CHURN FM
CHURN FM is the podcast for subscription economy pros. Every Wednesday we hear how the world’s fastest growing companies are tackling churn and using retention & engagement to fuel their growth.
CHURN FM
E264 | Sales-Led vs. Product-Led: The Key Differences Tackling Churn with eWebinar's CEO Melissa Kwan
Today on the show, we have Melissa Kwan, CEO and Co-Founder of eWebinar.
In this episode, Melissa shares her experience building and scaling eWebinar, a product-led company, and contrasts it with her previous sales-led ventures.
We dive into the key differences between sales-led and product-led growth models, specifically how each approach tackles churn and retention.
Melissa also opens up about the challenges of bootstrapping a SaaS company, the role of automation in scaling, and how focusing on lifestyle has shaped her business decisions.
Mentioned Resources
Churn FM is sponsored by Vitally, the all-in-one Customer Success Platform.
[00:00:00] Melissa Kwan: There's this heart sinking feeling where you're like, oh, I really messed up on this product because I didn't retain them. But not all churn is fixable. Everybody buys and uses this for their own reason, on their own cycles. You can't control people churning and not having a succession plan. You can only, I think, do your best as a product and as a CS team. But what that means is don't get so emotional. It's just the business.
[00:00:00] Andrew Michael: This is Churn.FM, the podcast for subscription economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.
[00:00:49] VO: How do you build a habit forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely bootstrapped, profitable and growing.
[00:01:02] Andrew Michael: Strategies, tactics and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode.
[00:01:12] Andrew Michael: Hey, Melissa. Welcome to the show.
[00:01:14] Melissa Kwan: Thanks so much for having me, Andrew.
[00:01:16] Andrew Michael: It's great to have you. For the listeners, Melissa is the CEO and co-founder of eWebinar, a platform that allows you to automate hundreds of onboarding and training webinars without losing your personal touch. Prior to eWebinar, Melissa founded Spacio, the industry's number one open house lead generation platform, which was acquired by HomeSpotter in 2019. Melissa is also the host of ProfitLed podcast, where Melissa and her CEO are documenting the process, bootstrapping eWebinar to 1 million ARR and beyond. So my first question for you, Melissa, is how did you go from building software for real estate agents to founding a company around webinars?
[00:01:54] Melissa Kwan: I mean, the short answer is don't build software for real estate agents. Don't ever do it again. I did it twice over 10 years. But my previous company was an enterprise SaaS company. So every time we sign up a new customer, which is a brokerage or a franchise, we would have to train the agents on using the product so we could continue to get the subscription.
[00:02:15] Melissa Kwan: So because we were always bootstrapped, I was the one that was doing all the demos, all the training onboarding when we get a new customer. But because these agents were independent contractors, nobody would actually show up to the training. And then I have to do it again and again and again, because if nobody uses it, we don't get the money every single month.
[00:02:34] Melissa Kwan: So I lived that pain of doing the exact same training, onboarding, demo over and over. At my peak, I think I was doing eight of them back to back. And I was already nomading at the time. So not only was I doing these back to back, I was actually doing them in opposite time zones of my customers. And that was really infringing on the life that I wanted to live just like socially, right?
[00:02:57] Melissa Kwan: So I always envisioned this perfect product that would do my job for me when I could just go and live my life. And so after I sold the previous company, this was the problem that just kept me up at night. I couldn't stop thinking about it. Like there were products out there, but it didn't do exactly what I wanted it to do.
[00:03:17] Melissa Kwan: So one day I just asked myself, like how would I feel if someone else did this? Because I'd been thinking about it obsessively for so long. And that was the day that I incorporated the eWebinar to solve this exact problem.
[00:03:29] Andrew Michael: Nice. I love the genesis and origin story. And it comes from a few different angles, like one, being experienced, two being like the way you wanted to live your life as well. And I love that being like a digital nomad, yourself not traveling around the world.
[00:03:44] Andrew Michael: You touched on a few things and I want to go into, the first thing you said was like, don't ever build software for real estate agents. I'm just keen to hear why you feel like you've been burnt in this space.
[00:03:53] Melissa Kwan: Well, on the topic of this show, I can't imagine another industry where churn is higher. Not just software, people are churning from their jobs. So they can't continue to buy your software. People you train that belong to a company can't continue to use it if they're leaving that job.
[00::04:13] Melissa Kwan: I think the retention of a real estate agent is something like, I don't know, I think like 95% of agents leave in the first two years or, like something crazy like that. So I mean, the barrier to entry, of course, to that industry is very low because anybody can get a license, they can sell one house, but what about the second and the third and the 10th just to kind of make a living, right?
[00:04:33] Melissa Kwan: So also, traditionally, this is an industry that's just laggards of technology. They don't spend money to buy productivity software or even like lead gen software. They buy leads from Zillow or whatnot, and they take clients out to dinner. So, hindsight 2020. Obviously, there are a lot of things that weren't easy for a bootstrap company. This is actually when somebody comes to me now and say, hey, I have an idea for real estate. What do you think about this? This is the conversation I have with them is like, are you ready to sell to an audience that traditionally are laggards and also don't spend money on technology?
[00:05:07] Andrew Michael: And are churning constantly because they're swapping jobs. But you did it twice. You didn't do it once. You said you started two companies. So like, what took you back into it? You still knew all the challenges and you went for it again the second time. Yeah, it's definitely interesting in the context of churn and retention. And this is definitely something we talk about when it comes to like the customer champion churning and living.
[00:05:29] Andrew Michael: I think, if you think like the average tenure in software is around 36 months. In Silicon Valley, it's more like 18 to 24 months. So you always have this like, even in software but maybe not to the same degree and impact it has when it comes to real estate because I definitely see, like how that is a fast moving industry and people are constantly moving in and out of different roles and different franchises. Very nice.
[00:05:49] Andrew Michael: And then so motivated you afterwards and like you were constantly doing these demos, you were like no shows, getting tired of repetitive nature of it. You've started your webinars now. How's that going? Obviously you have the podcast and you're sharing transparently about that, but maybe get a little bit of an update of like, where you at, what stage the company at, and being bootstrapped?
[00:06:12] Melissa Kwan: Yeah. So we've been around for five years. It took about a year and a half to build the product kind of in a silo before the first person saw it. So as far as the world knows, we've been around for three and a half years, we just hit break even with everybody getting paid like market salary. Not US market salary, but like a good market salary about, I would say like nine months ago. So it was definitely a long journey.
[00:06:36] Andrew Michael: Congrats.
[00:06:37] Melissa Kwan: Thank you. I didn't start paying myself until then. So of course, because I had a previous sale, I was able to live off that. But it's, you know, nothing is super easy. It took us about 36 months to hit a million ARR. So the podcast I'm doing to document our journey to a million is really about the first 36 months of eWebinar. Yeah. And we're just under 2 million now. Bootstrapped. Everybody is contracted. Right?
[00:07:05] Melissa Kwan: Including our CEO, including our CTO. Like I learned from my previous businesses that I was a very, very terrible manager, but I love creating. So I wanted to start a company where everyone's a contractor, everybody lives abroad. But as a bootstrap company, it's… we wouldn't be able to survive and build this company if we couldn't have contractors anywhere we can actually afford.
[00:07:31] Melissa Kwan: So now our philosophy is to be able to pay people more than in theory what they're worth on the market in that country so that we can retain them, so that they don't churn, right? As a team. Yeah. So we are growing slowly, but surely I'm constantly surprised at how we've never had a down month. I think we had like one negative month, but it was like negative 0.5% or something like that.
[00:08:02] Melissa Kwan: And I think that's a testament, not just to the product, but also to a SaaS company. And specifically a self-serve SaaS, because our product starts at a hundred bucks a month and it goes up from there. So that, you know, when a couple of people churn, or even if our largest company leaves us, it doesn't really make a massive dent in revenue. Whereas in my last company, when we sold, we only had a hundred customers. And the largest customer made up 15% of our revenue.
[00:08:33] Melissa Kwan: So we were constantly kind of at their beck and call and working for them and making them happy. So that's kind of where we are as a business. We're, you know, we call ourselves a lifestyle business which might be fairly different than since some of the larger companies that you speak to. And what that means is we really prioritize lifestyle, not just for us as the founders, we give that benefit to the rest of our team as well.
[00:08:58] Melissa Kwan: We want everybody that's contributing to eWebinar to have the best life possible, such that, of course, they stay with us, but, so that they know we really appreciate their time that they spend here.
[00:09:09] Andrew Michael: Yeah. Very interesting. And there's a few areas we can go into as well on this, but I think maybe the first one is like, how has that transition been for you going from a sales led business to a product led business now? And what have been some of your challenges like navigating this change?
[00:09:27] Melissa Kwan: I think the biggest challenge is just not knowing at all what I was getting into. I think there's a point where experience hinders you. And the grass is always greener on the other side. So in my past, I'm like, well, sales led is so hard. I'm constantly on the plane, going to conferences, selling one-to-one because each contract value was quite big. So I'm like, well, of course, if I can have a business where people just come through the internet and I never have to speak to them, that's magic.
[00:09:58] Melissa Kwan: That's the life that I want to live. I never have to take any sales calls. Being a salesperson for the first 10 years of my startup journey, I thought that sales was easy, right? You talk to somebody, they would buy from you because it's a good product. What I didn't know was that when you have a low cost, like a low ARPU product, people don't care about talking to you.
[00:10:21] Melissa Kwan: They don't take a call. They want to discover on their own and then they're going to do all these comparisons. So it's not like the sales cycle is shorter. In many cases, it's actually longer because there's no urgency to sign up, because it's such a low-cost product and you're not hand holding them. I really did not know what product-led was. I had no idea how hard it was until about nine months after the product launched because I think every product has to start from founder-led sales.
[00:10:52] Melissa Kwan: In the first nine months, I was still doing one-on-one outreach, getting referrals, and of course, it was hard. But at least I got it off the ground. But then when I exhausted that network in their first degree network, I didn't really know where to go. And it wasn't until then that I realized that this was a product led, marketing led, and a customer led company. So I kind of had to learn it with my COO from scratch. Nobody on our team has any marketing experience and nobody has written content before that point.
[00:11:23] Melissa Kwan: So we kind of had to learn everything and that really is the biggest challenge, is like first, not knowing what we were up against and then having to learn everything from scratch.
[00:11:33] Andrew Michael: It's interesting that you started and you mentioned like founder led sales, like every company needs to and I think that's like, I'm coming more around to this idea as well because I always like, I've been operating and working within product led businesses, but I think it's almost a fantasy to think that you like going to ship something and then from day one, you're just going to have people knocking at your door and coming through your funnel and signing up.
[00:11:53] Andrew Michael: And I think in those early days, you really need that sales led approach, founder led sales approach to get that learning. Because as you say, like people that are coming through, [they want to] self serve, like they don't want to speak to people, like they want to self serve. So I think it's like in a lot of ways, maybe it's even easier starting a sales led business.
[00:12:12] Andrew Michael: But then it switches to where it becomes easier to scale a product led business. And I think like, it feels like there's a distinction, at least in my mind at the moment, between the two. Can you hear, like how you see the difference scaling now as you're starting to grow?
[00:12:28] Melissa Kwan: I mean, I think it's definitely a price point thing, right? Like if you're selling a $10 product, $50 product, you know, it just doesn't make financial sense to hire someone to do your job for you. But I think the reason why founder led sales is so important in the beginning is not just the sales part. It's this product's, never seen the light of day. You have no idea if any of the assumptions that you made are true.
[00:12:52] Melissa Kwan: You probably built it for one persona, but there are nine other personas that could potentially use this product. You have no idea of the messaging on your website and inside the product actually resonates with the people who are using it. Founder-led sales is an easy way to get that feedback to better your messaging, to better your product so that you can prime everything for a more automated sales cycle.
[00:13:16] Melissa Kwan: I think that's more the evolution is, I guess, less sales-based, but more like, kind of product messaging and product improvement. But at some point, if you're selling a low-cost product and you can't make that switch, you're constantly going to be losing money because how much is a sales guy nowadays? 100, 150, base, and then they need commission. So you can't even pay that person enough. Right?
[00:13:41] Andrew Michael: Yep. Exactly. And yeah, and definitely there's like a case for different price points and like at which point you can actually make a sales team work versus which you can't. And on these low price points. But I think like what you're saying as well is that, like, founder led sales is like an excellent way just to do really, really good qualitative user research. And to the degree where like, the end result is then paying you, which is the best feedback that you can get is like when you can get that messaging and positioning right on a call that lands and sits with the right audience that you're going after.
[00:14:10] Andrew Michael: And you can feedback those signals back into the product and loop. So yeah, I see like it's, as you say, now it's more of like almost like a research components to building the startup, that's critical to getting it off the ground and getting it where it needs to be for self-serve.
[00:14:24] Melissa Kwan: I mean, I also think that there's one element that most people don't talk about is like, founder led sales is like, brand building exercise, right? It makes the product human. And I think only in the last couple of years have I really seen people caring, not just about the product, but who's behind it. But we're… Like us as consumers have already gone there for like consumer products, right?
[00:14:46] Melissa Kwan: Like when we look at a product, it's like, well, where is it made? Who made it? What's the story? Is it ethical? Right? And only recently have I seen that shift with software. And I think that's why a lot of founders are getting on social media, Instagram, LinkedIn, Twitter X, right? Just to kind of build their own brand.
[00:15:05] Melissa Kwan: So talking to your customers, not just like, hey, I want to do some research, but I want to know how you're using the product. Why are you buying it? Why are you not buying it? Why are you leaving us? Part of that building relationship actually helps with them not leaving.
[00:15:20] Andrew Michael: Yeah, absolutely. And I think that's like part of the brand building as well, like making more human, more accessible. I think definitely now as well, like, as with the rise of Gen AI and how easy it's becoming to build software and it's going to be a big hit, us everywhere. Like the differentiation no longer is going to really be the product. To some degree, it will be like the user experience still that you craft around it. But really, it comes down, then, to distribution and brand and like, how do you stand out and differentiate yourself in the product space.
[00:15:46] Andrew Michael: And I think even for me, I think this was like coming from Hotjar, this was one of those places where I think did a fantastic job of, like creating a human brand and being approachable. And I even remember before joining Hotjar, one of the things that stood out to me was I'd founded a startup, I was busy shutting it down. And you do, you get all these bills come through at the end of the month that you can't afford to pay like, and one of those was Hotjar.
[00:16:08] Andrew Michael: And I remember, like getting this email and was like from David, it was obviously automated, but it didn't sound like it and it was like, Hey, we know like, things are not always as easy as they should be. Like we're here to give you any help. If you need some, I can't remember the exact wording, but it's like, if we can help in any way with this bill, let us know, like, we're here for you.
[00:16:27] Andrew Michael: And I was just like, I'm, probably butchered the copy order, but at the time I remember thinking like, every other email I got was like these bright red warning signs like you've, your credit card has declined, you have not paid. And there was like this personal note saying like things happen, like maybe it expired or maybe a thing, let us know how we can help.
[00:16:44] Andrew Michael: It was just so much more personal and like, made me want to like, support that brand even more. So yeah, I definitely see like, there's definitely, be this rise and shift now where more people like, treat B2B software as B2C experiences we see in the real world. How are you approaching it yourself?
[00:17:01] Melissa Kwan: Yeah, I mean, I'm a big supporter and creator on LinkedIn. Been doing that for a couple of years now. And for me, that's my brand, right? You mentioned accessible. What does it mean, right, to make a product more human? It is to make it seem like you as a founder or you as a team is accessible. If there's a problem, of course, I'm gonna go through support, but I know the founders on the other side, building this thing and it's built with love and intention.
[00:17:28] Melissa Kwan: Right, so I actually get a lot of messages on LinkedIn, you know, connection requests saying like, Hey, I'm a new customer. Just wanted to let you know that I've been following you for the last year. So a lot of times you put something out in the open. You don't know if anyone cares, but you do it anyway, right? Especially when LinkedIn changes their algorithm, you're getting a lot lower engagement, like, but you still have to do the work.
[00:17:51] Melissa Kwan: And I guess that's marketing, right? Like marketing, you do all these things, you don't know if there's any feedback, but sometimes it comes back because most people don't say anything. Most people only say something when it's bad, right? Like our inbox is full of complaints, but the people that have the great experience never write to us, like maybe once in a blue moon.
[00:18:10] Melissa Kwan: So my own approach to that is like, I wanna try to make our business as accessible, as human as possible by just writing about our journey, my struggles, my challenges, my wins publicly on LinkedIn and seeing that, you know, connects with anybody. Not sure if it works, but it's really like 95% of my role is creating content.
[00:18:33] Andrew Michael: Creating content. Yeah. I love that though. And they're not sure if it works. I think like that's one of those things that it's quite difficult to measure and understand nothing in the beginning when you start to build these brands and you start to think, because the other thing, as you say, like people only typically come to complain and especially when it comes to things like LinkedIn, a lot of people are just lurking in the shadows continuously until like one day they decide.
[00:18:55] Andrew Michael: Okay, like, this is the message that hit me and I need to purchase and they'll arrive and say, Hey, like Melissa, I've been following you for years. As you mentioned, like I'm a customer, but if you probably go back in time and see, like, have they ever liked anything of yours or have, they probably maybe haven't even liked anything, but they've read everything.
[00:19:09] Andrew Michael: And I think that's like one of the things I always found interesting with these founder led brands now at the moment is that I think the dividends comes like in the compounds over time, but may be in the beginning, it takes quite a while just to start to see the fruits of the labor before you get anywhere.
[00:19:25] Andrew Michael: So on the topic of that is like, this is a channel that's not really easily, to measure. So, and we chat a little bit about the show, that I think from your perspective, you're coming at measurements in your startup from a different perspective. And I'm keen to hear, like, what are some of the metrics that you're tracking today at eWebinar and how do you approach measurements in general?
[00:19:48] Melissa Kwan: Do you mean like only as it relates to churn or measuring kind of all things?
[00:19:54] Andrew Michael: All things in general, like performance in general. Yeah.
[00:19:57] Melissa Kwan: Yeah. I mean, the number one metric we care about is gross revenue. So I'm like watching Stripe like a hawk, right? And we also have ChartMogul that, you know, does a better breakdown because Stripe actually doesn't do any of the data very good, except for like money collected and even that is kind of iffy because if you have a refund, they don't remove that refund from your gross revenue.
[00:20:22] Melissa Kwan: So there's no real way of actually looking at that outside of signing up for something like ChartMogul, which is actually just something we discovered in the last half year. Because the only thing we care about as a bootstrap company is are we making more money than we're spending? Like, that's it. Because that keeps me alive. So I've got at any given point, at least a 12 month project, financial projection out.
[00:20:45] Melissa Kwan: Some of it based on past data like from day one. I've already had this. So we've had, we have it every year to see okay, like did we make more money than we're spending? Can we hire this new person? If not, when can we hire this new person based on the growth rate that we have? And of course monthly growth rate is what we look at. Of course in the beginning, your growth rate can be 10% a month, 15% a month, but as you hit, you know a million, a million five, your growth rate is going to be much lower, right?
[00:21:15] Melissa Kwan: So I think in the beginning, I kind of looked at that and felt a bit discouraged, right? Because you go from 10% to, you know, 2%. But if you have 2 to 3% or, you know, 3 to 4% every single month for the whole year, you're compounding to, you know, 40 to 50% growth already. Right? So if you look at it from that perspective, like a few percent every month to grow is already good enough for at least a bootstrap company, I can't speak for a VC backed company.
[00:21:47] Melissa Kwan: I think what makes us unique though as a company is we don't measure a lot of things because we don't have the resource. The thing is you talk to any of these PLG consultants that have never built a company, a lot of consultants have never built a company. What does that mean? They know what you should do from a textbook perspective, but when you're implementing these things, you can only implement as much as your manpower and resources allow.
[00:22:16] Melissa Kwan: Of course, I know that I should have an analytics platform and I should track all these product things. And then I should look at data-driven decisions to make tweaks in my product. But I think that's a very blue sky view of seeing how to run a startup, right? I've got nine developers full-time, a few other people that are full-time that are on marketing, and I don't have anybody on my team that is experienced in product, right?
[00:22:44] Melissa Kwan: Product operations, marketing operations, product analytics, like all this stuff that we know we need to do, we have to learn from scratch. So now five years later, only now do we actually have time and enough data, enough usage to say, okay, let's go and implement some product analytics. We're only starting to look at that. So I think what does that mean, right? What that means is like, if you're listening to this feeling like you're not doing enough.
[00:23:11] Melissa Kwan: If you're a smaller company, you're not doing enough because you read on some blog that you should be measuring everything. I think it's normal to not really know what's happening. But there are things that we do is we are meticulous about listening to the voice of our customer. So what are they doing? So anytime somebody hits cancel, we have a question that pops up that says, why are you canceling? Right? Option one, two, three, other where you can fill in an answer.
[00:23:41] Melissa Kwan: And we don't make them jump over hoops to cancel. We just want to know why they canceled, right? So maybe 50% of those people will actually fill in an answer. Some people will say, oh, I can't afford this, right? So if somebody says, I can't afford this, well, then we just let them go, right? I think once… somebody once told me that focusing on people who churn from your product, focusing on people who leave is like leaving a party, a great party to run after people who aren't having a good time instead of focusing on the people who are there who are having a good time.
[00:24:18] Melissa Kwan: We focus less on people who leave and focus a lot more on people who stay. Periodically, we reach out to them and we ask them, hey, why are you enjoying this? Have you looked at this feature? We've only recently in the last half year identified the ICP that we want to focus on. So reaching out to 20 of those guys, offering them $100, $200 to actually speak to us for half an hour or an hour and let us know how can we attract more people like them.
[00:24:47] Melissa Kwan: We don't really quantitatively measure a lot of data, but what we do do is we really ask people who leave and people who stay, why are they leaving and why are they staying? We obsess over really just revenue numbers. What we can see from ChartMogul is our customer churn. So our number of customer churn is actually quite high from people also that don't convert from a trial, but that's normal. Right?
[00:25:19] Melissa Kwan: Like, yeah, people come through, they're not really your ICP. That's totally fine. But our MRR revenue churn is not very high, it's quite low. So what that also tells me is people who stay are also expanding their usage of the product. And that's really our primary goal is how do we get people, who already bought into the concept to use this even more.
[00:25:42] Andrew Michael: And to expand. Yeah, no, absolutely. I think like there's a few different notes on the things from my perspective, it's always like my preference to, the question I love asking as well is to customers that have just renewed and asking them what nearly stopped you from renewing today. And this is something I picked up as well, like from David Domino, so his CRO experience on websites is that, like, typically you have three types of users on a website.
[00:26:06] Andrew Michael: So they're coming and they're just browsing and maybe 50% will convert and the other 50% won't. There are those that are always gonna be like the customers that stormed in and they were gonna buy no matter what was on the site because they know they had a big need. And then you have people that maybe just clicked on the link by mistake or it was like an accident. And like asking for feedback before they've converted, you're getting a mixed bag of feedback and you're not sure which to action and activate on.
[00:26:28] Andrew Michael: But asking like, immediately after they signed up saying like what nearly stopped you from signing up today. You're getting feedback from those who are always going to be customers and from those who are a little bit on the fence and you can [action nothing]. And I think the same thing that applies to churn and retention is like asking, like, why did you leave? Is like one thing because they haven't been successful, in there on the way out and there's some insights you can take from there, but you probably, not probably.
[00:26:49] Andrew Michael: You get way more motivated people to tell you why they nearly stopped from renewing recently because they, still using the product, they have a vested interest in doing it and they want to continue. And I think to your point as well on like, the stage of your startup and so forth and data like when I joined Hotjar, I think Hotjar was doing around 5 million in revenue. And I was completely surprised how, like little data the company was using, like almost no data.
[00:27:12] Andrew Michael: And it was like, more in line with what you're saying now as well is that's like really qualitative feedback, very close to customer, constantly listening and operating and then using just like high level numbers in terms of MRR and stuff is the guiding post. And I think it's for a few reasons, like one in the early days, you absolutely need this. You need to have the qualitative touch because the product isn't in the right form or stage or reach, product market fits to some degree and you're still discovering your ICP and so forth and that.
[00:27:39] Andrew Michael: And the other point is like, you just don't have the data, like to be able to get statistical significance in anything or to have, like really strong signals. And a lot of times it can just be more noise than signal. So yeah, I've definitely, like my thing on this, like coming previously from a venture backed startup where I was told you needed every metric under the sun. And put together dashboards and everything for investors, and then just realizing that at the early stage, it's absolutely bullshit for the most part. It's like you need a few basic metrics to keep track of, and then over time, you can expand and grow from there. So very interesting to see.
[00:28:11] Melissa Kwan: I think a lot of companies, even if they measure data, they don't really wanna admit that they're not leveraging it, like in, usable way, right? Because collecting data is one thing, but where do I start looking, right? Where do I start looking for answers and how do you do that? Right? Like, and my COO, he's our Jack of all trades guy. I had to put him through courses to learn this and we still haven't implemented. We're kind of in the process.
[00:28:41] Melissa Kwan: Like I put him through the PLG course that Leah Tharin hosted a few months ago and we're constantly learning. Right? And I think this is really, truly the biggest challenge of any startup is like, everyone kind of thinks, you know what you're doing because you're still alive, you're moving forward, you're bettering the product, but everyone's just kind of figuring it out on the fly. And only through going through that course did we know that you have to start with a hypothesis and then you have to look at the data to try to like, prove or disprove that.
[00:29:09] Melissa Kwan: Like I would have never known that, right? I would have thought, okay, well, we implement the dashboard and then it's gonna tell us stuff, right? So it's a full-time job and it just takes a lot more resources. I wanna address one other thing though, as you had mentioned, on, like, how we track some of the marketing performance and things like that. We have a question that pops up on our demo and of course our demo is automated through eWebinar.
[00:29:31] Melissa Kwan: The first question is, how did you hear about us? And it's a poll, right? And we have a lot of people come to our demo, about 500 people a month, just kind of automated onto eWebinar. And more than 50% of people answer that question. So we actually have a pretty good view of, did you hear about us through social media? I'm only on LinkedIn to social media, means LinkedIn, is it on a podcast, did somebody tell you?
[00:29:56] Melissa Kwan: So I've really scaled down on some of the content that I could create on social media in the last 90 days. And I can see that the percentage from hearing about us through social media went from 20% to 10% in the last 90 days. So on the point of like, we don't really know if it's working, just having some really basic kind of self-reporting metric like that, kind of tells us like, okay, we better get back on it.
[00:30:22] Andrew Michael: Yeah. No, I think, like, attribution is a whole different story as well, like just for context, I set up the business intelligence and [same at] Hotjar. Like at some point, my journey, I spent a lot of time, like working on attribution and I've helped other startups with it. And it's like, I think we're at a stage now where like, I'm actually leaning and my preference would be self attribution just with like the amount of hassles we have with cookies and tracking and consent and all of this.
[00:30:46] Andrew Michael: I think like, you get… probably going to get more signal from that survey where you're getting 50% responding, like I think companies would struggle nowadays to get like 50 to 60% attribution on all users and understanding channels. So yeah, definitely. I think that's one area where like qualitative insights now is going to, it’s probably become a new norm, like going forth.
[00:31:08] Melissa Kwan:. I mean, if we only did what we can attribute, we wouldn't be doing anything at all.
[00:31:12] Andrew Michael: Yep. Absolutely. So this has got you this far, like you were saying now at the moment, now you're starting to look into different metrics and you're trying to see where to get started. Like where are you thinking about getting started? Like on your analytics journey now and tracking, you have your revenue data, what you want to lay on next.
[00:31:31] Melissa Kwan: Yeah. I mean, I'm not the one heading that project specifically, but we are looking at implementing, like something like dude or amplitude or like something that measures usage within the product, which we have not done at all. Like we actually have no idea whether our features are being used, where people are dropping off, our most likely users that convert, like what are the top three actions that they do. Like we have no idea.
[00:31:59] Melissa Kwan: So, and it's actually gotten us this far. So I'm very happy about that. But that's kind of the next phase because we really need to work on churn. Like that is one thing we haven't worked on. We haven't had the luxury of doing that. But in working on churn, it's not so much stopping people from leaving. It's, how do we get people properly activated, right?
[00:32:25] Melissa Kwan: So we recently implemented also UserPilot to have in-product videos, pop-ups, like, alert them when something is down or when there's a new feature. We never had any of those things before. Right? So only now are we starting to figure out, okay, like what are the things that we want people to do right after they come in? And also after a few years, our product's gotten a lot more complicated than we would like it to be because our users are actually using it for more things. Right?
[00:32:53] Melissa Kwan: So really also making the tough decision to say, okay, we've got these three like personas that actually use the product. Are we willing to take the risk to focus on just one? And that was really a big conversation that we had, in the last half year is, like, so we've got sales, we've got marketing, we've got customer success. We have the most sales and marketing users, but customer success leaders give us the most revenue, but we have the least of those, right?
[00:33:21] Melissa Kwan: So how do you make that decision? Do we stop speaking to sales and marketing and really only focus on customer success and then build out features that not only attract them, but gets them talking to their friends and network about how awesome our product is for them and then have them expand usage. Because our pricing model is based on, number of active webinars, right? And sales and marketing maybe will have one or two demos, but you can imagine a CS person comes in, they've got 10 or 20 trainings right away.
[00:33:52] Melissa Kwan: So I think lowering churn and really increasing activation is also about making tough decisions on only attracting and retaining the customers that give you the most revenue. But that's a really, really tough decision to make, especially if you're like, borderline comfortable.
[00:34:14] Andrew Michael: It is probably one of the most difficult decisions, but it's probably one of the most critical decisions I think at an early stage and similar like, in Hotjar, at some point, we really did the exercise honed in on the ICP and needed to make the difficult decision of where to focus and it's actually ironically in 15 minutes launching a course actually with layer on, hard to find and identify your ICP in B2B SaaS because of the experience working at Hotjar and other places.
[00:34:39] Andrew Michael: This is one of those biggest step changes you can have for the business when you have this core focus. Everybody knows who they're building for and going out and attracting them. I think to your point as well, even though you may have more marketing and sales success, knowing and understanding that the use case is strongest and makes more sense.
[00:34:57] Andrew Michael: Your customer base that you have today is a direct result of the product you built and the marketing you've done to date, but does necessarily always represent the best opportunity. So going through that exercise and figuring that out, I think is definitely, it's not an easy decision to make. And I've spoken to so many different CEOs and founders, like there's constant debate and they all know they need to do it, but like pulling the trigger and actually doing it is like, it takes a lot of guts and courage to do so.
[00:35:22] Melissa Kwan: Well, I mean, you never know, is it going to, like, are you going to lose revenue, right? Or are the people who are staying just love your product so much that they're still gonna… Because it's not like we're removing features, right? We're just not continuously building for that audience. There are still, those things are still there, but maybe they're named differently, right? Maybe they're buried in a different way. If we focus on a certain ICP, we're also gonna change our website messaging.
[00:35:50] Melissa Kwan: And also all of our onboarding emails are gonna speak to a particular audience. But does that mean that the audience who is gonna hear about it anyway, is gonna be like, oh, that's not for me. But at some point you have to be okay with that. I think we have, we have in the end made that difficult decision to be like, you know what, we're speaking to too many people.
[00:36:10] Melissa Kwan: And then it's hard for us because we're like, well, there's a, one feature that serves two groups, but it would be named differently if we put it out there. So what do we do? So I think now we're kind of in that in-between period where we're like neither here nor there, but hopefully in the next couple of months, we're only going to be speaking to customer success and onboarding and training and see where we go from there.
[00:36:35] Melissa Kwan: I think it's the only way that we can, for example, add another million ARR in the next year. Like, otherwise, like I just don't see a path there if we keep being, you know, the jack of all trades or–
[00:36:47] Andrew Michael: Jack of all trades. Yeah. Like I think from my perspective, we're looking at the market and looking, like, how much software is being built today. If you don't really differentiate and you don't have a core focus on ICP, it's like, you know, come very, very hard to stand out. And I think more and more as well, like if you have this medical focus on a specific group in audience, like you can really generate and create amazing products around that encourages that word of mouth and gets people talking about your product, gets them coming back.
[00:37:13] Andrew Michael: But I think it's like, and it doesn't necessarily mean that marketing sales can't become an ICP in like year three, year four, year five, when you're expanding and you're looking at different use cases and so forth, but at the start, especially in a bootstrap business where, like if you start to think about marketing and the channels that you choose and all of this, like going, spreading your audience wide, like you end up like spending different messages in different places.
[00:37:36] Andrew Michael: Where having an acute focus, you can actually potentially even dominate channels and keywords and things like that. When, as a small team, like typically would be very, very difficult to grab some, again, some larger companies that are maybe servicing these all in one solutions, but.
[00:37:51] Melissa Kwan: Yeah. I mean, I think, I want to mention that where we are today and choosing that ICP, I feel like is a luxury that we've earned. In the beginning like we just needed the revenue. So of course, you know, my mentors and my friends and my buddies, hindsight 2020 have said, hey, we've gone through this process, you need to focus on one audience. But how can I do that? Right, in the beginning, I'm burning 20,000 a month, and then I'm burning 30,000 a month, and I'm not even paying myself yet, right? I'm just trying to get this product going.
[00:38:23] Melissa Kwan: So I need to get the revenue where people will pay me. And only until now where we feel like people are, everybody is now at a comfortable monthly income where we can be like, okay, now what can we do? So that, and if we lose a little bit of revenue for the next six months, are we still gonna be okay as a company? And only then can we actually make those decisions.
[00:38:52] Melissa Kwan: And now we're realizing that once we made that decision, it actually made churn less scary. Right? Because if someone leaves and they're like, oh, I can't afford this, well, then you're like, well, then you're definitely not our ICP. Or they're like, oh, I'm canceling because I had a demo and it didn't convert. Well, a lot of times that's not the software's fault. But, you know, instead of trying to keep that person and retaining them, like then we're like, okay, that's actually not somebody we want to retain and that's okay.
[00:39:24] Andrew Michael: Yeah. That makes things a lot simpler for sure. I love that. I see we're running up on time though to continue on this discussion for hours, but I want to make sure I ask you a question I ask every guest is what's one thing that you know today about churn and retention that you wish you knew when you got started with your career?
[00:39:41] Melissa Kwan: That's a good one. I would say not all churn is fixable. That's one thing I learned just from answers, from the question that we pop up or just speaking to people, your biggest account will churn for something that you can't control, especially if it's enterprise. The admin leaves and that was the only person that was trained on your product and that person leaves and nobody knows, nobody has a clue what this is. Nobody is training the people who are actually using this product.
[00:40:14] Melissa Kwan: We've had that happen a couple times or people that are, companies that are using this for a certain initiative. And that initiative lasted one year, but for that one year, they were paying us like five grand a month. So you kind of get used to that, and then you didn't really know that was an initiative and they leave and you feel like there's this heart sinking feeling where you're like, oh, I really messed up on this product because I didn't retain them, but not all churn is fixable. Right.
[00:40:43] Melissa Kwan: Everybody buys and uses this for their own reason, on their own cycles. You can't control people churning and not having a succession plan. You can only, I think, do your best as a product and as a CS team. But what that means is don't get so emotional. It's just the business.
[00:41:02] Andrew Michael: Yeah, for sure. I think there's probably a lot of listeners though that listening to the two cases that you mentioned and thinking that there are things you can do about the customer champion leaving and these programs that they build. And we've discussed this on the show before. But in general, definitely, I think, Emeric Ernoult on the show from Agorapulse talks about this.
[00:41:19] Andrew Michael: And one of the things, well, oftentimes we talk about, okay, we want to decrease churn by 5% or 10%, but like, what does that actually mean? And knowing what you can fix and what you can't fix is really, really important to understand how much of the churn you actually can, because like another example, maybe like it's out of your control completely as small businesses going out of business, like your software product is not going to keep that small business in business.
[00:41:41] Andrew Michael: So knowing like what percentage are for that reason or that cause is like, okay, if it's 50% like, and we had 4% churn, there's no ways we're ever going to get to like 1% to whatever, because we already know that 50% is out of our control. 2% is out of our control. So knowing and understanding, like what you can control and can't control is like, very, very important then to also be able to, to your point earlier as well of like knowing the use cases that they're mentioning and are those the reasons that we care about. Also it's important to know what you can influence to be able to set these metrics effectively.
[00:42:13] Melissa Kwan: I think the other thing to mention that differentiates some of the companies you were talking about for end to us is we're a very small team and we are a low cost product. What that means is, comparing to Agorapulse, for example, which is a customer of ours, is we don't have a CS team reaching out to people. Somebody pays you 200 bucks a month. You're not going to have a dedicated account manager.
[00:42:39] Melissa Kwan: So yes, like I think some of these things for bigger enterprise deals could be like, there's definitely things that you can do, building a relationship, making sure there's a session plan for them, train the customer for them. But within a company like us at our price point, a lot of things aren't really that controllable. So also making that differentiation as like, when does it make sense to invest in a person to kind of nurture these bigger accounts? Like I would say those big accounts that pay us, you know, more than a thousand bucks, there's probably like a handful. So.
[00:43:10] Andrew Michael: It doesn't make much sense to have a dedicated person. Yeah, absolutely. Well, Melissa, it's been an absolute pleasure chatting with you today. Is there any other final thoughts you want to leave the listeners with? How can they keep up to speed with your work?
[00:43:21] Melissa Kwan: Yeah. If you want to connect with me, the best way is through LinkedIn. My last name is Kwan, K-W-A-N, that's Melissa Kwan. And if you want to know more about eWebinar and how it can help your business or yourself, just eWebinar.com as it's spelled as it sounds.
[00:43:38] Andrew Michael: Amazing. Well, for the listeners, we'll make sure to leave everything we discussed in the show notes so you can pick that up there as well. And thanks again for joining. Melissa, I wish you the best of luck now going forward.
[00:43:48] Andrew Michael: And that's a wrap for the show today with me, Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with Churn.FM and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting Churn.FM.
[00:44:08] Andrew Michael: Also, don't forget to subscribe to our show on iTunes, Google Play, or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to Andrew@Churn.FM. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.
