution, we saw retention rates after. So, just to kinda tee the study up, what we did is we looked at 100,000 SMBs or local businesses across North America and we looked at partners who had been with us for a minimum of two years, right, so we could keep that consistent data set. And every dimension we looked at, we looked at how long could retention last, I guess, through these different variables, so a survivor analysis. And what we found was, specifically, when those agencies who sold more than one product, the difference was astounding. So, those that sold one product, we saw retention rates after 24 months of about 24%. And that continues to grow as you sell two, three, and four products. Those accounts or those local businesses that subscribe to four products, we’ve seen retention rates as high as, like, 75%, 78%. And what that really leads us to believe is that it’s not just a one-product shop or one solution they’re getting. They’re solving more of the problem for that local business. Therefore, because they’re that agency of record, the switching cost is just that much higher.

George: You know, when I’m talking to sales reps, especially traditional media reps that have transitioned to digital, they’re saying, “Wow, there isn’t as much margin and I’m not able to make as much commission.” But when you start putting together solutions that have four, five, six, seven products, the margin starts to go up dramatically because you’re adding more value. You could charge more money because there’s more value there. And now it starts to be a compelling discussion around, “Yeah, I should be selling this to the customers.” The data doesn’t lie. It shows us that when we add more value, our churn goes down dramatically.

Jackie: Exactly. And so, it’s not only just a question of margin. It’s how many more months you’re gonna keep them, you know. Websites is a classic. I don’t wanna sell websites. There’s not a lot of margin in things like hosting. I mean, your website, to a lot of businesses, that’s their anchor. That’s sort of what they deem as “My website is my marketing,” right? So, what the data showed us is that even if you sell one more product, add one more product to your stack, that’ll increase retention by nearly 20%. So, do the math. Even if it’s not a lot of margin, of course, there’s gonna be hard costs in servicing that website. But if you can really create efficiencies, that can keep your clients around longer.


The Offense and the Defense

George: It’s interesting when I look back and…here I go. I’m gonna expose my age again, but I look back over my 30 years of selling solutions. It was way easier to take a customer that was advertising with me every 90 days. Four times a year, they would do some sort of a campaign to take that customer and convince them that if we invested more in their marketing a couple more times during the year, you were able to see that revenue number go up and also see the benefit for the customer go up, and there is more of a chance to move them towards months of recurring revenue. So, this is exactly what you’re talking about, is not only are we able to take those episodic customers that may just come to us every once in a while for an ad campaign and layer on other solutions to solve problems, but we dramatically reduce churn. What I say is when you get a customer and they run ad campaign with you and that thing ends, it’s anybody’s game. That customer’s wide open now. Whereas, if you get them on something that is recurring and it’s solving their problems, and sending them notifications, and it’s giving them value on a monthly basis, that’s where you mentioned earlier, it’s defensive as much as it is offensive. You’re protecting that client against other people that are phoning and they’re trying to sell them similar solutions.

Jackie: You know, George, you make a really good point. And the upsell really did have an impact on the retention of that customer. We also looked at when that upsell happened. So, we looked at, you know, did the upsell happen at the 3-month mark, the 6-month mark, the 9-month mark, or the 12-month mark? And we actually found that when a salesperson came back to revisit that customer at three months, it had the greatest impact on retention. So, it’s important to know that not only is it important that we sell customers what they need, but going back to revisit and to address that need…you know, say, they’ve been sold a reviews and reputation management product or an automated solution at a DIY level, well, making sure that they understand how to use that product and if it’s servicing their needs is crucial in not only retaining that customer but, of course, increasing the basket size or the share of wallet of that customer.

George: Well, and I’d like to say the DIY is actually lead gen. And if you’re doing it properly, you get the customer on DIY because that’s what they value the most, like, “Oh, I can do this myself,” and then, you follow-up after about 80 days. So, I don’t like waiting until the full 90 days. I like to come in just before the 90 days and say “Hey, I’ve been noticing that you haven’t really been engaging and there’s a few things you’ve been missing out on. Let’s go back over the value of what we brought to you and I may be able to look after this for you.” And a lot of times, the customer would go “Oh, thank God. I don’t have time. This is a huge time investment and yeah, like, you told me that under the gate that is was going to be, but I’ve tried to do this myself. But yeah, would you please just take this off my plate so I can do what I do best which is run my business?” It really isn’t rocket science to go back to the customer, to assess them again, and then to come back and either solve the original need with a larger solution or to move on to some other problem that they have identified. Maybe they are responding to their reviews and they’re saying, “Hey, I should start doing more social posting.” “We can help you with that,” or maybe “I’ve noticed that my website isn’t converting as many leads as it was supposed to.” “Okay, we can help you with that.”

So, it’s about…for some of our people listening on the phone, they’ve been around a yearly cadence. So, they’ve been around every six month-cadence of going back to the customer. That is not going to cut it in the 2019s and 2020s, and the decade beyond. The customer is looking for that trusted provider that’s going to be there when they need them to answer questions. And according to you and your data, which doesn’t lie, that need point is around the 90-day.


SaaS: Both a Beauty and a Beast

Jackie: Absolutely. And that’s really the difference with today. A lot more traditional means is that SaaS is a different beast. It’s completely different from the sell them on a one-year contract. They come back right before the year is up and sell them again. Inherently, in SaaS, it’s earning that customer month over month. The beauty is monthly recurring revenue. But really, you’re earning that customer and showing value month over month. And so, coming back…and it might be a converse charge. It might be that, you know, they bought the big package and they’re just not seeing value in it. But by visiting them after 90 days or 80 days, or early on in the relationship, you are making sure that you’re right-sizing and revisiting what that value is for that customer so that you prevent that churn.

George: So, what was the other thing that you found inside that study? Because there was a lot of learnings from that work that Stephanie did to analyze those, and I believe it was around 100,000 businesses that you analyzed the data on.

Jackie: The thing that jumped out at us was around engagement, actually. And working with the product division in our company, we understand engagement is very important. But really quantifying that and putting some parameters around what is engagement, what types of channels of engagement matter, the frequency of engagement, and then, of course, when that engagement happens. And so, number two is really around inviting customers to participate. We had a hypothesis going into this, you know? Does delivery model really matter? Is it really important that we give them DIY, Do-It-For-Me, Do-It-With-Me, Do-It-Yourself? Does that really matter? That’s just kind of more salesmanship in giving them a few options. And what we found is, by digging in, we looked at engagement on a few different levels. So engagement, first of all, we define as someone who actively logs into the software, someone who opens an email or a notification, and someone who is generally showing any type of engagement that we have access to.

Now, what we can’t see, of course, is any type of engagement that a salesperson has with a business. We’re only looking at system engagement that we have control over here at Vendasta. So, when I did this presentation at another conference, they said, you know, “There could be other pieces of engagement that we’re not even looking at that have impacts.” And that’s absolutely the case. But what we found is there are some local businesses that engage rarely. And what we found is…not surprisingly those had the highest level of churn and the lowest level of retention. And then, those that engage once per month, we found a slightly higher increase in retention. But really, where the rubber hits the road and where we see the largest impacts in the difference of engagement in retention is when they start to engage once or more per week. So, for those that engage once per week and those that engage daily, we had a huge, huge retention rate.

The ones that engaged daily and, of course, we don’t have 100,000 local businesses that engage daily. If we did, we would all be static. If we could get businesses, and that’s really…can we be valuable enough that they are engaging daily? Well, for those that saw value and did engage daily, we saw 85-plus percent retention rate over two years, which is just amazing. And so, what we concluded was that customers who engage early on in a relationship have a 20% increase in retention rate and customers who engage even once per week have a 30% higher retention rate than those that engage once per month.

George: We’re talking about the SaaS software business. And this shouldn’t really surprise anybody that is a scientist of SaaS is that engagement were somebody either logs in to your dashboard, opens a notification on email or by text. The other thing that can help with engagement though is a salesperson phoning the client and taking them through the report so that they can actually explain it. Because if you can get them to understand the value inside whatever reporting mechanism that you’re delivering early on in the relationship, you will see that engagement go up. So, you know, when we’re training reps, I always wanna say, “Yeah, we got some robots that can help you deliver the message. Whether it’s understood or not is still in your court as a rep because I believe you have to take them through it a few times so that the SMB, SME, whichever we’re using depending on our jurisdiction, so they really can understand what you were saying inside that report.”


Understanding the Data

Jackie: And something that we try hard, you know, in the product is to make it understandable and engaging. But something we say in our executive team here at Vendasta is data for data’s sake is gonna…you know, people are gonna drive their own conclusions. What you as a rep has to do is walk them through that, even a very first report so that they perceive the data in a way that you want them to perceive because they could come up with their own conclusions, and it could provide a negative experience. So getting off on the right foot by investing in proper onboarding, taking them through a proof of performance report or an email notification so they understand what’s happening is really the key to all of this.

George: We’ve been through the fact that if you sell more products at certain periods, you can reduce churn, and that also should be a strategy call not just in there to sell them more things, you’re in there to solve more of their problems. We’ve also talked about the fact that you just can’t be a point solution provider because the churn is off the charts if you just sell them one thing. What were some of the other findings? Have we hit all of the findings or is there something lurking under all that data that we need to know?

Jackie: The other one which, I mean, is no stranger to this podcast is really selling customers what they need. One of the data points we looked at was what happens when we use that snapshot report. We take a grade F, let’s say, in social. Can we look at those customers that were sold a social package versus those that were not? And what we found is that there was a meaningful difference between those that were sold of something that their snapshot report said they needed versus those that perhaps the reseller or the sales rep was comfortable with. And I know this is especially difficult when I’m helping launch sales teams, but sometimes, they tend to go with perhaps whatever the comp model is around or perhaps what they’re very comfortable selling. But really, what we wanna make sure is that we’re selling customers something that does address a problem in their digital journey or the customer journey that can make a difference in their business because, for the long term, it is really better off.

George: Now, that doesn’t mean that we shouldn’t package certain solutions because there is a common need set across various businesses. So, I like to…let’s use startups. Well, they’re gonna need listings because they’re invisible online, probably gonna need a website. They’re probably going to need build some sort of reputation by hearing from their early customers about their experiences. And with Jackie, I really wanna hit home on this, is you’re selling them what solves the challenge or problem that they have. So, I remember a couple of years ago, I was giving a presentation in Google in London and somebody yelled out of the crowd. They said, “What’s the best package that you see selling on the street?” And I’m, like, “The one the customer needs.” And that really is a change for some industries because, for some industries, they only sold one thing. We’re selling ad in the newspaper.

Now, the needs of the customers are larger than that, and we’ve been hearing about that in these episodes of the “Conquer Local” podcast around the digital marketing stack. We had just a scintillating two-episode edition with Christian Ward around data. I could listen to that guy for hours because his giving me all new scripting points around how important the data is that a local business person has. We also heard from Deepak Surana at OutboundEngine about how important email marketing was and collecting the email address of the customer. So, there’s just so much more that a business needs in this world of marketing because it’s hard. Marketing a local business is not easy in today’s day and age. So, we really appreciate the data that you and your team have been able to sift through, Jackie, and giving us these learnings as salespeople so that we know…you know, we all are time-starved. We know where to point the gun where we can help the most people and solve the problem. So, it’s great hearing this. And just in conclusion, any things you want to leave us to take away so that when we’re out on the street with our army of conquerors out there, that they’re remembering some of this information and how it can help them?

Jackie: You know, one of the things that has really stuck out to me in that is a quote by one of the guys at Crazy Egg. He said, “You know, in SaaS and really, in business in general, you don’t win by getting there first or having the best idea. You win by continually solving the problem better.” And so, just knowing that if you’re staying close to your customer, understanding deeply their needs, you will always…you know, it doesn’t matter what shiny new technology comes through. As long as you understand their business best and how to map those needs and identify unserved or unidentified needs, then hopefully, at the end of the day, you’re the one that takes the business.

George: Jackie, when are we gonna get you back full time?

Jackie: I haven’t even announced that internally, but I can say it’ll be soon enough. Times like these, it makes me really excited to get back to our partners and our customers and get back in it. I’m thrilled with our whole ecosystem. And I can tell you, having a kid is amazing, but we’ve got really something exciting here in this space we’re in and I can’t wait to be back.

George: It’s exciting giving you a couple of hours off from Lex time and I’m sure that Grandpa’s enjoying that grandparent time, and we’re looking forward to having you back on full-time basis around the Vendasta hallways and on planes traveling to visit our partners.

Jackie: Thanks for having me on the show.



George: Jackie Cook is the Chief Strategy Officer at the one and only Vendasta Technologies. Let’s go back over those takeaways from the podcast in that churn study. Number one, you wanna be out in front of your customer before 90 days trying to solve more problems because we found that 90 days and around the 6-month period, and around the 9-month period is where there were some cliffs when it came to churn. So, if we can get in the middle of that and solve more problems, we are able to keep that customer. You don’t wanna just be selling one thing. That’s a problem. Point solution providers. We need to add on other items to your stack, and that’s what this entire series has been about, is the digital marketing stack and becoming a trusted expert on those inflection points so that digital marketing stack and the customer journey for your SMB.

The other thing is we need to sell them what they need. But it’s important that we find out what the need is. And a lot of times, the local business person doesn’t even know. So, that’s why we need to use some of the tools at our avail to find some of those insights, and then to present to the customer, “Here’s what you need because I did the research for you.” So, the churn study, a very valuable piece, we have a link inside the “Conquer Local” podcast document where you can download it and you can have a look at it in all its glory. I always enjoy having guests from inside Vendasta because we live and breathe this stuff on an ongoing basis. So, thanks to Jackie Cook, our Chief Strategy Officer, for joining us.

The best place to reach out to us for the “Conquer Local” podcast is on my LinkedIn page, and I’m getting more and more people reaching out asking questions and giving advice around what we should cover in upcoming episodes. We appreciate that plus, bam, a brand new “Conquer Local” website. It’s been completely redesigned. It is encompassing the new Conquer Local Convention, which is happening the 10th of June through 13th of June, in San Diego. I’m not going to insert any Will Ferrell jokes at this time. Hey, we’re gonna be in San Diego. We’re gonna conquer the beach this year at “Conquer Local,” June 10th through 13th, and all the details are at our brand new website at conquerlocal.com. My name is George Leith. I’ll see you when I see you.