Baird Hall: How to Fix Churn in Your Business

Churn is a challenge that every business faces, but it's not insurmountable. By understanding the reasons behind churn and implementing effective strategies, you can minimize customer attrition and keep your business thriving.

And that's what we aim to do in this episode with our guest, Braid Hall of Churnkey, who has helped many companies boost retention by 50% or more. 

Braid provides insights into how to analyze the unique factors driving churn in your business and deploy impactful solutions. These solutions include optimizing cancellation processes, launching precisely targeted retention campaigns, and establishing proactive customer success programs—all aimed at transforming subscribers into long-term, loyal customers.

Don't let this opportunity slip through your fingers. The expert advice and strategies shared in this episode can be a game-changer for your business. Tune in and boost your retention efforts today! 

Specifically, this episode highlights the following themes:

• Analyzing unique churn drivers to identify root causes
• Optimizing cancellation flows to save more customers 
• Baird's proven playbook and strategies for reducing churn across multiple startups

Links from this episode:

• Know more about Baird Hall: https://www.linkedin.com/in/bairdhall
• Learn more about Churnkey: https://churnkey.co

Want to give your podcast the boost it needs to stay ahead of the competition? Check out honestpodcasts.com and take the first step toward achieving your podcasting goals!

And if you have a guest in mind who you think would be a great fit for this show, drop me a line at hello@honestpodcasts.com. 

Chapters

• 0:00 Introduction
• 0:44 About Baird Hall
• 2:09 The story of Churnkey
• 4:07 Recurring revenue attraction
• 8:02 A balanced perspective on equity distribution
• 12:47 Company shutdown due to financial constraints
• 18:32 Customer support crucial for freemium success
• 20:47 Churn discovery impacted valuation; lessons learned
• 27:11 80% of customers returned after pausing
• 30:14 Selling to businesses requires relationship-building
• 32:54 Sales is about solving core problems, not transactions
• 34:55 Analyze different metrics and business models
• 38:29 Building relationships for effective churn fighting
• 42:24 Takeaway

Transcript

Baird Hall [00:00:00]:

The price that somebody pays for Churnkey upfront, it's always going to be lower than the actual value they could get later. So we want to get them started. We want to solve their initial pain points of why they come to us. It's usually around the cancel flow or the failed payment recovery, the really effective churn fighting methods. It's not why they came to us, but it's something that we find. And so it really turns into that kind of collaborative relationship where we can expand them into different products and save them more money than they thought initially.

Travis Albritton [00:00:31]:

Welcome back to the Honest Marketing podcast, where you learn proven strategies to grow your business without selling your soul. I'm your host, Travis Albritton. And today I got to take a trip down memory lane and reconnect with somebody from a previous business, previous career. Baird Hall, who is the co founder of Churnkey, which is a agency company that works with subscription businesses to reduce churn, increase LTV for their clients. And we talk about his professional journey and the different businesses that he set up and the lessons he learned with each. And then also dig into the nuts and bolts of why reducing churn is such a critical component of building sustainable revenue in your business. Because it doesn't matter how much you are growing, it doesn't matter how many clients you're getting, how many customers you're getting. If you have just as many leaving out the back door every single month.

Travis Albritton [00:01:21]:

You can't grow, you can't build momentum, and you're just fighting the inevitable of just being exactly where you are and not being able to reach your goal. So, really appreciate all the things that Baird shared in this interview. Definitely stick around to the very end. Well, I'll give you my number one takeaway from my conversation, but here it is. Let's dive in. Baird. Welcome to the podcast, my friend. Good to see you.

Baird Hall [00:01:39]:

Hey, Travis, thanks for having me. It's been four or five years, I think, since we chatted. It's good to reconnect.

Travis Albritton [00:01:46]:

Yeah, it's funny, know, life works like that. Like, you connect in one place, in one season of your professional life, and then through just random happenstance, you end up crossing paths again. So we'll dig into some of that here in a little bit, but I'd love for you to just kick off by sharing a little bit about yourself, your professional background with startups in the SaaS space, and then tell us a little bit about what you're working on right now.

Baird Hall [00:02:09]:

Yeah. So, Baird Hall, I've been starting software companies since 2015, and the first start was pretty rough. We tried to build, essentially, if any of the listeners are familiar with Clubhouse, which is like a new social listening type app. We tried to build that back in 2015 before investors even knew what podcasts were, and it was a total disaster. It was a lot of fun, but from a business standpoint, it didn't work out. So that's kind of where we got started as our first crack at building a software company. And luckily, some of the tech that we had built rolled into a podcast marketing company called Wave, which we scaled up and sold in 2021. I've also started a video editing and captioning SaaS product, which I still own, called Subtitle, and then most recently working full time on Churnkey, which is a company that was built out of all the churn fighting that we did over the years, and a lot of the things that we have learned and built internally for the previous companies, we kind of packaged it all up and now full time, we help high volume subscription businesses improve their retention and fight churn with a couple of different tools.

Baird Hall [00:03:19]:

I've been trying to figure out the best way to explain Churnkey to people, like at happy hours and cocktail parties, whatever it is. And I think the best way to explain it is if you've ever gone to cancel a subscription, which is everybody's done this now you go to the cancellation page to cancel a subscription, and they say, wait, are you sure you want to go? And they ask you a couple of questions, and they try to save you with that perfect offer. That's what Chernkey does behind the scene. We power cancellation flows for really high volume subscription businesses. So it's been a lot over the last seven to eight years. We've jumped around quite a bit, but just kind of following the trail that was put in front of us each.

Travis Albritton [00:03:55]:

Step of the way, for sure. Well, like you mentioned, you've started several businesses, online businesses, and from what I can tell, they're basically all SaaS products. What is it about that way of approaching business software as a service that really appeals to you, where you keep kind of coming back to that, as a business model, meeting different needs, serving different kinds of clients, but always with that kind of recurring revenue business in the what's the benefit of that? What keeps drawing you back to that?

Baird Hall [00:04:26]:

Think the selfish benefit is the predictability of subscription businesses. Actually subtitle our video capturing business. We released that early on, and it was a pay per use model. So the more minutes that you purchase and spend over time, you would pay them as you used them up, almost kind of like an old school phone minutes bill or minutes card for a phone. And it was a great business. But the problem with it was it wasn't predictable. One month we would have a ton of sales. The next month we wouldn't close many because those customers were still using their minutes.

Baird Hall [00:05:03]:

And it was just very lumpy. It was hard to plan from a marketing standpoint of how to invest in resources, how to hire people when the business is unpredictable and up and down. And so when we moved to the subscription model, we had to add a couple of extra features for it to make sense as a video editing subscription. On top of just captions. We were doing less revenue per month, but it was predictable because we could look at our average turn rate, our average growth rate, and then we could actually start investing in the business and we could hire people. And it derisks things a little bit. So I think we prefer the predictability of it and the calmness, which is not, that's probably not the right term because entrepreneurship can be so crazy regardless of the type of business. But subscription businesses, when designed, right, they can feel much more calm and predictable because you know that you can count on a lot of that revenue coming back.

Travis Albritton [00:05:59]:

Yeah, calm is always a relative term with entrepreneurship.

Baird Hall [00:06:03]:

Right. When I said that, I was like, oh, gosh, that's not right.

Travis Albritton [00:06:06]:

No. But for everybody listening, whether owns businesses or they're in marketing, they totally understand. It's like you're choosing your battle, like you're choosing to not just work for somebody else and cut a paycheck, like you're trying to build something. And there's always going to be a certain amount of risk involved in that. But the more that you can destress your day to day, like how you approach the business and how you long term plan, because cash flow prediction, that's huge for investing in overhead and in personnel to run the business, especially if it's a high overhead, services oriented business. You got to know what you're going to make three months from now in order to plan for that. So you know you'll have the money.

Baird Hall [00:06:50]:

For we came a lot of the co founders that every cap table has been a little bit different from all of our companies, but this all kind of originated. We all worked together in a services business here in Charleston, and we did product and development work for other software companies, and we enjoyed it and it was a great company to work for. But we saw a lot of the downsides of the services model and just personally, it was not a good fit for us and what we wanted to do, we felt much more like creators versus consultants and deliverers or operators. So I think that's kind of what spurred it. And then it became such a great fit that we stuck with it as.

Travis Albritton [00:07:28]:

Much as we could. Now, you've said our a few times describing these businesses. Has it been the same group of co founders for each of these different businesses? Or talk to me about that, because it's not uncommon for businesses to have co founders. But if you've been able to maintain a consistent group of people that builds collective wisdom over time, then you can really accelerate the things that you learn and applying them to the next business. So I'm curious about your experience with co founders.

Baird Hall [00:08:02]:

It's been interesting in that every company does not. None of our companies, we've built five over the last eight years, none of them have the same cap table, but every one of them shares some similarity with another one in the cap table. So good example is one business, one of the co founders has just had their second kid, and they just could not take on the risk anytime that year. So they sat that one out, but then they came back for the Newton. They're now on the Chernkee team. So it's been kind of this rotating roster that in the time and place, when the company is getting started, we all kind of look around and see who's available, who wants to take the risk, because we've always taken the approach that equity in an early stage business is compensation for risk. So if you're not willing to take the time and the sweat equity or put in some money, then you don't get as much equity. And so we've always had this just really fair approach, and it's wound up just in hindsight, it would have been really amazing if we had known all this was going to happen.

Baird Hall [00:09:06]:

We could have created a holding company, and then everybody owns a part of that, and then each product has like an LLC subcompany. And we could have done this kind of umbrella structure. But we've just been figuring this out as we've gone, and so we've just had to look around at that time and moment and see who's available. I'm the only one that's on every one of the cap tables, and some of them majority minority. So, yeah, it's been really interesting. And I wouldn't say we designed it or drew it up this way. It's just kind of how it worked out. But I'm extremely lucky and I use the word hour all the time because it is a collective group across the board.

Baird Hall [00:09:46]:

And I've been so lucky to have just great co founders and extremely high levels of trust, which as I look back on what makes a great co founder, that's really the one thing that just, it has to be there, the trust. You're basically sharing bank accounts with other even had, I've even had co founders actually in Chernke, Scott Hurf, who you all can find on, he runs our podcast and it's a great LinkedIn page if you want to look him up. We actually worked together for a year and a half without ever meeting in person. We just met last summer for the first time. And so again, just going back, I trusted my other co founders that he was going to be the right partner, and it turned out he has. And so it's been a really interesting collection of people in different situation over the years, but we're making it work.

Travis Albritton [00:10:36]:

Yeah, that's the world of remote work for sure. Everyone's got a distributed team now where especially if you're in an online space or have an online business, because then you can work from anywhere and you can hire from anywhere, which is really.

Baird Hall [00:10:51]:

Covering. We've got a partner in London. Scott, our chief product officer, is in San Francisco, sorry, he's in Santa Monica. And then Nick, my other co founder, lives about 400 yards away from me. So we just have a weird spacing set up.

Travis Albritton [00:11:08]:

Yeah, for sure. Now, before we jump into Churn Key, I want to talk about Wave for a second, simply because that's the company that I have the most personal knowledge about. From when you were working on Wave, I was working at Buzsprout, and so there was certainly some overlap there. And the thing that I want to ask you about with Wave is one on the product side, but then also on the business model and how you kind of evolved it over time. What was the initial problem that you were fixing for podcasters when you initially started Wave? Back in 20 17, 20 16, 20 17 as a product, and this was at a time where podcasting was starting to gain traction, but really hadn't hit the COVID just massive acceleration yet. What was the opportunity that you spotted and what was the problem that you were solving with that product?

Baird Hall [00:11:58]:

So a little backstory on that. The company we had built before, which was a social audio network, we had a lot of users that were recording audio clips and talking to each other about different topics. We were trying to build like an audio version of Reddit was kind of the idea back then, and we had this problem that all of these users were leaving a one to two minute. We're calling like little mini podcasts, and the content was fantastic. Some of these guys were really funny or really smart. And our thought was, well, if we could just take this audio and put it on Instagram or Facebook or LinkedIn, other people could see how much fun people are having on our app and they'll click through the link to go download it. So Nick spent a weekend building kind of what was the early versions of Audiogram is kind of the term that was starting to come out. And we built it and started using it.

Baird Hall [00:12:47]:

And after two to three months, we had to shut that old company down because we just ran out of money. And about the same time, though, podcasters were seeing our post on social media and saying, I don't want anything to do with your app, but how'd you do that? How did you make the audio waveform on Instagram? And that's kind of the light bulb went off and we're like, oh, man. Because we had a lot of podcasters that were users of our app. And so we shut the company down. The next month, we launched just a really basic version of the audiogram generator, and we got our first customers within two weeks. And it was a slow grind of customer acquisition early on, but that's where the whole idea came from. And then it was pretty easy for us to build some templates out and let customers just share audio really quickly, and they paid a few dollars a month. But what we found out was, and this was kind of our entrance into the creator industry, is that these podcasters really wanted to look different and stand out from other people on social media because it was their brand.

Baird Hall [00:13:57]:

This is kind of early influencer days. We were just really starting to learn about that whole world. So when we built functionality for our podcast users to customize their design with like a drag and drop canva like interface, that's when it started clicking and it became less about the audio being shared and more about letting the podcaster create a brand around their audio that's being shared. And then that's when the pricing model really started working out. Because we would let customers save a certain number of designs, we would have kind of pro style templates that they could use that would look way different than others than our free users. And then the audio animation, we really focused on creating very unique audio animations, so much so that they could interact with the design. So like circles and swirls that would move over a circular logo. So, when we really dialed in on this idea of customization and making sure that all of these assets looked really good at the end of the day, that's when it started taking off, because it just stood out from all the competition.

Travis Albritton [00:15:05]:

Yeah, there's really three big pillars with podcasting. If you're thinking about the core problems that podcasters face. One is how do I keep it going? And kind of like one A and one B are how do I grow my audience and how do I make money? So, wave was really well positioned to help solve that second problem of how do I grow my audience, which is, how do I convert audiences and people that I have connections with on social media into podcast listeners and engage in the long form content by promoting shorter form content. What I'm curious about is, with Wave, you had a freemium subscription model, right? There was a free plan that people could try out, and then the business plan, the way it made money, is that eventually a certain percentage of them turned into paid subscribers. What was the strategy there? How much of your marketing was devoted towards driving free sign ups? How much of it was driving awareness of the pro and premium features? But then, kind of as an aside, saying, oh, but you can try it for free if you're not sure. And then what were some of the strategies that you used to convert free users into paid subscribers so you can build that MRR and the backbone of the business, so to speak?

Baird Hall [00:16:19]:

Yeah, you're getting at the hardest problems that we worked on. That and churn, because the way that we set it up resulted in a ton of volume, and then we had to go fight churn all the time. But basically, the way that we structured it is we focused heavily on the freemium model and driving as much traffic as we could to that free trial, the freemium plan. And we tried all the different variations that you had just mentioned, and what we landed on that was the most effective, was a completely free plan where you had a limited number of videos per month. And then the key for us was the watermark, because customers, that's really what we found, split our free and our paid customers was whether or not they would be okay with the watermark on the video, because there were a lot of free users that they were totally fine with that. They just wanted to get it out. It looked good. And, oh, yeah, sure, there's a little logo there.

Baird Hall [00:17:17]:

And those really weren't our best customers. Our best customers were the ones like, no, this is my brand, this is not yours. And I'm willing to pay to have that taken off. So essentially, that was really kind of what drove a lot of the conversions, and it worked really well, and there's always going to be some customers that kind of felt like that wasn't the best way to do it. But the numbers over and over again told us that those customers that converted with the watermark, they were healthier customers that stayed longer term versus doing it based on certain usage or different features, things like that.

Travis Albritton [00:17:54]:

So I want to follow up on that because that is a big problem with any kind of subscription model. And we'll get into the churn piece here in a second. I'm going to pick your brain on all that kind of stuff, but trying to figure out what is that balance of not turning people off with the product decisions that you make but incentivizing the right behavior that's in their best interest in addition to yours and having those incentives align where if they're really serious about your products, my guess would be the 80% to 85% of all your customer service requests came from free customers, not from premium customers. And so there's also, like, a cost associated with those free customers.

Baird Hall [00:18:32]:

Definitely. And I'm glad you brought up customer support, because when you go heavily free on a freemium model like that and going back to the name of your podcast, honest marketing or honest business building, you need to support those customers. You don't want to just use them as a conversion tactic. So if you're going to go that route, and we did that, we had a full time customer support rep that was there, nine to five business hours, Monday through Friday, ready to help anybody and everybody, regardless of they were paid or not. And what we actually saw is some of the best. If you just looked at the free users that talked to support, that conversion rate was crazy high because they felt like they were getting the help, actually felt like there was some level of service there. So I think that's a great point to bring up support, because if we didn't do that and we just kind of hung back and just literally treated it like a spreadsheet to tweak numbers on, I don't think it would have been as successful, and I think our brand would have probably hurt long term with that.

Travis Albritton [00:19:34]:

Well, and you'll see subscription software and especially enterprise level solutions where the lower plans don't actually have access to direct customer support. It's only when you get into, like, a middle and higher, it's like, oh, you actually have someone you can talk to to fix your problems. Otherwise here's our FAQ section. Go figure it out.

Baird Hall [00:19:51]:

I've never been a big fan of using support as a conversion leverage point. It's like everybody should get a pretty good level of support, or you shouldn't be marketing to them.

Travis Albritton [00:20:03]:

Exactly. Okay. So you built wave, you grew it to a certain level, and then you were able to exit from that into Churnkey. And from what I gather, understand about how that acquisition and valuation went versus leveraging into Churnkey, these two things are actually pretty interrelated. So talk to me a little bit about that, because a lot of business owners think about, well, maybe I'll sell my company one day, but it's one thing to say I want to sell. It's another to position it as valuable to somebody else. So how much of a component was reducing churn on that product in the eventual valuation of that company? And then we'll talk about Churnkey and what you're doing now.

Baird Hall [00:20:47]:

So it was a huge component to our valuation, and we found out the hard way by jumping in two acquisition talks that started off great, and we knew our churn wasn't great, so we didn't bring it up. But it comes up when you sell a company, you go through due diligence, and any smart buyer is going to turn over every stone before they take that risk. And Churn would always come up, and it was always the red flag. And a good lesson that we learned was, if there is something wrong with your business, not only is the buyer going to find it, but they're going to use that as leverage to drive the price down. It seems simple, but at the time, it was like we were just so excited and we had happy ears, and we would always just be so optimistic. So after that second time, we decided, well, let's just get to work on our churn. Like, if we want to sell this business one day, we need to make sure that churn is in as good a place as possible. And it's kind of interesting that in hindsight, the best way to grow your valuation is to build a company that you don't want to sell.

Baird Hall [00:21:49]:

One that's automated, that has low cost, that doesn't take a lot of work, that doesn't have big risks. And when you do all these things, you wind up with a great business that you really don't want to sell. But it was kind of an ironic thing to learn that we finally get to this point and we're like, wait, should we just hold on to this for as long as we possibly can. So anyway, that's kind of an ironic side note we found when we got to work on churn, we did a lot of things. We hired consultants for 20, $30,000 contracts to dig into all of our positioning and customer feedback. We worked on UI, we worked on onboarding. We worked on emails. We hired a copywriter for tons of money to make sure we're activating customers the right way.

Baird Hall [00:22:37]:

And all those things were great. And those are all parts of the churn puzzle. And we were kind of following the playbooks that everybody that we were able to find out there that other people had written about. But the big moment that we found that our big Aha. Moment was when we started working on our cancellation flow and asking customers why they were canceling again seems simple, but it's not something people did back then, usually just had a cancel button, and that was the end of it. And then, so we would ask customers why they were canceling, and then we would ask them if they would stay for a discount. And we had this moment when we just launched it, and within a day, because I can't really remember the numbers, but it was thousands of customers going, I would say, like, hundreds of customers canceling per month at a 10% to 11% churn rate. So every day there's, like, customers going through there, and just that day, we saw 30% saved right then.

Baird Hall [00:23:33]:

And we're like, wait a second. Every customer that's clicking the cancel button doesn't. Not a lot of them want to cancel, but there's a good portion of them that actually don't want to cancel and are just looking for another arrangement. And so we kind of went from this place of thinking that optimizing your cancellation button is like, kind of, what do they call it? Not dark art, but there's dark usage pattern, like, in design that we kind of felt like, oh, I don't know if this is going to be good or not. To realizing that, oh, wait, actually, we're helping our customers find A better arrangement with us as a company, and we're doing it on a personal level. It's almost like kind of automated bartering to a certain degree that says, hey, well, we're willing to offer this much, and because you've been a good customer, we'll offer you even more interesting packages because we value your business. So it was just that aha. Moment.

Baird Hall [00:24:28]:

They're like, oh, my gosh, there's so much opportunity here in the cancellation flow to help reset expectations with customers, remind them of the value they were getting a lot of customers just, they're canceling because they haven't used your product in a month. They saw the bill and they're just gut reaction. It's a very autonomous process. And then they get to the cancellation flow and they realize, oh, wait a second, there's another option here. Or, oh, I did use this last month, and I might have a new project coming up. I'll just pause for a month. So I'm rambling at this point, but it was just this big moment where we realized this, and we found out no one else was doing it except for the big, like, Netflix would have, like, a whole team doing this. And they were real early Disney, too.

Baird Hall [00:25:13]:

But when we were talking to our peers, everybody was like, no, I don't know what you're talking about. And so our thought was, well, let's take all this and let's launch it as Cherkee, and we'll sell it to other businesses. And, man, we tried to run the same playbook from the previous companies. We're like, oh, yeah, we'll do content marketing. We'll drive them to the site. We'll have a free plan. And total disaster. From a business standpoint, this is really my last year and a half has been learning the difference between B to C and prosumer businesses and true B to B, and making that transition, which has been just one of the hardest lessons I've learned in business, because we thought we had it figured out.

Baird Hall [00:25:58]:

Turns out we don't know anything about B.

Travis Albritton [00:26:00]:

Two B.

Baird Hall [00:26:00]:

We're getting there now. So we've been making progress.

Travis Albritton [00:26:04]:

So forward transition to that churnkey, what was the difference that you noticed in LTV and then your churn rate when you made those adjustments on the cancellation link? Because you mentioned it was like 10%, which is pretty high for a SaaS product, where ideally you want to be in like that 3% range. But how were you able to affect those numbers tangibly when you started making adjustments on that cancellation link?

Baird Hall [00:26:29]:

Yeah, once we got the cancellation flow fully customized and tested it in a lot of different ways, took a couple of months, we were able to bring our churn rate down from 12% down to seven and a half, almost 8%. So it was a full 4% swing. Almost. And the biggest driver of that was pauses. And that's because podcasters do a lot of seasons and they also take time off on the holidays, and they are price sensitive, so they do not want to pay a $9 bill if they are not doing an episode that month. But they also don't want to cancel and lose all their data. So that's where pauses we did between a one and three month pause. That was our highest offer acceptance rate.

Baird Hall [00:27:11]:

And we were worried too then that we were worried that people would take a pause, leave for two months, and then forget about us and get charged and then get mad and refund or chargebacks. But turns out like 80% plus of our customers actually came back and used the product for their next podcast episode. So pauses were good discounts, obviously, for that segment. The DIY podcasters that really wanted to use us, they just needed a little. A lot of times, I don't know if they truly needed the discount, but they felt like the discount made the value proposition just worth it enough. And then technical support as well, because we would have a lot of customers that were trying to get their design exactly how they wanted it. They needed a couple of pixels moved, and they really just needed one of our support team members to look at their design. So those were the three big ones.

Baird Hall [00:28:00]:

And it turned out to be 35% of our canceling customers per month. So hundreds of those at we were probably $14 average revenue per user. You can do the math, and it's a good amount of monthly recurring revenue that when you go to sell a business is valued at anywhere between two and six multiples. So when you do the math, it was a big swing in revenue. So that's when we decided this was an important problem to go help other companies with.

Travis Albritton [00:28:32]:

So we've talked a lot about your process, your journey with wave and your previous companies. Let's talk about Churnkey here for a second. And just real quick again, because this was probably 25 minutes ago that we talked about it. What is Churnkey? What's the problem that you solve and who do you solve it for?

Baird Hall [00:28:48]:

Churnkey is a B two B SaaS company, and we help high volume subscription businesses improve their retention through different churn fighting tactics. A few of those are cancellation flows to help save customers at the point of cancellation, failed payment recovery campaigns, churn prediction retries, and we've got a few other products as well that are coming out soon. So we kind of started as just a cancellation flow tool and have been growing into a full stack retention suite for subscription businesses.

Travis Albritton [00:29:20]:

So you mentioned that going from B to C to B to B has been a big adjustment. I've noticed that too. Where my last company was B to C. My current company is B to B. And in some ways, I really love the B two B space but in other ways, it's not impossible. But it's harder to build large volume predictive models because you're not talking about hundreds or thousands of new customers every single month. You're talking about, like, single or double digits. And it's just a much different landscape as far as predicting things and then even figuring out what's the right messaging.

Travis Albritton [00:30:00]:

What niche or vertical are you going to go after within the bigger industry that you're serving? What have been some of the biggest lessons learned that you've had doing sales and marketing in the B two B space compared to B to C with Wave.

Baird Hall [00:30:14]:

I think if I had to distill it all down to one concept is that when you sell to B to C and prosumers, you're selling to people and you're really driving a person to a landing page to make a decision, and they are looking at something and they are deciding, do I want this, yes or no? But when you sell to a business, you're selling to usually not just one person, but you're selling to a group of people that they all have to decide, should we do this? And those two processes could not, I mean, they could not be more far apart. So what we've had to just continually remind ourselves in B to B is it's really about the relationship. And you got to pick up the phone and you got to talk to people. Where in B to C you can just put up a landing page, run some A B tests, figure out what the trends are, and press go and iterate as you go where? With B to B, the feedback loops are much slower because you actually need to have these conversations, sometimes not with one person, but sometimes with multiple people. And for whatever reason, this was just really tough for us. Maybe because we felt like we had a lot of success the other way and that we could take a lot of these playbooks and run them in the B two B space. But we have just kind of slowly been adjusting to it, and now we're in a really good spot. We're a sales driven organization.

Baird Hall [00:31:39]:

We do a lot of content marketing, but it's really all to support the sales process. And now we are spinning up a customer success division that is now taking the handoff from sales and building that relationship even further to help sell more products and make sure customers are happy and healthy. Which customer success in our previous businesses was not a thing. Chernkey is actually interesting. It's kind of like simulating customer success at scale for B to C companies. But in B two B, you actually need to have a customer success team and somebody reaching out and talking to customers. So, yeah, it's been totally different, but we're growing to really love it because my job now basically is every day I get on a call with two to three SaaS operators that are struggling with Churn, and they have a lot of pain, and they're trying to figure out this really complicated problem that we've just been doing for such a long time. It feels like the feedback loops are slower, but they're more profound when you can actually help somebody figure out their biggest issues on a 45 minutes call.

Baird Hall [00:32:50]:

So, yeah, it's just been very different, but it's been a lot of fun.

Travis Albritton [00:32:54]:

Yeah. That service as sales is the thing that I love the most about B two B, where it's really not about the transactional element of how do I get this person's credit card so I can charge them $10 a month. It's much more about what is the core problem that you're dealing with? And if I have the expertise and my business is designed to help you, let's figure out how do we make this work, because this is really costing you a lot. And if I can come in and serve you and help you, I want to make that happen. And so it becomes much more like you're on the same team fighting the battle together, instead of the more traditional way that people think about salespeople, which is combative, and they're trying to take advantage of me or make me make a decision that it's not in my best interest. Where you've really solved a huge need. That is a very felt need with a lot of business operators and Saas companies, where Churn is one of those key metrics that they look at every single month and think, how much more could we have made if we hadn't churned so many of our customers? What are the mistakes that you're seeing? The common mistakes that you're seeing with businesses that have higher churn than they should, where you come in and right away it's like, here are the red flags that we see that we need to address first and foremost to get you back to baseline.

Baird Hall [00:34:05]:

That's a really good question. It's tough because there's just so many variables. I would say the shortest answer, well, the thing that we have to do before that is look at the customer's pricing model, which this has been really interesting as we've dove into churn over the years, is a feature based pricing model versus a usage based pricing model. And then maybe put another seat based pricing model. All three of those companies are going to have very different variables and metrics that drive their churn. Usage is a really great one. Usage based models are really interesting because they have extremely high reactivation rates. So we can look at a customer like a video editing company or somebody where you're paying each month for access to credits or something like that.

Baird Hall [00:34:55]:

We can look at a really high churn rate, 1517 18%. But if we can jump in their stripe dashboard and take a look at their reactivation rates, if those are over 20, that's where we're seeing like, okay, you're just missing. There's a gap here in between customers canceling and then coming back. That's where kind of going back to the pauses or discounts. So it's really just diving into the business model that they're using and then looking at all their different metrics and trying to figure out what's out of the norm from them. B Two B is a good example where B two B is going to be much more of three to 1% to 5% churn rates if your average revenue per user is over $200 plus. So those customers, it's much less about the numbers and metrics and it's more about the feedback that customers are getting and the opportunities where somebody can jump in to be really helpful. So I think that's probably what we probably need to do a better job of documenting all these different use case because there are trends, but they're very specific to different pricing models and industries.

Baird Hall [00:35:55]:

The one that just really jumps out is we probably have two to three AI companies signing up a week because they are growing so fast. And their churn rates are generally between 20 and 30% for a lot of these newer AI companies, but they're growing 70 80%, so they don't really care. So the biggest red flag that we see is when a customer is not addressing that high churn, because the issue is they're going to come back to us eight to twelve months down the road when it's really a problem. And really the only customers that get Churnkey in place, like on day one, is repeat founders, people that have done this before and they know what's coming and they just want Churnkey in place early on. So a lot of times it's hard to kind of go back. You can't really fix churn after the fact. You can go back and look and find trends and data, but once it's happened, it's happened.

Travis Albritton [00:36:48]:

And then how are you addressing Churn at Churnkey? Like how are you drinking your own Kool Aid and putting these best practices together for your own B two B business to continue to serve your clients at a high level and meeting needs above and beyond what their investment level is, but also charging enough that you can profitably sustain that level of service for them.

Baird Hall [00:37:11]:

It's interesting, we have net negative churn, which means our customer base grows more than it contracts, which is something that doesn't exist in the B to C world, which that's a really big advantage of the B two B business. But we actually have had a couple of customers that have had to cancel because they've gone out of business or whatever the situation may be. And we can't use Churnkey. At Churnkey, it's kind of like inception with Stripe. Like Stripe can't have an app that then lives within our app and it just breaks the whole system. So we have to actually talk to every customer, which is what B two B companies should do. Churnkey is not a good fit for Churnkey, but I would say our biggest focus has been customer acquisition. And B Two B is hard.

Baird Hall [00:37:55]:

It takes a long time. Sales cycles are multiple months. Pricing is really hard. It's something you have to, we do a lot of custom pricing just because it's hard to just have one number on a landing page that fits for everybody. But the biggest return that we're getting is with customer success. Basically, we're kind of realizing that the price that somebody pays for Chernkey upfront, it's always going to be lower than the actual value they could get later. So we want to get them started. We want to solve their initial pain points of why they come to us.

Baird Hall [00:38:29]:

It's usually around the cancel flow or the failed payment recovery. And then as we build that relationship and we have their billing data and we understand their business more, we can actually start looking at other ways to use the product to be more effective. Because most of the really effective churn fighting methods, it's not why they came to us, but it's something that we find. And so it really turns into that kind of collaborative relationship where we can expand them into different products and save them more money than they thought initially. And we're starting to figure out our pricing to match that as well. To have like maybe we need kind of a quicker starter package to kind of get some churn tools out there. And then as you grow, you move into kind of this more platform use with our team that something else that we're launching is what we're calling proactive support. So instead of customer us waiting for customers to ping us about stuff, we have customers support reps that jump into their account and flag improvements that could be made and we send them to the customer.

Baird Hall [00:39:32]:

We're getting really good feedback on that. And it's not as expensive as like a full on services agreement. It's kind of this person that's in the background just checking on your account and sending you updates. So that's been another good tactic that's been helpful.

Travis Albritton [00:39:44]:

Yeah, no, those are all really great. And that aligns with what I've learned, but from other people that really speak well into the space, into the B two B selling space and just my own personal experiences. Once you get past the things that are outside of your control, like a business going out of business, it's like, well, we can't fix that, right?

Baird Hall [00:40:03]:

If you can't get users, you can't.

Travis Albritton [00:40:04]:

Get sales, we can't fix that for you. The number one reason that I've seen B two B clients leave is perceived indifference. That it's not even about you're not doing what you said you would do, but we don't really feel like you're invested in our success anymore. Maybe initially you were, but now we're just in another account and you've moved on to bigger and better fish. And so those kind of strategies, the proactive support and following up and giving people opportunities and clients opportunities to see other things you could do together, I think all those things communicate the opposite of that, which is you're not just another client account, you're not just another number. We actually do want you to be successful and want to do anything we can to make you successful.

Baird Hall [00:40:45]:

What was the term you used again for that?

Travis Albritton [00:40:47]:

Perceived indifference.

Baird Hall [00:40:49]:

Perceived. I like that because a lot of our customers set up Cherry, and then once it's in place, it just kind of does its thing. You don't have to really log in every day, and so we'll have customers that just kind of go away for three, four months even though we're emailing them. And then they come back one day and the expectations all of a sudden are very different for whatever reason. And it's that same kind of situation where we got to find ways to be proactive and get in front of that because it's eventually going to come one way or the other. Just reminds me of a business quote that I heard once was just the concept of I want my pain now if there's an issue here and you're not feeling great about your account, I want my pain right now. I don't want it down the, let's like, let's address this right now.

Travis Albritton [00:41:35]:

Yeah. Tell me so I can fix me. Help me help you, right? For sure. Well, Baird, I really appreciate everything that you shared, just the inner workings of what you're working on with Churnkey. All your lessons learned. Where can people go to learn more about Churnkey? Where can they connect with you online? Where are the best places for people to go and connect with what you're doing?

Baird Hall [00:41:56]:

Churnkey Co. Is if you want to learn more about Chernkee and if you want to chat with us or just get connected with us, I'd say LinkedIn is the best place. I'm pretty sure I'm the only Baird hall on LinkedIn. I checked a couple weeks ago, so you can find me on LinkedIn really easily and we're doing our best to be more engaged and just have more content on LinkedIn and easy to track down there.

Travis Albritton [00:42:19]:

Awesome. Thank you so much, Baird. Really appreciate you being here.

Baird Hall [00:42:22]:

Awesome, thanks.

Travis Albritton [00:42:24]:

So my number one takeaway from my conversation with Baird is make sure you have a conversation with people on the way out. When you have clients, when you have customers that have been with you or been using your service, using your product, and they decide to leave, have a conversation with them about why they're leaving. Don't let them just go out the back door, say, hey, what have we missed? What can we do? Why are you canceling? Because like he said, sometimes it's not that they don't want to use your service, but there are just some circumstances around their life how they're using your product and service. And if you just offer them an alternative or simply remind them about why they're using you in the first place, you can save those customers. You can save those clients and build sustainable revenue in your business. So don't overlook Churn. Don't overlook the people that are leaving your business and focusing on the shining object of new customer acquisition. Because at the end of the day, it's both those things working together that is going to help your business grow.

Travis Albritton [00:43:20]:

Make sure you check out Churnkey. Make sure you follow Baird on LinkedIn to connect with him and see everything that he's working on. But appreciate you being here. Hopefully these interviews are really insightful, really helpful. And until next time, be honest.