← Follow The Yellow Brick Road
Follow The Yellow Brick Road
How to Reduce Churn, Prevent Refunds, and Keep Subscribers for Life
00:16:17
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- [00:00]
A
How you look at retention really depends on your retention. Base is yearly. There are certain things you got to do to make sure at the end of the year that person feels good about the money they gave you. So much so that they want to give you more for the monthly. It's a little bit different.
- [00:15]
B
Active retention is okay, this guy wants to cancel, what do you do to stop him? Passive is how do you stop them wanting to cancel in the first place? Give them a reason why they would never want to do it.
- [00:26]
A
If you do something absolutely phenomenal for someone today, I've had clients say to me, just paid for Shockwave for the next five years. Three months later. But what have you done for me lately? Welcome to another episode of Special Ops Podcast. I'm Emma Rainville, your host. Here we give actionable insights to direct response marketers. I'm joined today with Shockwave Zone. Thiago. Richard. Hi. I'm so excited for today. We're going to be talking about managing retention. After marketing comes ops and this is really how you scale a business and this is how you create profitability. Richard, our very own magician, he created for you a best practices guide for managing retention. He's arguably one of the best indirect response at retention, utilizing customer service and marketing resources. So let's just dive right in. So retention, just for anyone who's listening, who doesn't understand what that means, that means retaining your customer base throughout. And so this often applies to people who are selling things online where they have a subscription service or a continuity service or something that needs to be purchased every quarter, every year, what have you. But for purposes of this episode and keeping things narrowed down, we're going to talk about retention that goes on monthly subscriptions. And so we've worked with from supplements that go on subscription, you've done a ton of work in that before you met us. But now we've also done like masterminds that are yearly and monthly. We've done treatments services, treatments services. We've done platforms, SaaS, all like all kinds of stuff for purpose of this podcast, because we can talk about annual subscriptions and monthly we're going to talk about Ignite Mastermind that we're not going to release pricing. Okay, all right. So we've got a long list of people who pay us money every year and who pay us money every month. And so how you look at retention really depends on what your retention basis. So your retention base is yearly. I'm going to put that to the side for a minute. There are certain things you Got to do throughout the year to make sure at the end of the year that person feels good about the money they gave you. So much so that they want to give you more for the monthly. It's a little bit different.
- [02:58]
B
Yeah. So I kind of break it down between active and passive retention. Passive, I think, is a lot more relevant for higher ticket products. So basically the differentiation is active retention is, okay, this guy wants to cancel, what do you do to stop him? Passive is how do you stop them wanting to cancel in the first place? So with something high ticket, you're going to have a lower success chance for the active subscription. Because if someone's decided not to give you hundreds of dollars anymore, it's a lot harder to say, hey, here's why you should give me that money still, than it is to say, okay, can you keep on giving me $50 a month or something to that effect. So passive retention is really the name of the game for masterminds there. That is what we really like to do. Give them a reason why they would absolutely never want to quit. You're giving them so much value and that's one way to do it. You are trying to pre convince them that there is no reason that they would stop doing this. It's got to be an essential for them with something like a mastermind, where it's a significant amount of their time that is being invested as well as their money. So really the, the core of it comes down to how you deliver the product. If they are happy with what. What's being delivered, if you are, and if there's a nice balance between the amount of time that you or the client is spending on delivering that service, then it's really going to help you avoid some of those conversations later down the road. If they're not satisfied for some reason, the question is, what's not satisfying them? And how do we build something that's actually a little bit more in line with what they are looking for. What they're expecting is something like a mastermind. I mean, this is really kind of critical because it's the entire ecosystem. It's not just the people who are canceling. It's the chilling effect that it has on other people.
- [04:40]
A
Right. When people cancel.
- [04:41]
B
Yeah, he goes, okay, this guy isn't surrounded anymore. Well, he was actually quite a big part of what I enjoyed about the Mastermind.
- [04:49]
A
The thing that I think a lot of people need to remember when you're on a monthly subscription and at Shockwave we have a monthly retainer, same thing. If you do Something absolutely phenomenal for someone today that knocks it over the moon. I've literally had clients say to me, oh my goodness, this paid for shockwave for the next five years, three months later. But what have you done for me lately? I want to kind of shift and talk about that and I want to be. While we're talking about masterminds, we can be specific because this goes to any type of retention. What are some things that we can be thinking about at mile markers? Month one, we generally see big fall offs. Month one, month three, month six and month 12.
- [05:28]
B
Yeah. Just to break that down, that's something that everyone with any kind of subscription needs to be looking at. Like, where do people fall off?
- [05:34]
A
What is the average percentage? First month retention? 40%, right?
- [05:39]
B
Yeah.
- [05:40]
A
Across the board, depending on industry. About 40%.
- [05:43]
B
Definitely around. Around there. It's not most people, particularly if you've got something like a trial offer that's going to really drive those numbers down. But yeah, I mean, the question is, where are people falling off and what can you give them so that you've done something for them recently? We've had quite a few memberships in the past where we roll out incentives to stick past the common fail rates. Like, okay, I'm going to unlock this bonus lesson for you.
- [06:04]
A
You unlock it. You unlock it.
- [06:06]
B
It just happens to be when you.
- [06:07]
A
Right. When the average person drops off.
- [06:09]
B
Yeah. You'll see it with like hello Fresh or something like that. They have those very specific mile marks that are going to be very much laid out based on when Stop.
- [06:16]
A
Those coffee. The mushroom coffee place. They did a phenomenal job of it because they give you free crap every month. And you know, like the months that they have, the retention is good. It's like a sticker. The months. It's not. It's like this dual froster with eight speeds.
- [06:35]
B
Yeah. Because I mean, it's a cash. Again, this is all passive retention. It's taking away any reason for them to say, well, this.
- [06:41]
A
Why am I getting this?
- [06:42]
B
Yeah, you take away that question and you have this immediately better portfolio for retention. Like, obviously numbers of retained sales, they don't look as good because there's less people trying to leave. But you keep the people, you keep them around. I don't think we can discuss the actual percentages for ignite.
- [06:58]
A
No, certainly not.
- [06:59]
B
Fantastic.
- [07:00]
A
Yo, we interrupted this pod to tell you to like and subscribe. What are you doing? Why haven't you liked. Why haven't you subscribed? Just subscribe. What's the problem? In all seriousness, subscribe so that you get notifications every time we drop new content. Additionally, if you have not signed up for our visionary vault, what the hell? Www.specialopspodcast.com Go sign up. It's free. We never try and sell you and we're putting all kinds of stuff in there to help you with the operations of your business because we're passionate about it and we want to share operational excellence with our direct response, e commerce and online selling family. But yeah, it's fantastic with Ignite. But I think the big reason why Ignite has like, I wouldn't even want to give retention numbers for Ignite Mastermind because it's so out of what anyone else's numbers would ever be. And I honestly think, okay, so you get a couple of elements. You get a few ingredients here. The first ingredients is Perry Belcher, godfather of marketing. He's been doing this a long, long time. Dude, 60 he's been doing this a long, long, long, long time. And he's been in the shoes of every marketer, every level, several times because he started over several times. So he truly understands what they want. And he spends a lot of time, probably more time than any visionary entrepreneur, owner I've ever dealt with, thinking about, what do I give to them new this month? What do I do for them this month? How do I make them better this month? And he also spends a lot of time asking questions to his people and training customer service to do the same. How is this going for you? What would you like to see? He has multiple people on staff that build community and talk to his client base to make sure. But I want to move on now to okay, I want a refund. What are some points of retention we can use to keep that from happening?
- [08:51]
B
Sure. I mean, this is really a case of figuring out your reasons for people.
- [08:56]
A
Wanting to I never signed up for this. Said everyone.
- [08:59]
B
Yeah. So that's going to be a pretty common one. So in those cases, it's really going to be a case of, well, they definitely wanted the product in the first place, so what can you do to keep them on path like they do, on some level want to be there? It's a case of figuring out they.
- [09:13]
A
Just don't want to pay for it.
- [09:13]
B
Where you can drop the price to while keeping it profitable for yourself, while keeping it effective for them.
- [09:19]
A
So generally speaking, we don't recommend dropping prices, though you can, so you can. We don't rec. None of our offers drop prices. If you can't pay, you're not a Hell yes if you're not a hell yes, you're a hell no, get out. That's how we do things. But there are people who are in the supplement space that they get the product and now you're out the money if you take it back. So you may as well drop the price to cover your cost. So there are times where that makes sense, there are times that they don't. When you're dealing with masterminds, clubs, SaaS, anything like that, you don't want to reduce your pricing because you'll reduce your room in your community. And I say SaaS, SaaS really depends if you've got like community boards and stuff like that, you, you don't want to do that. But if you're selling supplements, physical goods, info products that are one offs, it's really easy for me to say, hey Tiago, I understand that you didn't realize, first of all, the number one thing is don't argue with them. They knew or that they should have known or that they're stupid for not knowing or it's in clear print. I see this all the time. We go into evaluate customer service, we evaluate the entire business, but we get into customer service. We've got customer service managers taking screenshots of the checkout pages that the person saw three months ago and sending it to them. Like you should have read. I met you because you worked for a company that used to call their people twats for asking for a refund. No kidding. So first and foremost, I am so sorry that was your experience. That is not how we meant it. I will make sure the marketing team understands that our customer, you, Tiago, didn't see that. So perhaps we need to look at how we're marketing. That. That aside, I'm really sorry for your experience, but that aside, I really want to make your experience a good one. So if it's an info product, I'll generally take, I don't give a Fuck. If it's $5,000 in info products and you bought 100 doll, I would love to unlock 1, 2, 3, 4, 5, 6, 7 at $997 value for your $97, you'll pay nothing more. I like to give that to you in lieu of a refund so that you can walk away with a smile on your face. Because I really believe that this program is great for you. Cost me nothing to give them. Nothing. If it's a supplement, I want my money back. If I'm not going to be able to, you know, turn that around, I generally We've written ebooks and we've written content to say, hey, in lieu of a refund, we' you to keep the bottle. And we'd love to give you this free recipe book to go with your weight loss supplement to, you know, accelerate your weight loss. And if it, if it doesn't work out for you in like 45 days, you can call us back and we'll refund you anyway, they'll forget about it. That generally works. But if they're like, no, no, no, no, no, I'm adamant, I want my money back. If the bottle cost me eight bucks and it cost me nine bucks to send it to them, how about in lieu of a full refund, you keep the bottle? Because I do believe that you'll really like the results that you get. Not, I guarantee it's going to work for you. See the difference? I do believe you're going to like or enjoy the results you get. I'd love to go ahead and give you a partial refund and you just cover our costs. And so I can offer you X amount today. So we like to do that as well, just so we cover our hard costs. But particularly on physical goods and products, you kind of get the idea of what we're talking about. If you have a monthly subscription, I want to quickly dive into annual because annual is very different. When you give someone money for the year, a lot of times what happens is they forget they gave you the money and they're not participating. And here comes visionary entrepreneur. Well, I don't have to deliver the event, I don't have to deliver the content. They're not showing up for the calls. I don't have to worry about, you know, all these elements that I need to give them because they're not using it free money. And then at the end of the year they're like, oh, wait, why didn't they renew? And something I love about Ignite when we work with Ignite, because if you're not showing up for calls, which there's tons of calls, somebody's reaching out to you. We've got Hannah that calls people, we've got Angie that'll message and call people. Tricia will message you on Facebook like, hey, what's going on? What's happening? I noticed you haven't been on calls recently. And even though it's a thousand person community, we have six or seven people that are constantly watching. So if we see a whole group of people aren't using the software tools that come with the mastermind. Hey, Tiago, I Noticed you haven't been using Springboard. What's going on? What are you using instead? Oh, okay. Well, did you know that we had. So we're trying to push them into participation. The other thing. And I'll just go back to monthly for a minute. If you've got somebody using something monthly, like a supplement or something, they're supposed to a run app. We work with AI Bill Chris Luck has a phenomenal AI platform. Saves people tons of money in AI tools, and he teaches them how to use a great platform. If they're not using it, it's not going to do them any good. So if you have touch points. So let's say it's a supplement. Ringless voicemail. Hey, Tiago, I hope everything is going absolutely wonderful. I noticed that you bought insert product name here to help with support here. I wanted to give you my top three recommendations. And so if it's a supplement, we do things like, hey, just remember, take your supplement every time at the same time. Like when you brush your teeth so that you don't forget or set an alarm or little reminders throughout that really help with AI though. We do like these emails for 21 days that gets them to do something for 21 days so that they get into the habit of using it. Because I'm a firm believer if they use it for 21 days straight, they ain't gonna use nothing else. And it'll just become like, oh, okay, this makes so much sense. Save so much money. Last words on retention.
- [15:07]
B
I think the final piece, you'll be surprised by how many people are actually asking for a refund because they want some level of attention.
- [15:15]
A
Oh, that's good.
- [15:16]
B
Yeah. If your customer service is listening to them, if they're saying, I understand the problem, as you said earlier, that really does mitigate a lot of the anger there. Like non responsive customer service is going to be your number one reason why people actually cross the cancellation line.
- [15:31]
A
Yeah. That is one thing that AI is taking away and that's that human connection, particularly for the older demographics. So if you enjoyed today's episode, you know, like, subscribe, do the things. Richard has written you a best practices guide for attention. We've kind of been all over the place throwing out some ideas that feel free to put your questions in the comments. Richard actually reviews those himself, so he'll be able to answer any questions that you have. So to grab that best practices guide, just go over to www.specialoutspodcast.com. sign up for our visionary vault. We never try and sell you anything. We have tons of courses, checklists, GPTs, all kinds of stuff in there. Free for you guys all the time. We just want to add value to our community. Thank you and see you next time.