How To Deal With Churn Connected to Your Membership Website
Why people leave:
● See no value within first billing period
● Do not see equivalent value within first billing period
● Overwhelmed by the product, so much to do, so little time
● Run out of money
Membership Site, buys access, logs in, 100 things to do, can’t figure out where to start, cancels and leaves because it’s too overwhelming. Same can be applied to a software company, LMS site.
For product stores
Churn can be the amount of first time buyers who don’t return
This weeks show is Sponsored By Kinsta Hosting
Jonathon: Welcome back folks to the WP tonic show. This is episode 410. I’ve got my new cohost, yes, Cindy’s gone off on a worldwide travels. And she’d be back in a year. But I’ve got a great new cohost. That’s Adrian. Adrian would do you like to introduce yourself to the listeners and viewers?
Adrian: Hi everyone. My name is Adrian. I’m the CEO and founder of a company called Groundhogg. We developed sales and marketing plugins for those businesses out there that use WordPress. To help them with email marketing, marketing automation, they’re building of their sales pipelines. And really turning their WordPress website into a sales engine in order to maximize the revenue from their ecommerce store or their LMS sites. Their digital downloads store or whatever it is you use WordPress in order to run your business. Uh, you can visit us at groundhogg.io. Or reach out to us on Facebook at Groundhogg WP.
Jonathon: And with Adrian’s help, because of Adrian’s expertise. I’m excited he’s agreed to come on board on the show. We’re going to have an emphasis on marketing, online marketing with a slight emphasis obviously on membership and learning management systems. But with his experience, I think we can have some great guests and we can have some great conversation. So this week folks, what are we going to be looking into? Well, we’re going to be looking in to people leaving your course. Basically buying out pretty quick on your membership and your course in general. And retention basically. And how can you increase your retention. And how can you get possible students that have left to come back onto your course. So it’s a great discussion. Before we go into the main part of the discussion, I want to talk about one of our great sponsor. And a sponsor as agreed to continue for another year.
I’m really pleased about that. That’s Kinsta hosting. And what is Kinsta? Well, they’re a specialized WordPress hosting provider. They only host WordPress. That’s their specialty. And they have an emphasis on power users. People that got membership sites, learning management system, woo commerce. Or people that need really great hosting for critical websites that can’t be down. Now they use the Google clouds. The technology is fantastic. But what they also offer is fantastic, 24/7 support from some of the best support staff in the industry. They also offer fantastic interface. All the technology looking for staging site, one click backup, latest version of PHP. So you are a developer looking for quality host for your clients or you are a power user yourself. I suggest that you should go over to Kinsta. Kinsta host the WP tonic website. I have being absolutely blast away by their support. Go and have a look at Kinsta. So Adrian, how are we going to kick this off Adrian?
Adrian: So as you had mentioned, today we are going to be talking about churn. Or rather for those of you who are not familiar with the terminology, that is churn your customer retention rates. So let’s just start off by laying out some terminology. So throughout the show we’re going to use the term churn, which is essentially the percentage of your customers that do not stay with you past their first billing period. So if they sign up, if for example, if you have a subscription based product that you charge monthly or a yearly. Then your churn rate would be the percentage of customers that sign up and then leave before their second billing period. So if you have a monthly subscription, it would be the number of people who leave after the first payment within the first 30 days.
That is your churn rate. You can also call it customer retention. You can call it burn. Or it goes by many names. But for this show, we’re going to be using churn. Now there are lots of reasons that people leave your course. And we’re going to go over what those reasons are. We’re also in this show going to go over how to ensure that people stay with you past that first billing period. So ways that we can actually decrease the churn rate that you are businesses experience. And finally, we’re going to cover what to do when people do eventually leave. Because it’s kind of inevitable and there will always be those who decide that your product isn’t for them or it’s not the right time. Or there are several reasons again, why people leave. And we will discuss that when they do and when it does happen, what you can do in order to ensure that it doesn’t have a lasting negative effect on your business. So that is super exciting and those are what we’re going to do today.
Jonathon: Oh, that sounds fantastic. So where do we begin with this Adrian?
Adrian: So let’s start off with why people actually leave. And I read a fantastic article from a company called hot jar. If you’re not familiar with hot jar, they are an analytics company. You essentially install their tracking code on your website and they’ll track your heat maps and you can view actual recordings of people clicking through your website. And allows you to really diagnose where the holes in your website are. As well as your sales process is concerned. Your customer journey and allows you to diagnose that. And they released this fantastic article that essentially proclaimed to the world that 33% of their entire customer base leaves before their second billing period. So their churn rate from an initial signup is 33%, which is astronomical, especially if your entire business is subscription based. And they provided three reasons why their customers left. And we’re going to go over what those reasons are. And what they did and try and try and fix that.
I also included some reasons from my own experience running a technically software as a service business and having recurring subscription products. And all of that good stuff and why people leave. And what I did in order to solve that as well. And this is coming from software as a service perspective. However, it just as equally applies to membership sites equally applies to course creators equally applies to even a physical product sellers. So if you sell, if you have an ecommerce store and you sell physical products equally applies to you as well. Rather than your first billing period, you could just think of it as the number of people that never returned for their second purchase.
Jonathon: I think even the health industry though, gyms, physical locations that have membership, they have exactly the same problems. Don`t they Adrian?
Adrian: They do. So if you’re in a physical product business. Your churn rate would be the number of people that come and buy something for you and then never come back. That`s what I would classify or many people classify as your churn rate. If you are a physical products seller. And you only do one off purchases rather than signing people up for subscriptions. If you don’t sell subscriptions. By the way, I would look into that because it’s rare. A lot of businesses are moving. Even Amazon prime, the largest one off seller of products in the world has a subscription model called Amazon prime. And that’s what they use in order to retain more customers. But enough about that, let’s jump into why people actually leave. So the number one reason, that we found and hot jar found and I found in my own business. Or people do not see the value that they paid for within their first billing period.
So if your subscription or whatever it is, costs let’s say $39 a month. And they do not experience $39 with a value within their first billing period, then that’s a reason to leave. If they can’t justify the cost within the first 30 days to justify another $39 next month to experience again the same underwhelming value, then that’s a reason why people will leave. So that’s the reason, number one. Reason number two is they don’t see any value at all, which is more problematic, but we’ll get into that a little bit later. Reason number three is they do see the value. The value is there and they can taste it. But they’re not equipped to extract it out of your product or service offering your course, your membership, your site, your software. They are just not equipped to do that. So they’re overwhelmed by your product or service offering.
There’s so much to do but so little time. And they cannot dedicate the time or resources to extract that value. So they don’t see that they’re getting the value out of it, which kind of just lends back to the first one. And number four is they just run out of money. Some people sign up for things not necessarily being able to pay for it. They sign up for it and they can see the value in that. They want to be able to extract the value, but they’re kind of, they’re up against their credit card statements at the same time. That’s not necessarily something that you can fix on behalf of that person. But it is something that happens. And it’s important to keep in mind. So you don’t take it personally if somebody leaves. You don’t know what’s going on in people’s lives. So that’s just something to keep in mind that sometimes people just don’t have the money to continue their subscription.
Jonathon: You can do if you really think about it. Because if you actually come, that’s why listening to this particular episode and doing some research is helpful. Isn’t it Adrian? On your marketing side to try and get these people back. You could consider offering a more extensive payment plan. Can you?
Adrian: Absolutely. But those again, so that’s leading. So we’re going to talk about again, why these are the reasons that people leave and we’re going to talk about when they leave. What can you do to do about it? So we’re going to get there. Don’t you worry? And all of this lends to something that I have coined.
Jonathon: That’s a polite way for him to say he is trying to keep it under control listeners and viewers. That’s why I’ve asked him to become my cohost. He is like Cindy, I am in some control. Sorry. I just couldn’t resist that.
Adrian: No worries. No worries. So all of that is part of the churn cycle. So the churn cycle goes something like that. Someone signs up for your product service or they buy something for you. They start using the service, they start to consume it. The customer does not experience their initial signup value or any value within their first billing period. Or within the first x number of days that you would need to use in order to get them to their second purchase or second billing period. And then they end up canceling their subscription. Or they just don’t come back. That is the churn cycle. One great comparison that to some to accompany that has their churn cycle under control is Spotify I’m not sure if you sign up for Spotify, but Spotify, if you’re not familiar, is a service company.
What they do is they just curate music and you can sign up for a monthly membership fee of 9.99 Canadian. And you pay their $10 fee every month and you get access to unlimited music. Now what they did when they first launched several, I don’t know, maybe like six or seven years ago. Is at that time iTunes was the big curator of music. So you had to go on iTunes and it was 99 cents per song for in most cases. Sometimes it was a 1.39 for songs. If they were on the top 100 list. And what that meant is if you could go to Spotify and their business model and pay $10 a month and you listened to 10 songs a month. Then your value was worth it because the only other way you would get those songs was by going to iTunes and spending 99 cents per song.
So they equated their value within that first billing period to just listen to 10 songs and your subscription has pays for itself essentially. Does that make sense? So that’s an example of someone who makes it super easy in order to see an extract that value in a very, very short period of time. Because at two and a half minutes per song, that takes you about 15 minutes to get your value out. So those are some of the reasons why people leave. Let’s talk about ways to ensure that people stay. We know why they leave and we can deduce why they’re leaving. And if you don’t know why your customers are leaving, it’s actually really easy to find out. Just ask them.
Jonathon: Before you do that Adrian we are going to go for our break.
Adrian: Oh, are we? Okay. Brilliant.
Jonathon: When Adrian comes back, he’s going to tell you all of the good points. We will be back in a few moments.
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Jonathon: We’re coming back. Adrian now can answer his own question.
Adrian: So we know why people leave. Just to recap after our break. The reasons people leave, they see no value within their first billing period or they don’t see the equivalent value of their price that they signed up for. They get overwhelmed by the products. There’s so much to do but too little time in order to extract the value out. Or they run out of money. They are up to their credit card statements. And that`s something that you can’t necessarily control. But we’re going to talk about ways that again, once they leave that we can go back to that and help them, actually be a user of our product. So those are the reasons why people leave. Let’s talk about ways to ensure that people stay. So a few of these strategies I have implemented my own business and I see them implemented in several other places as well.
The Hot jar article that I have mentioned talks about how they implemented some changes in order to ensure that they reduce their churn rate. So the first and most obvious way is to ensure that they see an equivalent amount of value within the first billing period. But the question then becomes, well, how do you do that? How do you may ensure that someone in their first billing period sees the value of their price and then continues to pay for it? So either equivalents or value above that billing period. So the first way that I found was really helpful is just making you available.
So if someone is one of the big problems are if they’re overwhelmed with the product. Then they can’t extract the value by making yourself available, being available to questions, having a community, having extensive documentation, having a help center. Or just, you know, making sure that you communicate with your clients or in your customers by email is this super helpful way to that psychologically helps the person see all right, well I may not be getting my value out like immediately by myself. But with this person’s help, which they are making their self-available. I will be able to do so eventually.
So by making yourself available and open to questions and transparent. It’s a lot easier for your customers to see the light at the end of the tunnel. And then eventually be able to extract that value out of your service offering. Number two is providing constant guidance and assistance. Ensuring that your customers know where to go and what to do within their first billing period with your product or service is extremely important. And I actually in the show notes there should be a second article which I have written. That discussed how to set up an automated onboarding sequence for your business, for your LMS or for your membership site. And essentially what an onboarding sequence does is it guides everyday someone through the different facets of your product. So if you have a different tiers or you have different areas, you have a community, you have the support site, you have a forum. Your customers do not necessarily know where all of those different things are.
You have to tell them where they are and tell them when it is appropriate to go to those places. And you can use an onboarding sequence in order to do that. I’m not going to get too far into that one topic. There is a blog post to accommodate this. And that should be linked and you can go and look at that after. Another great way to ensure that people see equivalent value is tell them when to experienced value. Now this is a little bit of more advanced concept. So it’s easy for someone to sign up for product. And if your big goal is you will make like $10,000 in the next six years by following this seven step program. Super big lofty goal. And it’s really hard if that’s the goal you set, that’s really high. And they’re not going to experience that amount of value within that first billing period.
So if you set the goal that high and they don’t experience that, then boom, guess what they’re going to leave. So the way that we mitigate that is we set many goals that we tell them is when they should experience value. So for example, in Groundhogg, our first benchmark for experiencing value is sending an email. And we tell them, congratulations, you’ve just sent your first email. That’s so awesome. And that is valuable to you. Whether it is actually valuable in terms of monetary results or not. But it’s psychologically valuable because they feel as if they are moving forward. And technically they are moving forward. They’ve just sent their first email. That’s a big step into engaging in marketing and promoting your business and helping your list. So that is a literal like first step for experiencing value. Now you set in yours in your steps, these small benchmarks for experiencing value.
And then if that’s the value that you set, that’s the value of their experience. And they will see that as an equivalent to whatever your price was. In an LMS context for example, you can set your first experience of value after lesson one. Send them a congratulations message you just experienced lesson one, that one lesson alone was worth this amount of dollars. Congratulations. And here are next steps so you can experience more value into the future. So setting those benchmarks and telling your customers when to experience value is well valuable, I suppose. And the last way that we can ensure that people see equivalent or more value within their first billing period is to validate their customer experience. So by providing constant validation that the customer made a good choice as a great way to ensure that they experienced values.
So just check in with them every once in a while. Say, hey listen, you’re doing a great job. You’re well on your way to whatever lofty goal you set by the end of this course. Or by what you should achieve by using the software. You’re well on your way and if you need any help, we are here to guide you and provide that. So just by providing that constant validation, checking in and showing that you’re active within your community. And by providing them that experience is a great way to ensure that they see value. So those are ways that within the first billing period to ensure that people continue to pay and continue to be a customer. The second way to ensure people stay is pretty obvious. It’s continuing to provide long-term value. It’s all great to provide a ton of value within the first month.
Now if they get past the first month, you have to provide value long-term. And you can do that in a variety of ways. And your product is probably already designed to do this. But if you need a few pointers videos about using your product or success stories about other people using your products and services. Blog posts, telling them how to use guides, whatever it is that you are the value that it is, that you provide insights into other people’s businesses or competitor businesses. That they can use strategies, et Cetera, and all pretty standard stuff. But it’s all about providing that long-term value.
Because it is still possible people to leave after two months, three months, four months. It becomes increasingly less likely the further on that they get, but it’s still important to provide value. So that is ways that you can ensure that people stay to decrease your churn rate. But even if you do all of that, there is the inevitable person that will leave because that’s just business. You know businesses as business does and people will leave and here are some strategies that you can implement rather. To make sure that it doesn’t have a long lasting negative effect on your business. Do you have any comments before we jump into this? Jonathan?
Jonathon: Thank you so much for thinking of this. I have had an easy show. Listeners and viewers I have chosen a great cohost. It’s been very rich, but the information you given it`s fantastic. Adrian thanks you so much.
Adrian: Well, part of my strategy is providing constant value. We want to make sure that you know, your show listeners get the value that they need in order to run their business.
Jonathon: I think everything you’ve outlined is spot on. You know that you’re preaching to the converted.
Adrian: So what do we do when people actually leave? So the number one thing that you should do is. I did outline earlier some reasons that people leave, but those are the basic reasons. There are lots of reasons that we didn’t cover that people might leave. And we need to ask them why they left. So send an exit survey. If someone leaves, just ask the simple question, why did you leave? And they will either tell you, I hate your product, I hate your service. I don’t know what it is. I just, I got no value out of it. And you can do is don’t take it any of that personally, but use that information to better structure your onboarding process. Your products, your service offerings, whatever it is that they had a problem with. You can then go to and use in order to provide a better experience for new customers.
So by collecting those API’s, you can design the ideal customer experience and then further decrease your churn rate. Tip number two, after sending your exit survey is to stay in touch. Again, some people leave just because their credit card ran out. Or they are on a prepaid MasterCard. Or there are lots of reasons why you might not be able to collect that second billing period payment. But if we stay in touch, then we are always at top of mind. Whenever that person eventually does need your product service again, they will remember you and come back to you. So keeping in touch with them on the list by sending them weekly, monthly emails, whatever it is that you do, unless they unsubscribe, of course. Don’t send them if they unsubscribed. That’s a pretty clear indication that person is not your customer.
Part two of staying in touch is as Jonathan I believe was mentioning earlier back at the beginning of the show. If they do leave, but we want them to come as a returning client, reward them for coming back. We can send them a quote unquote veterans discount or a reactivation promotion in order to come back. And reactivate their account for a lesser amount than their initial payments. Because they’re already a customer and you wanted to reward them for coming back. That is an idea. You don’t have to implement it, but it is a way to kind of grease the wheels as it were in order to encourage previous customers to becoming again, current customers. Part number three, I said this earlier, but don’t take if someone leaves, don’t take it personally. Again, lots of reasons people leave. Don’t take it personally.
The reasons people leave can help you actually grow your business. They can help you design better systems and processes and provide better value to your customers. To ensure that people don’t leave in the future. So nothing’s ever personal in business. It’s just business. Number four clear refund policies. Super important. So when people leave, there will be haters and there will be issues. And you will have to provide refunds in some cases. But make sure that you have a clear refund policy for when that occurs. And if you provide that clear structured refund policy, they may eventually come back because they appreciate the transparency. If you make it hard to get refunds from you, all you’ll do, is you’ll get yourself a bad review on Google.
I signed up for this company and I spent a ton of money and they won’t refund me even though I experienced no value. That doesn’t look good on you or your business. So make sure it’s clear and make sure that you know, when they sign up that they understand what the terms and conditions are. The best refund policy is the 30 days, no money back guarantee, no questions asked. That’s the one that we have on our website. And that ensures that people are willing to sign up and they get past that 30 day mark. And it’s clear that they understand what the terms and conditions are. You’ll still get asked for refunds. You don’t necessarily have to honor it. I’d send it to them anyway. Just because they might come back later. You don’t know. Maybe they need the money to make a rent payment.
Jonathon: You really don`t know do you? We’re gonna wrap up the podcast part of the show listeners and viewers. We are going to have some bonus content where you’re going to finish off. Which you should be able to see on the WP Tonic YouTube channel. Basically if you want to see the shows the earliest possible, you just can’t get your spoonful of WP Tonic soon enough. That’s the best way of seeing the latest materials. I’m going to be posting a lot more video in the next six months on the WPP YouTube channel. It has over 5,000 subscribers last week. It’s growing rapidly, so we’re going to be putting some energy into that. But if you want to listen to the podcast, earliest go there. And the second thing is if you really want support the show is subscribe and give us a review on iTunes. It really does help the show a lot. I don’t care if you say I’m rubbish. I am sure you will say Adrian is fantastic. It doesn`t matter but just give us some review. It really does help the show. Adrian how can people find out more about you and what you’re up to?
: So you can reach out to me and my business Groundhogg Inc on both Facebook and Twitter. We are at Groundhogg WP on both social media platforms. Groundhogg is spelled with two g`s at the end. Otherwise it’s just felt like the animal. You can also go to Groundhogg again with two g`s dot I o a that is where you can download our WordPress plugin that will allow you to implement a lot of the strategies actually that we talked about today. The following up, the automated onboarding. And again there is an article that will be attached with this show that we’ll go through the step by step process of how to actually set up that automated onboarding to decrease or rather increase your customer retention rates. So you can also reach out through us through that. And you can reach out to me personally. My email address is [email protected] making ourselves available was one of the ways that we can increase retention. So I make sure to always ensure that I am available for your burning questions.
Jonathon: Well that’s fantastic Adrian. If you want to find out more about WP Tonic folks go to the WP Tonic. We got some great posts this month. We had a post about learn dash 3.0 a full review. And then I wrote also article about the software that you need to do Facebook live. We’ve got some fantastic articles this month. And we’re going to have some more fantastic articles this month. We’ll see you next week folks. We don`t know if we will have an internal show. But we are actually fully booked for July. We’ve got a fantastic group of guests coming on the show. And Adrian is coming onboard. It’s going to be great stuff. We’ll see you next week folks. Bye.
Ways to ensure people stay
● Ensure they see equivalent value within the first billing period
○ Be available for questions
○ Provide constant guidance and assistance
○ Automate on-boarding
○ Provide key benchmarks that “appear as value!”
○ Validate the customer experience
● Continue to provide value long term
○ Blogs posts
What to do when people leave?
● Send exit survey
○ Find out why the left
○ Collect key APIS/reasons
● Stay in touch
○ Keep them on the list unless they unsubscribe
○ Send them “veteran” promotions and deals for reactivation
○ Continue to provide value
● Don’t take it personally
○ Unless they make it personal
● Clear refund policy
● Make it easy to come back
○ Discount for reactivating
○ Instant reactivation
○ Account “Pausing
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