{"id":3682,"date":"2016-03-23T14:08:27","date_gmt":"2016-03-23T13:08:27","guid":{"rendered":"https:\/\/chartmogul.com\/blog\/?p=3682"},"modified":"2023-08-09T21:02:24","modified_gmt":"2023-08-09T19:02:24","slug":"berlin-saas-meetup-retention","status":"publish","type":"post","link":"https:\/\/chartmogul.com\/blog\/berlin-saas-meetup-retention\/","title":{"rendered":"Growth through retention? Berlin SaaS leaders weigh in"},"content":{"rendered":"

On March 21, a variety of Berliner SaaS folks came together for the first Berlin SaaS Meetup, hosted by SaaScribe<\/a> and SaaStock<\/a>, and sponsored by Point Nine Capital<\/a>. We\u2019d say it was a success!<\/p>\n

Along with plenty of time for networking and some tasty snacks, the meetup featured a panel discussion with three local Berlin founders:<\/p>\n

\u00a0\"PerFr\"Per Fragemann<\/strong> of Small Improvements<\/a><\/p>\n\n\n

\"Nicklas\"Niklas Jansen<\/strong> of Blinkist<\/a><\/p>\n\n\n

\"NickF\"<\/a>ChartMogul\u2019s very own Nick Franklin<\/strong><\/p>\n\n\n

\"Pawel-Chudzinski\"<\/a>and Point Nine Capital co-founder Pawl Chudzinski<\/strong>, who led with questions and later opened the floor to the audience.<\/p>\n\n\n

Below is a recap of the panel discussion on the meetup\u2019s theme: Growth through retention<\/strong>. Why is it important? What are the challenges? How will you improve it? Plenty nuggets of wisdom herein, as well as cool insight into local Berlin startups and what\u2019s on the mind of the Berlin SaaS community.<\/p>\n

\n\n

\u201cInvestors like retention, but they like growth more.\u201d – Niklas Jansen<\/p><\/blockquote>\n

But how are the two related?<\/p>\n

\u201cAt some point, expansion business is more lucrative than new business,\u201d said Nick Franklin. \u201c50,000 customers each upgrading a little bit is worth more, and a lot easier to attain, than 50,000 brand new customers.\u201d<\/p><\/blockquote>\n

The key to getting to that point, where expansion biz is your growth engine, is to retain your customers and let that customer base compound over time. This is growth through retention.<\/strong><\/p>\n

Though customer acquisition is usually the first thing on an early startup\u2019s agenda, the founders agreed that retention becomes more and more critical as your customer count rises.<\/p>\n

\u201cRetention drives everything,\u201d said Jansen.<\/p><\/blockquote>\n

Including customer lifetime value and word-of-mouth. In fact, Jansen shared that at Blinkist, a 10% improvement in retention improved their LTV by 30%!<\/strong> That is huge! (If you want to brush up on your LTV knowledge, check out the Ultimate Guide to\u00a0SaaS Customer LTV<\/a>)<\/em><\/p>\n

The founders monitor retention slightly differently. Small Improvements and Blinkist look mostly at Customer # churn, while ChartMogul follows revenue churn. But when it comes to retention challenges and solutions, there was a lot of commonality. Let’s dive in.<\/p>\n

\"SaaS<\/p>\n

What are some retention-related challenges that you\u2019ve faced?<\/h1>\n

Incomplete customer onboarding<\/h2>\n

A huge, and common, cause of churn. It could be a customer who is fully signed up on a paid plan and just didn\u2019t onboard properly \u2014 who doesn\u2019t take full advantage of the product and therefore doesn\u2019t see its full value \u2014 or someone on a trial plan who has stalled out halfway through. Though both are customer success issues, each scenario requires its own approach.<\/p>\n

When asked if there are any early signals that a customer would churn, Jansen noted that for Blinkist, the longer the period between signup and conversion, the higher the chances that customer would churn pretty quickly. This is motivation to shorten the conversion rate and reengage stalled users. (For some quick strategies for how to tackle mid-trial stall-outs, check out our SaaS Q&A<\/a>.)<\/em><\/p>\n

Tracking activity adequately<\/h2>\n

So that you can learn actionable things from it. This includes both customer activity and in-house activity.<\/p>\n

Customer activity here is user activity in the app. Blinkist used Customer Activity Rate, which was basically \u201c# of customers who were active in a certain period of time \/ total # of customers\u201d. But without segmentation \u2014 without dialing down to see what kind of customer was active, or which activity was performed, or how frequently \u2014 it can be hard to come away with a strategy for improving your customers\u2019 engagement with the product. And in turn improving your retention.<\/p>\n

In-house tracking consists of any efforts to stimulate user activity \u2014 to proactively reengage customers. At Blinkist, they tried small experiments to reach out to and reengage their customers.<\/p>\n

\u201cThe problem was we didn\u2019t pay attention to channel versus tactic,\u201d Jansen said.<\/p><\/blockquote>\n

And members of the Blinkist team performed these experiments in silos. Email, in-app notifications, push notifications\u2026 all worth trying, but without tracking their effectiveness and coordinating across internal teams, the experiments weren\u2019t as valuable as they could have been.<\/p>\n

The product has its own timeline.<\/h2>\n

\u201cThe product solves almost everything.\u201d – Nick Franklin<\/p><\/blockquote>\n

Sometimes improving retention is just a matter of improving the product. But the rate at which you do this can be a blocker. Niklas Jansen explained the slow feedback loop of product changes at Blinkist: waiting to see how product improvements actually impact the customer, their satisfaction, and then overall retention. It can take a while. You want to move faster, but you need to improve slowly \u2014 make incremental changes to the product \u2014 so as not to confuse your existing customer base.<\/p>\n

\u201cSometimes there\u2019s a conflict of working on the product to serve a market that\u2019s emerging, that will be ready two years from now, and focusing on keeping an existing customer base.\u201d – Per Fragemann<\/p><\/blockquote>\n

Every SaaS company wants to keep up with innovation and evolve their product. So in this light, the conflict can become a question of resources. Where do you direct your dev team? Do you invest in engineering or customer success?<\/p>\n

Some challenges can be inherent to your customer\u2019s industry.<\/h2>\n

For example, Small Improvements sells software to HR professionals within large companies. HR teams can have high turnover \u2014 which means Small Improvements\u2019 point-of-contact, the decision maker who bought their product, leaves the customer company. And the replacement, unfamiliar with SI\u2019s product, often has their own ideas about what software to use.<\/p>\n

\"SaaS
Thanks to Innovation Nest VC (@innovationnest) for tweeting this live-action iPhone shot of the esteemed panel.<\/figcaption><\/figure>\n

What are your plans for managing retention moving forward?<\/h1>\n

Focusing on high-value customers<\/h2>\n

When it comes to managing retention proactively, it makes sense to focus on high-value customers. Both Franklin and Fragemann mentioned this. Fragemann talked about creating a \u201cVIP group\u201d for key customers. The strategy here would be manually reaching out to them, sharing product roadmaps sooner and betas more aggressively, essentially nurturing a close relationship where the customer feels full buy-in with the product. Of course this isn\u2019t scalable with all customers or feasible for all companies \u2014 where it works, it\u2019s a strategy for only the customers who would have the greatest negative impact on revenue churn.<\/em><\/p>\n

Specializing Customer Success<\/h2>\n

Understand the primary user of your product and their role in their company, and tailor your customer success to them. Nick explained how ChartMogul customers may see more value if their own developers get involved and use the product. So ChartMogul is looking to hire a customer success team member for engineers, and also planning to create customer education (libraries, tutorials, etc.) specifically for developers.<\/p>\n

Using data to predict churn<\/h2>\n

Blinkist wants to use data from their product to inform user experience, improve their conversion funnel, and predict churn.<\/p>\n

\u201cSo far [when customers cancel] we know what happened, and we sometimes know why it happened — and now we want to know when it\u2019s going to happen,\u201d said Jansen.<\/p><\/blockquote>\n

\"Panel<\/a><\/p>\n

Spin-off discussions: Questions from the audience resulted in some cool takeaways<\/h1>\n

Customer acquisition<\/h2>\n

How did you go from 0 customers to your first 50?<\/strong><\/p>\n