Keep the Competitive Edge and Reduce Churn

Keep the Competitive Edge
and Reduce Churn
Tara Dwyer
Webinar Coordinator
Product ManagementToday
Johanna Rothman
Management Consultant,
Rothman Consulting Group
September 12, 2023
9:30am PDT, 12:30pm EDT
featuring
moderated by

Revenera helps product executives build better products, accelerate
time to value and monetize what matters. Revenera's leading solutions
help software and technology companies:
• drive top line revenue with modern software monetization,
• understand usage and compliance with software usage analytics,
• empower the use of open source with software composition analysis,
and
• deliver an excellent user experience
for embedded, on-premises, cloud and SaaS products.
To learn more, visit www.revenera.com.

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Johanna Rothman
Management Consultant, Rothman Consulting Group
Keep the Competitive Edge
and Reduce Churn

© 2023 Johanna Rothman
@johannarothman
We want to retain customers
Sometimes, they leave unpredictably
Why?
5

@johannarothman
Personal Stories
• Change in UI/UX
• Change in pricing structure
• Discontent with original (“only”)
choice, see an alternative (sometimes
feature-superior, sometimes not)
6

@johannarothman
People Leave Products Because…
• No longer need any solution
• Product no longer offers the same
impact:
• Price
• Satisfaction (experience)
• Experience using the product
outweighs the impact the customer
receives
7

@johannarothman
Insuf
fi
cient Impact —> Frustration
Frustration —> Churn
8

@johannarothman
Our Agenda
1. Why customers start to use your product (the hook & impact)
2. When you care about churn and when you might not care as much
3. Measures to consider at which points in the product’s lifecycle
4. Leading and lagging indicators
5. Churn reduction strategies
9

@johannarothman
1.Your Product’s Hook
• Your product’s hook is the promise
you make to your ideal customers
• Who do you want to buy your
product?
• What problems does your product
solve for those people?
• Your product offers impact to solve
those problems
10

@johannarothman
Consider Personas for Identi
fi
cation
• Personas help you explain (to internal
people)
• Ideal customers
• Ideal problems
• What matters to those customers
(impact)
11

@johannarothman
2.What Matters to Which Customers When
12
From Create Your
Successful Agile Project

@johannarothman
Early Cares About Churn
• When you’re discovering the product
and the customers, you might want
churn
• By the time you want to cross the
chasm, you only want additional
customers and to reduce churn
• Enthusiasts want “more!”
• Visionaries want “solve this problem!”
13

@johannarothman
Implications for the Early Market
• Flexibility in problems you choose to
solve (& impact the product makes)
• Customers expect frequent releases
• Flexibility in defects
• But as you approach the
mainstream…
14

@johannarothman
Mainstream Flips Everything
• Your maximum number of customers
• Reducing churn here matters the
most
• Notice what matters to them:
• They don’t need a lot more features,
but they need the features to work
• They need relatively frequent
releases
15

@johannarothman
Retain Customers as Product Approaches EOL
• Most products appear to be “cash
cows” here
• They don’t care much about new
features as long as the features work
(max impact)
• Goal: Retain customers and reduce
churn
16

@johannarothman
Retain customers by offering impact.
Product meets their expectations.
17

@johannarothman
3. Chasm/Mainstream Measures
• As you increase the number of
customers, they expect:
• Time to value is short
• “Typical” product paths work (solve
their problems with maximum
impact)
• Suf
fi
cient features to solve most
of their problems
• Installation/registration ease
18

@johannarothman
Logs for Insights/Measures
• Leading indicators:
• Abandon the registration
(insuf
fi
cient ease)
• Requests for more features (not
solving the problems the customer
has)
• Requests for “how to” videos/
documentation
• Each of these says something isn’t quite
right
19

@johannarothman
4. Indicators
• First, remember this:
• The more you instrument the code,
the faster you can receive the
measures
• Validate your data with more than
one user’s experience
• Remember that the older the data,
the less valuable it might be
20

@johannarothman
For all products:
How easy is it to onboard the
customer?
21

@johannarothman
What to Measure for Leading Indicators
• Abandoned registration
• Never-installation
• Before the customer starts, they
stopped
• Gather qualitative data to understand
why:
• No survey.Talk with them.
22

@johannarothman
Lagging Indicators: From Logs to Measures
• Defect escapes:
• Any measurable response time
• More features: Gather request data
from Customer Support/Success
• How-to requests: Instrument requests
for documentation or videos
23

@johannarothman
Learn Which Features Have Most Impact for Whom
• Consider these ideas:
• Most popular features by persona
• Least used features overall
• Who checks for video/text
documentation?
24

@johannarothman
Product Usage Measures
• Instrument the product to detect
churn here:
• Defect escapes in the typical paths
• Intermittent problems
• Substantial UI change
• Fee/payment changes and (lagging)
usage changes
25

@johannarothman
Time Series to Af
fi
liate Big Changes with Dates
• Example:
• Product release on July 1
• Huge bump in how-to videos and
Customer Success requests post-
release
• Time Series can help everyone see
that as early as possible
26

@johannarothman
5. Churn Reduction Strategies Depend on the Change
• Different users: create more A/B tests
• User experience: experiment
fi
rst
• Pay structure:Analyze your
competition and see where your
customers have alternatives
• Watch the market for challengers to
your product
• Verify your product’s promise matches
the product’s reality
27

@johannarothman
Big Ideas
• Remember what matters to your ideal
customers and when
• Instrument the code & product and
use a time series to see changes early
• Pay attention to when users contact
you
• Always clarify your ideal customers
and the promise you make them
28

@johannarothman
Let’s Stay in Touch
• Pragmatic Manager:
• www.jrothman.com/
pragmaticmanager
• Please link with me on LinkedIn
29

/in/taradwyer/
Q&A
Johanna Rothman Tara Dwyer
Webinar Coordinator, Product Management Today
/in/johannarothman/
jrothman.com
Management Consultant, Rothman Consulting Group
productmanagementtoday.com

Revenera invites you to learn more about reducing churn and other ways of growing
recurring revenue with product usage data!
Check out the Revenue Optimization Guide for Software Suppliers available on Revenera’s blog,
and then join Vic DeMarines, Revenera’s VP, Product Management for Software
Monetization for a 25 minute webinar on leveraging entitlement usage data to hit your
revenue target.
Find the article here: Find the webinar here:

Keep the Competitive Edge and Reduce Churn

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