Andrew:
So Savvas, welcome to the show.

Savvas:

Hi Andrew, I'm really happy to be here.

Andrew:
Yes, it's fantastic to have you. I think we've been chatting for quite a while now, and your company, Viral Loops is really got some interesting use cases and stories to share with our audience. So, as you know the podcast now is really just trying to dig in and dive into different strategies, taken by companies of all sizes, and individuals from all of these companies in different roles, of what they really tried and tested when it comes to tackling churn and retention. So I’m going to hand it over to you Savvas, and ask, do you have any good interesting stories that you think our listeners would be interested in things that you've tried to tackle churn?

Savvas:

Yeah, sure. I think when we got started an interesting stories that were a bit late on getting into customer success. And, I think the actionable takeaway here that I want to share with you is that you need to invest in customer success early on. So, maybe it's different for other industries but for Viral Loops which is in the software service business we're a self service product, meaning that we are really low touch on onboarding, so we don't have a sales heavy model.

Savvas:

In the beginning we thought that, okay we're going to be, let's say the next blockchain for referral marketing. We thought that if you are a self serve product you don't need a lot of things on the onboarding side, and on taking care of your best customers, maybe with some hands on work. So in the beginning we were doing the support, all of the team, when we are five or six people, but ... And we were focusing on top of the funnel growth because we believed that we couldn't measure basically retention and churn if we have a very low volume of customers and actual users.

Savvas:

Because also I think it's point of note here that we're not a freemium product, so everybody needs to start paying us. And that means that we have lower volumes than freemium products to measure retention, engagement, and similar metrics. So, for us, it was game changing when we hired the first customer success person, and what we did in practice is that we didn't do any sophisticated customer success stuff because back then we didn't know anything about it. So, we decided to just email our customers and tell them that, okay, if they need something, we can hop on a call with them.

Savvas:

And for me, that was a huge mistake that we did in the beginning 'cause we didn't do that early on. So, that's the first take away from that story. Now an interesting learning here is that only a few people were responding to us, and we thought in the beginning that this is not working. But then after getting a little feedback from our users from some dynamic surveys that we run, and some calls that we manage actually to book with them is that told us, I have seen ... They told us that, "Okay, Savvas, I have seen that I can hop on a call with you. And for me, it's important that you care about us."

Savvas:

So, even when people didn't take the option to jump on a call with us, or to ask for help, or for some consulting from us, they liked the idea, and this is something that impacted churn in a very good way. So that was very good for us.

Andrew:
So, just the fact of saying that you're around and that you care, you saw an increase there?

Savvas:

Yeah, exactly. And then, what we tried to do a few months later is that ... because in the beginning we did that only for customers that were from a specific plan, and above. Let's say, the higher value customers. But in our company, we have higher churn in the lower plans. So, our pricing starts from $49 per month, which is basically with less features and for smaller companies, and our churn there is much higher.

Savvas:

So, we thought in the beginning, okay why don't we charge for customer success call. So if you want for example, some help, or some ... not support, I mean how you can leverage the tool better, and you want let's say, a one on one session, you have to pay for it. So, we ran an experiment asking people to pay $49 on top of their subscription once off to hop on an one on one call. And we did that through calendly, so it was really easy, and really fast to run this experiment.

Savvas:

But then we noticed that nobody wanted to do that, and that was something that didn't work. And, after talking with customers, they told us, "Okay, I don't care to pay for that, I think that you need to help me either way." And that was interesting, because we are a software company. They have in their mind that we are a software company for small to medium businesses, so they don't need to pay something more for consulting, or for some coaching.

Andrew:
Was your 49 segmented? Was it for your lower traffic, I mean your lower plan sites, or was it the same for everyone, the 49 consulting fee?

Savvas:

So, we targeted only the first plan that we have, so the people that are on the first plan, starting from $49. We have a lot of customers on that segment, but we have the highest churn there. And, the consulting fee was just once off for these customers only.

Andrew:
So yeah, when did you actually take a step back to the very beginning? So, you mentioned okay you realized at some point that you needed customer success. I wanna dig into a little bit of what was the aha moment for you that said, okay we actually as a team now, we need to focus on this. What were some of the indicators that led you to go down this path?

Savvas:

Yeah, so for us, we did wrong two things. So, the one is that we didn't invest in customer success early on, and the other thing is that we didn't nail activation as much as we needed. And why I'm telling that, is that, so in Viral Loops we have different templates, so different campaign template. Imagine that you can extrapolate that in another tool, you have multiple options. So, different businesses have different options in your tool. And, we identified that a lot of customers that we canceling, the reason was not that they didn't get what they expected from our tool because the tool didn't do the job right, but the reason is that they have chosen the wrong template. So, they were using our tool not in appropriate way that can help their business.

Savvas:

And, if you don't have ... So there you have two options, to do the reactive job which is a customer success, I mean, the bad customer success approach. And, you can do also the proactive job which means that you have to nail activation, and include in your customer success job role that you need to onboard also customers. So for us, the trigger was that we saw that churn, and we identified that this churn was coming from people that they didn't use our platform as they should. So, that was the main trigger.

Andrew:
Yeah. Very interesting, and just to make it a little bit even more actionable, how did you figure this out at all? What sort of process did you go into to understand that this was the main reason? Was it looking at qualitative metrics? Did you speak to customers? What led you to this conclusion that people were churning because they hadn't set up the right campaign?

Savvas:

Yeah, so in action what we do, we have a spreadsheet. Each month, we can see all the customers that have canceled their subscription, what business they're into, for example if they're in eCommerce, if they're a publisher, a blog, a social service company. We can see also which campaign template they chose, the performance also. So, we have some benchmarks. We say for example, that if they have a viral factor above that number, it's a successful campaign, so they should see the value of the platform. And then, we have the reason of canceling.

Savvas:

So, we took these spreads, and we have that updated on a weekly basis in that spreadsheet. So it's a combination of quantitative data with qualitative. And then, we digged into these metrics, and we saw that a lot of customers that they were churning, for example eCommerce, they were using their wrong campaign templates. So, this is how we did it in action, through a spreadsheet. So, what people can do is that, for example if they're using tool like chart model, or baremetricks, or something else to track churn, they can export this data and those show combined qualitative data through a survey, or if they ask them when somebody cancels. And then, they can see what happens. So, this is the exact process that we follow.

Andrew:
Very interesting. And, your exit survey, is it something that's built into the process of the business into the app, or it's something that you follow up with customers afterwards?

Savvas:

Yeah, it's something that people can fill in during the cancellation process. Because when we did that, and we ask people after they have canceled, they didn't bother to answer us. 'Cause you know, they just canceled, they don't care a week later to tell you why. Only if they're really good people, or if they are people from our own industry that want to help us. So, I would recommend to ask that during the cancellation process definitely.

Andrew:
Cool. Yeah, so you mentioned that now that okay, you came to the a-ha moment, you needed to set up a customer success team. What then was the motivations and reasons for you to actually start hiring, and then actually start with calls themselves, by trying to set up calls as your primary focus to begin with?

Savvas:

Yeah. We wanted to understand why people were using our platform their own way, and I believe that ... You can see all the quantitative data, but especially when you're in the early stage, you need to talk to people as much as you can because it's the only way to understand what's going wrong. So, what I even did, I traveled personally to Los Angeles because we have one of the fastest growing marketing agencies there that is relished across all of their customers, and I sat down with their Head of Campaigns, and saw how they use our platform with their customers.

Savvas:

So, I think ... I don't know if this is the best way, but for us, I think it works because you understand better how people use your product. I also know for example, another big company in the Netherlands that have a Slack group with the 50 best customers, and they ask them all the time, they take feedback, and they try to understand how people, and how these customers actually use their product.

Andrew:
Yeah, sort of like a customer advisory board. I think First Round Capital had a really good blog post on the topic of having a really good, close knitted group of customers that you can always lean on, and really for feedback. So, you mentioned then you decided to do your first hire in CS, what was sort of your process around there? How did you define what you were really looking for, and what success would look like in this role being that you're still in an early stage, you just realized now you needed customer success? How did you go about writing that job role and finding the candidate?

Savvas:

Yeah, so we were a bit lucky on that side, because that was the early days. So, what we did is that we had one person in customer support, and we had hired them from another company. Actually it was Helena, and she was running support. So, what we decided to do back then, is that we decided to move her to customer success, and then take somebody else for the customer support. So, we hired junior people, a junior person to run customer support, and Helena started running customer success.

Andrew:
Well it's a very interesting transition as well. And, I guess it probably helped a lot speed up the process not having to deal with the knowledge gap, and teaching somebody new how the product works, and what success looks like.

Savvas:

Yeah, exactly.

Andrew:
Cool, so ... Sorry I cut you there.

Savvas:

Yeah, so another interesting experiment came to my mind because this had a huge impact on our lifetime value, and of course our retention. So, something else that we were a bit late, and I would recommend to do that since the first day, is that we didn't have any annual plans in the beginning because we assume that nobody is gonna buy them. Yeah, so when we started we didn't have them. And when we decided to add our annual plans, we felt, "Okay, let's do what most other companies do out there, and add the discount." But if you think about it, everybody does it, and I think that people want more. And, especially in our case, one of the main lessons learned during the three years that Viral Loops runs is that we're a marketing platform, okay we're specialized in referral marketing, but we're in the marketing space, and people they don't need just the platform but they need all the marketing expertise from us.

Savvas:

So, what we're trying to do is that we're trying to put all the marketing expertise into the platform for example. And when we added the annual plans, in the beginning, we added the discount, 20%, 25%. We experimented a bit with the discounts. It worked well, but what worked much much better is that when we added the strategy call, the strategy session and the marketing coaching as we call it. What we do actually is that whenever somebody subscribes to an annual plan, we help them onboard actually to Viral Loops, but not just from a technical side of view, but we give them an initial strategy call to help them set up and choose the right template, and we give them marketing consulting in general around word of mouth, referrals, and even their business in general because we're coming from the marketing space.

Savvas:

And then, we have a specific timeframe, we have more calls. We track their performance, and then we coach them actually on how to leverage our platform, and also leverage our platform related to the other marketing campaigns, and the other marketing tools that they use. So, actually a bit of something like service, help them actually help us convert more people to our annual plans.

Andrew:
Very interesting. And so, you removed discounts, you switched to offering more of a service base as well, on top of the added benefits. What sort of conversion rates were you seeing before and after with these experiments? And then, if you don't mind, what is your breakdown look like today of annual versus monthly?

Savvas:

Yeah, so at the moment, the breakdown is that almost ... Let's say, the last three months, around I think 20%, 25% basically. So, before the coaching and the strategy calls, we had just 10 - 15% that they were going to annual plans. But now, it's around 25%. Because at the moment, we have-

Andrew:‍

Right.

Savvas:

We have a discount, but we also have the strategy calls, and we also have an expansion mechanism. So, one of the main focuses for customers that stay after 3 months is not just to keep them, but to turn them into an annual plan, or a six month plan. So, we even have a six month plan.

Andrew:

And how are you setting that up then as well? So, for existing customers, sign up monthly, what does a typical process look like then for that expansion, or that upsell to try get them to yearly?

Savvas:

So, the first thing is that we need to make sure that ... We also have another main characteristic as a platform. Some of our campaign templates have a pause behavior. So, because we also have some giveaways that people can run, we don't have just the ambassador programs and the referral programs. And that means that some people may choose, let's say giveaway. They can run for two or three months, and then they may cancel their subscription even if they're happy with the product.

Savvas:

So, for the expansions, we do two things. We focus on those that use the long term campaigns as we call them. Like referral marketing campaigns, Dropbox style, Airbnb style, and this kind of stuff. We ensure that they're happy with the platform, and they're successful. So, we try first to make them successful, and then what we do is that we send them an email, personal mail from customer success, so we have a specific segment actually in intercom, and whenever somebody meets some specific criteria, we want to meet both these criteria. I mean, happiness and success, so this is when we trigger the expansion flow.

Savvas:

And, for people that use our platform for short term campaigns, like giveaways, we don't focus on actually upselling them a longer plan like a six month or a yearly, but what we do is that we try to upsell them to a more long term template like referral programs, and then they get into the flow for a move to month expansion.

Andrew:

Interesting. I like the fact that you've combined the usage and satisfaction. Can you talk us through a little bit about how you're setting that up, and how you're measuring the satisfaction then? So, you mentioned previously the viral K factor comes into consideration, do you wanna walk us through a little bit on how that looks on your side?

Savvas:

Sure. So, for us especially the satisfaction, we measure it not very sophisticated, at least for the last six months. But now we're doing a bit of a revamp. So, what we do is that, all of ... The first thing that we look, is how much time it took them to launch Viral Loops, and we can do that from the activation timeframe. So, for us, when a customer gets a campaign live, that means he's an activated customer even if he hasn't paid yet. So, that's the first thing, how much time it took them.

Savvas:

The second thing is that we look into the intercom conversations. For example, if they're happy, if they rated us that they're not happy, because you have an intercom description. And, basically what we do ... We just measure these two things for happiness. And I'll tell you what we're doing next. And for satisfaction, we have some internal KPIs, so for example, we have specific benchmarks for eCommerce, for social service businesses, and for blogs, and depending on the number of subscribers, or customers, or sales that we get to you on top of your current marketing campaigns.

Savvas:

We measure also the K factor, and this is basically how much value we give to our customers on top, and when people meet these quantitative criteria, which is the success, what happens is they get into the segment. And, before sending any mail, our customer success person takes a look on the conversation to see if these customers are happy or not. And then, depending on this qualitative data, what we do is that we just send an email directly for expanding the customer, or if we're not sure if they're happy yet, we just send them an email asking if they're happy with the service, what else we can do for them? And if the conversation starts, and they are happy, then we approve them for expansion.

Savvas:

So, we don't do very hard sell for expanding our customers 'cause we want first to make sure that they're happy, and successful.

Andrew:

Yeah, that's excellent. I also like the combination of automation, as well as the hands on touch from the CS. Very interesting. And so, this has been from the sounds of it, super successful for you guys on the yearly side. Was there anything else that you tried, or experimented with to increase it, or this has been the majority of those actions, experiments run around it? And my question is, is there anything you tried that didn't work?

Savvas:

Yeah, so something that didn't work, and we stopped it, was webinars. So, before starting the coaching, and the one on one calls, we thought it were a self service product, and we know from other companies that webinars work for them. Not just for user acquisition, but also for retaining the customers. And, despite the fact that we have quite big of a mail list, we have a decent amount of traffic on our website, 3000 websites run on Viral Loops, so we have an audience and customers. Only very very few people were showing up in the webinar. Maybe it was that we didn't invest it a lot, so we were doing one live webinar every week, then we did it on a bi-weekly basis. But for us, it didn't work, so we didn't see any results, and we decided to kill it.

Andrew:

And by saying it didn't work, can you be a little bit specific? What sort of numbers were you seeing?

Savvas:

Yeah, so actually we couldn't measure the actual customers that were watching the webinar because for example, you may see that ... We were doing that through Zoom, and we were ... Let's say we had around 30 or 40 people joining the webinar, and then we had maybe 1000 views on Facebook Live because we were doing a live stream directly, but we couldn't measure actually how many customers watched this webinar, and if we help the actual customers that we have. Because the numbers were too small, especially from Facebook Live, we didn't know anything.

Savvas:

So, we thought, okay let's give them a one on one call if they want to, because for example for us, the webinar is something that takes too much time. To record it, to be there for an hour, to promote it, it wasn't something that worked for us.

Andrew:

So that saved time. You decided then to ditch webinars, and switch focus again. Did that clearly go back into what we discussed previously, or was there anything else that you tried, and experimented with over and above webinars?

Savvas:

Yeah, so we stopped with the webinar. Something else for example that we did afterwards, and again it didn't work ... So, we've done a lot of things that didn't work. Yeah, so something else that we did ... We experimented a lot with taking feedback, we still do actually. And, I think that one of the main things that we have decide is that we'll do that forever to try actually to take as much actionable feedback as we can. So, what we did is that, we were sending quite a few of surveys after somebody was not happy with the product, or for example after they canceled their subscription, and we had a big survey so it was quite long. We were asking a lot of questions, and we were also giving a $25 Amazon gift card. And from that, we didn't see any results.

Savvas:

So, then what we did as I mentioned in the beginning, we put the feedback into the product, during the cancellation process. So we killed this long survey. And something else that works is that we prefer actually to ask people also when they upgrade, or when they run a campaign. So, we use short and dynamic surveys based on specific triggers. So, based for example on the viral factor that they have, or if they had bad conversation with our support, and we try actually to measure, to= quantify actually the feedback, and identify triggers for churn. So, surveys for us it's another thing that we do a lot of testing.

Andrew:

Very cool. So, I wanna just take a step back then again quickly, and zoom out, and look at Viral Loops a little bit from the outside, and just get some input from you as well. So, maybe we could just start with, what's the elevator pitch for Viral Loops? I mean, you've touched on it a bit during the last half an hour, but maybe you just wanna let the audience know exactly what you do, and the service that you offer.

Savvas:

Sure thing, yeah. So, in Viral Loops, we help eCommerce businesses, and small businesses, medium businesses, and startups capture more customers through referral marketing, and word of mouth sales. So, we offer actually predefined campaign templates inspired by companies like Dropbox, Airbnb, [inaudible 00:30:52], Robinhood, and others, that companies can use to grow their business. So, we help you with [inaudible 00:31:01] generation, growing your email list, getting new customers from referrals, and at the moment also we're hopping into the Facebook Messenger platform. Because a lot of people get Messenger subscribers, so you can run actually the Viral Loops campaigns through Facebook Messenger bots. So, this is what we do. And, we focus at the moment on the eCommerce section.

Andrew:

Okay, cool. And, you mentioned that the team, and the company has been around for three years now. How big is the team, where are you guys based, just a little bit about the numbers?

Savvas:

Sure. Yeah, so we started almost three years ago, in February of 2016. We were for the six month, in private beta, and then launched publicly. At the moment, we're 20 people. We're a remote friendly company, most of our product engineering is based in Greece, and we also have our marketing and sales in the U.S. And basically, people work from their home. We have also an office in Athens, but a lot of people from our team works remotely.

Andrew:

Very cool. And, you touched a little bit on, I think, the sites, and how many customers you had earlier, but maybe you just wanna talk us through a little bit about where you are in your growth stage now as a company.

Savvas:

Yeah, sure. So, at the moment we have 700 customers that use Viral Loops across 3000 websites, maybe it's 3500. We grow quite fast for the last year, so we struggled a bit when we started the really early stage, and the early days. And at the moment, we're focusing on eCommerce, and especially on Shopify stores. We just launched a new ... not campaign template, basically a new site product for Shopify, which is basically a more opinionated way of running word of mouth campaigns for your eCommerce store.

Andrew:

Awesome, congrats. Yeah, so and then, you wanna talk us a little bit about internally, and especially with churn and retention. How do you go about tackling churn and retention as a company? So, we touched this a little bit briefly on the CS strategies, but I'm talking about more from a high level, looking at reporting, is there a specific team responsible for the metrics for churn, for retention? Is it something that's run by everyone? Maybe you wanna talk about how you go as a company to tackling it.

Savvas:

Yeah, sure. So, we're not a very big team, so how we work is that we have a growth team, and the focus that the growth team has changes from time to time. Because when we tried in the beginning to do a lot things in parallel, and hit several steps of the funnel, like activation, acquisition, retention, it didn't work well for us. So, what we do actually is that customer success, and customer support focus on customer retention. So, we have some lagging and some leading indicators. For us, use churn, and especially revenue churn is what we focus on, and this is the lagging metric because we know that this takes time to have a direct impact.

Savvas:

And then, we have a model that breaks down these KPIs, and we have the leading indicators that we measure the customer success. For example, from expansion, how many bugs we found, because we know that the main thing that affects retention is the quality of our product. So, customer success and support always focus on retention and churn. And then, when we're talking about the growth team, what we do is that for around three months, we focused on activation which is actually directly connected to the short term retention, because we have the issue as I mentioned before that people were using our platform the wrong way basically. So, we focused on activation and the first time user experience in order to tackle retention.

Savvas:

So, actually we designed the whole onboarding, and I think for us another interesting learning that I can add to that is that when we tried to do marginal improvements in our onboarding, we didn't see any big impact so we redesigned the whole onboarding process when we worked on the activation stage of the funnel, and we saw a big increase on the short term retention which basically brought the whole retention curve up.

Andrew:

Very cool

Savvas:

Yeah, yeah, exactly. And, from a reporting side of view, as [inaudible 00:36:47] lagging and the leading metrics, growth team reports on a weekly basis on the customer churn together with the success. And, what we're doing at the moment, in order to tackle churn from a higher level, is that we try actually to align all departments which I believe it's something really important. So, in the beginning as a top of funnel team, one other main KPIs of the team was the sign ups, the free trials. And then, for example for the sales team, was okay to bring big customers, and then for the success team, to expand them, to keep them, and all the rest.

Savvas:

So, in order to connect all of these functions, and align them to tackling retention and churn, what we did is that for example, we started measuring the top of funnel team on activated sign ups, and high quality sign ups. So, we have a qualification process and system when somebody signs up. So, that's one thing that we did with TOFU team. Now, with the sales team, is that we connected the quarterly targets only with multi month customers. So, if for example, they bring onboard a customer that pays for one month, we don't count it in their targets, so they focus only on getting multi month customers. And then, success takes all of these people in order to expand them.

Savvas:

So, it's easier also for customer success and the customer onboarding specialist actually keep these customers, and upsell them. So, this is how we try to connect the whole business, all the business parts related to retention.
Andrew: Very nice. So, each team has their own individual goals, but it's all to meet the companies ultimate goal of retaining customers for longer.

Savvas:

Yeah, exactly.

Andrew:

You touched a little bit about that you look at churn from a customer retention perspective, and from a revenue [inaudible 00:39:06]. Maybe you wanna walk us through what that looks like at the moment for you, and before and after the experimentation that we've discussed today.

Savvas:

Yeah, so what we're trying to do at the moment, because as I mentioned we especially in the beginning, we were pause SAAS, so a lot of our customers were using the platform for just three or four months, and then they were pausing, and then they were reactivating after two or three months, but as you can imagine, these affects growth a lot, and we still count it as churn. So, in the beginning we had a very high revenue churn, and lower user churn. So, one of the main goals that we had, is okay how we can keep them to the same level, actually how we can decrease. Still revenue churn is higher than user churn for us, but now the difference is much lower because we focused for quite a few months on user churn, but that didn't seem to work very well for revenue churn which basically affects the whole growth care of your business.

Savvas:

Because for as the North Star metric as for almost every SAAS is the MRR that we hit every month. Yeah, so pretty much that's it right now. We focus more on revenue churn, so for example for our higher value customers, we try to avoid churn.

Andrew:

And, when you say revenue churn, are you talking about gross, or are you looking at net MRR?

Savvas:

No, at the moment, we look at gross.

Andrew:

All right, so because-

Savvas:

That's more negative.

Andrew:

Well, I mean, interesting you mentioned as well that you're a pause SAAS, meaning you see a lot of people pausing and then reactivating. So, I wondered if potentially maybe you're looking at net MRR as a result of considered it.

Savvas:

Yeah, maybe. Yeah, it's something that we're looking at all the time to improve it, and actually it's our main focus for ... I think that we'll work on that part forever to be honest, but at the moment, we're focusing a lot, so the whole company. And something else that I wanted to add, so if there is a company that has a sales team ... So, for us, we have an inbound sales team, we don't do any outbound because we have a very good top of funnel traffic, and we need to convert these people, so our sales team just talks to activated trialist, or to people that are high quality. So, something that helps a lot to make sure that your sales ... If we had our targets, the sales targets, for our sales people to just hit MRR, for example they could go for a customer, ask him to pay 300 or $500 a month, and then after two months, we could lose him.

Savvas:

But when we did the [inaudible 00:42:24] and focused on just the multi month, they realized that okay, I need to bring big customers to hit my target, but I also need to bring good customers, not just the customer that wants to run a giveaway for example for a month. So, for us, this is something that had a big impact on revenue churn, and how we decrease revenue churn.

Andrew:

Very nice. I like that you [inaudible 00:42:49] focus. And, I think with that, Savvas, thank you very very much for joining us today, it's really been interesting hearing what you've tried from customer success to experimenting with your yearly plans, and how the team operates. Wish you best of luck going forward, and hope to hear from you in the future of how you've tackled churn and increasing retention for your business. Thanks for joining.

Savvas:

Thank you so much, Andrew. It was amazing, and I can't wait actually to listen to the other podcast episodes because I want to learn quite a few things about it. So, I think it will be ... It's an amazing series, so I can't wait for the next ones.

Andrew:

Perfect. Thanks ever. Have a good day.

Savvas:
You too. Bye, man.

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