Archive for the ‘Uncategorized’ Category

Why Silent Cancellations Can Kill Your Business

Monday, August 24th, 2015



Silent cancellations will slowly bleed your business dry while simultaneously drawing your attention away from bigger problems. Why? Because nearly everyone likes life to be easy. Whether you’re running late and cutting across traffic, looking for a quick bite to eat and heading through the drive thru, or planning a weekend getaway, people are always looking for the path of least resistance.

This is especially true when people have recurring subscriptions to different services. The path of least resistance while your account is in good standing is to stay subscribed – great news for you! The path of least resistance when your account is in arrears is to leave it that way and move on – not so great news. This turns out to be a gigantic problem, because it’s nearly inevitable that most customers will have an issue with their bill processing at some point.

You might be thinking, “What’s the big problem? It’s just the occasional account that will be fixed with a quick reminder email.” That’s possible, but it’s important to realize that the issue isn’t just that a single account has gone bad:that single apple might just spoil the whole bunch.

A Symptom of Customer Ignorance

If a customer silently cancels their account with your company, it’s bad. What’s worse is that it’s a symptom of a much larger issue: the customer doesn’t understand the value they’re getting from you. If the customer knew how much money they were saving, or how valuable your service is, or how their life is improved by subscribing, they wouldn’t let their account go stagnant.

This may seem small at first, but it really is the tip of the iceberg. If this customer doesn’t understand the value, that means you’re not actively communicating it. If you’re not actively communicating it to one customer, that means there’s a good chance that other customers are just as ignorant. If other customers aren’t aware, that means that this silent cancellation that seemed insignificant is actually the first of a creeping wave of cancellations.

This is why it’s so important to address this issue as soon as possible. Unless you do something about it, every month that goes by means increasing numbers of silent cancellations, which spiral out of control quickly.

Irreversible Loss

Every product in the world has a very specific addressable market size. Even the largest technology companies that have billions of users have an addressable market size defined by people who have access to the Internet. These types of numbers are used in calculating the total market potential for many companies.

Now, it’s probably safe to assume that you’re working with a smaller number of customers than the Internet giants. Let’s say there are 1000 people who would theoretically want to purchase your product.

Hypothetically, let’s say that you lose a customer through a silent cancellation. The first thing to realize is that it’s going to be very difficult to win them back. As we addressed earlier, the path of least resistance is the one people normally take. Even when they get an email from you notifying them of an issue with their account, the easiest option is to hit the Archive button and move on with their lives. Some customers will fix their account, and some won’t. Those that don’t fix their account will decrease the addressable size of your market.


What this means in concrete terms is that while you started with 1000 potential customers, you now have 999. One-by-one, they tick away. It’s not linear though – with every customer you lose, you lose potential referrals and potential opportunities to cross-sell them on other products or services. It’s a ripple effect. These are dollars that you could have kept if you had proactively managed your customers’ success, but now they’re dollars that aren’t going to be returning anytime soon.

Need to find out which customers are at risk of silent cancelling their accounts? There are three surefire ways to find out. Learn them now.


No Two Cancellations Are Alike

You might wonder whether silent cancellations are worse than regular cancellations. Unfortunately, the answer is yes. Compared to regular cancellations, silent cancellations are missing a number of features.

If we look at the anatomy of a standard cancellation, there are a few elements that stand out. First, the cancellations are proactive. Second, there is a conscious intent behind the cancellation. Third, there’s typically some warning that the cancellation is about to happen. When you move from a standard cancellation to a silent cancellation, you lose each of these elements. Sadly, these losses are substantial.

Loss #1: Proactivity

When a customer decides to cancel their account, they do it actively. This means that they see the account they currently have, decide they don’t want it anymore, and then take steps to end the account. Compared to silent cancellations, this is surprisingly great: it provides a real metric of dissatisfaction that can be used to make changes in a product. This is contrary to silent cancellations, which at best are a signal that your customers are apathetic.

Loss #2: Intent

When a customer decides to cancel an account, the decision is usually based on clear reasoning. It might be that they’re unsatisfied, or it’s too expensive, or they’ve started using a competitor. Whatever the reason, there’s an opportunity to learn from their dissatisfaction and make changes before the cancellation is finalized. This is regrettably unavailable with silent cancellations.

Loss #3: Early Warning

Lastly and most importantly, regular cancellations provide an opportunity to communicate with your customer. When a customer begins to take steps to cancel their account, you can intercept them before the account is truly closed. This is the opposite of a silent cancellation, which can be unexpected and has already happened before you had any idea it was happening.

Distracted by Incremental Gains

Regardless of the type of cancellation, each cancellation needs to be addressed in some fashion. If a company doesn’t have an automated system in place to reduce the number of silent cancellations, you’ll be stuck manually figuring out a solution for each silent cancellation.

On a practical level, this means that time is being wasted treading water and keeping customers around rather than using your time to grow your business. Instead of building new features, designing marketing campaigns, hiring great new employees, or the thousand other things you can be working on, you’re spending time playing whack-a-mole with a problem that should have an automated solution.

While each time you reconvert a silent cancellation into an active account seems like a victory, it’s more like a draw. You’ve saved a customer, but by focusing on incremental gains you’re setting yourself up to lose ground on a larger level.

The Final Prognosis

Unless you begin to take the initiative and work to prevent silent cancellations, you’re going to be in for a world of hurt. You’ll find yourself with fewer customers, with less insight into what customers want, with time being unnecessarily wasted, and with a slowing growth rate. To be concise, there’s only one prognosis when silent cancellations are shrinking your customer base: the death of your company.

Understanding What Defines Your Most Valuable Customers

Monday, August 10th, 2015


Knowing how valuable your customers are is incredibly important. It’s not just about how much money they send your way every month. It’s also about who they are, what their future plans are, and what they bring to the table aside from money.

Understanding customer value might seem trivial, but when you go beyond looking at the raw numbers on a spreadsheet and begin to get a better understanding of your customers, you reap unexpected benefits.

For example, knowing which customers are most valuable helps prioritize customer feedback, it allows you to plan your strategy around the most important clients, and provides a way to focus your marketing on acquiring new and more valuable customers. These examples are just scratching the surface, but there’s already a clear theme: when you understand what makes your customers valuable, you’ll be able to focus on the things that really matter.

Knowing that some customers are more valuable than others is the easy part – the hard part is figuring out what makes a customer valuable to you. It’s radically different for every business, and it’s going to take some time to get the formula just right. To help speed this process along, we’ve gathered the most important criteria you should be using to define your most valuable customers.

Want to learn the quick and easy formula for defining simple customer value? We’ve got you covered!

Defining Value:

Who They Are:

To start, you should research your customers’ brands and position in their market. While company names might all seem equal in a row on a spreadsheet, companies have reputations that extend beyond how much money they make. This can be both good and bad. On the upside, having their logo on your landing page could be a big selling point when trying to reach their competitors. Similarly, some companies have bad reputations, and you’ll want to distance yourself. It’s important not to overlook or dismiss these hidden reputations.

What They Bring:

Customers bring money: that’s what makes them customers. But there’s more to this relationship than just dollars in the pocket. Beyond simply looking at the money, you should be looking at two other key areas when searching for valuable customers: referrals and feedback.

With referrals, many customers bring their weight in gold by referring other customers with much larger wallets. Because this value isn’t directly tied to how much money the referring customer is bringing in, it often gets overlooked when prioritizing customers. This is a mistake: even if a customer is only a company with a couple of people, the fact that they’re successfully referring customers many times their size increases their overall value to you. In the short-term, you may take a loss by subsidizing the smaller customer, but it can pay off in spades over the long-term.

For feedback, many customers contribute to the bottom-line by sharing sharp insights into how the product can develop. While you may have a great understanding of where your business is headed, it’s nothing without feedback from your customers. Sadly, many people don’t willingly provide feedback, which can make it difficult to plan a product roadmap that’s focused on fostering customer success. By putting an emphasis on the value of feedback, you’ll begin nurturing a cycle where customers give you feedback, which makes you treat them better, which fosters better and better feedback. The value of this feedback can’t be understated.


What They Take:

It might seem counter-intuitive, but customers also steal value from you. Sure, they might technically be paying at the same rate as all of your other customers. But as we’ve seen, money isn’t the only measurement of value.

When evaluating how valuable a customer is, it’s important to look out for any untallied costs. These can show up in support tickets, where customers are asking unnecessary questions of your customer support staff on an hourly basis. Or, it could be that they have somehow forced an integration that is costly to support and only benefits a small number of customers. Where these costs hide changes depending on the organization and the types of products being sold. What doesn’t change is that there are always hidden costs.

It’s also important to look at how much is being spent to acquire customers. Most people understand that if you spend $100 to acquire a customer and they only spend $1 every month, it’s going to take some time to be profitable off of that customer. What many people don’t realize is that the cost of keeping them as a customer should be added onto the acquisition cost. If you find yourself investing a significant amount into keeping a customer after already spending a large amount to acquire them, it may be worth asking how much value they’re really bringing to the table. It might be less than you think.

This doesn’t mean you should start ignoring or disrespecting less valuable customers, but it is important to not be ignorant of where you’re spending your money.

What The Future Looks Like:

What we’ve examined so far hasn’t required a large amount of hands-on research. This is great, as it means defining valuable customers is a small investment that immediately pays off. Sadly, this is only a surface-level analysis. This will be fine for many companies, but those that want to truly understand what makes customers valuable need a deeper analysis.

This analysis centers on the future of both what you’re selling and what your customers are planning. To begin, learn through research and interviews what the future of your customer’s business is going to look like. Are they about to release a new line of products? Maybe they’re expanding to a new region. If you can accurately predict how much and where they’re going to grow, you can begin to plot how valuable they’ll be over time.

Then, look at how much value you’re going to be able to provide to your customers if they grow. For many companies, just because a customer is growing doesn’t necessarily mean they’ll be spending more on a particular product. This is especially true if there is a ceiling to the number of people a product is designed for, or if there’s better pricing in bulk from competitors. More common, however, is that as the company grows, so will their monthly payments to you. This is great news, because it means that you can focus on solidifying the relationship early and not have to worry about losing them as a customer once they scale.

This type of analysis can be time-consuming, but it’s something that any company should be able to handle. It’s as simple as asking your customers what their plans are and then taking an objective look at their market.

Ready to put what you’ve learned into action? We’ve created a cheat sheet with a formula to let you start quickly calculating customer value. Grab your copy now!

Final Thoughts

Customer value can change how you do business. If you focus on learning what your customers bring to and take from the table and how your products align with their future growth, you can begin to prioritize some customers over others. This is vitally important for both planning out your strategy and making sure that the most important customers are the ones getting their fair share of hands-on attention.

Don’t just talk to your customers. Know how they feel.

Tuesday, June 17th, 2014

One of the best parts of Retained is what we call Sentiments. It’s awesome to give your customers great support when they ask you questions, but you should be talking to them before they ever talk to you, because customers usually only come to you for support when something is seriously broken or confusing. And sometimes, they don’t come to you at all, and they just cancel their account instead.

With Sentiments, your customers are asked how they feel about your app from time to time, and they can pick how they feel and optionally provide a reason why they feel that way. This is a very powerful way to see cancellations coming before they ever happen, so you can reach out to customers before they ever get frustrated enough to leave.

To your customers, they look like this:

Retained Sentiments


And inside of Retained, you get an overall view on your dashboard, like this, which you can use to drill down into individual customers and see why they feel the way that they do.




Something that we didn’t realize before we put this feature into production was that our users would use the opportunity to let us know about issues that they were having, but didn’t feel was worth opening a support request for. We’ve already been getting great comments about things that people are having issues with, things that we should add, and things that they like. The thing is: we have support links on the top of every page of our apps. Our customers could have told us any of this at any time, but they didn’t until we asked them.

So, take some time and ask your users how they feel about your app (or specific features of your app) on a regular basis. You just might be surprised at the conversations and insight that comes out of it.




Don’t be like American Express.

Tuesday, March 25th, 2014

Recently, we got an email from American Express with the subject line: “Call to experience simpler statement reconciliation”

Firstly, that subject line shut my brain down. When you contact customers, you’re already interrupting their day. Don’t make them work to figure out what you’re talking about. If you’re making monthly statements easier to read (which they are), just say that.

Of course, we’re not going to call them. We have more important things to do than sit on the phone with American Express today, and we know that they’re just going to use the opportunity to try to sell us something else that they offer (why else would we have to call a human to get this enabled?) They don’t respect our time. No customer wants to be told “Hey! We just gave you some more work to do, isn’t that great?”

Don’t intentionally cripple your product to make it more attractive for customers to “upgrade” to the non-crippled version. Customers generally realize when you’re being shady, and that clouds their view of you forever.

Don’t hold new features hostage and make a customer call or click a button button to activate it, unless it will cause an interruption or major change in their service. In that case, you need to let them be in complete control, like Linode does when they announce RAM/Disk space upgrades. When you have a pending upgrade from Linode, they give you a button that you can hit whenever you want to to kick off the upgrade process yourself, because your server will be shut down for a bit while it’s upgraded.

Just make your product better over time, and then tell your customers that you did. They’ll appreciate there you are always improving the product, that they heard from you about it, and that you respected their time.

We use the Since You’ve Been Gone feature in Retained to tell our customers how our apps have improved when they log in, and then they can dismiss it and go about their day.



Your App Is Not The Most Important Thing In Your Customer’s Life.

Thursday, March 13th, 2014

I’m super excited about the products that I build. I’m happy to know that something that I built is saving people time, making them more money and just helping them out in general. It means the world to me to hear back from happy customers who love my products.

I’m especially glad when I can write to a customer and tell them that a requested feature is now available. The other day I emailed a Stunning customer to tell her that something she’d asked for was now available for her to use, and she didn’t email me back for a few days. In the meantime, I started thinking things like, “Man, I hope she still wants this feature”, or “Why hasn’t she responded yet? I really expected a quick, excited response from her because she asked specifically for the thing I just finished building”, or “I wonder if I took too long to add it and she’s frustrated with me”.

After a little more thinking, I realized that my product is super important to me. It’s one of the most important things in my life. My product is important to my customers too, but its importance pales in comparison to their own products and the other things in their life. I have no way of knowing whether or not she got my email on the worst day of her life. Maybe she was just swamped, or just didn’t feel like replying to it. I was looking at the situation as if she’d drop everything and exclaim about how happy she was that I added the thing that she asked for. That was pretty selfish of me. Eventually she did reply, and she was happy and grateful that the new feature was added. However, by then, I’d made a choice within myself that even if I never heard back from her, I’d be happy that Stunning was a better product because of that feature. So I was happy either way.

As a bootstrapper, I live and die by my products, and my customers’ happiness is of paramount importance to me. That doesn’t mean that I should be expecting praise or congratulations for everything (or even anything) that I do. I should be finding the delight in making life better for my customers, one customer at a time. It’s something I’m constantly working on.

Adding requested features to your product is a great way to increase customer happiness and therefore retention (because happy customers stick around for the long haul), but don’t let their lack of response to your feature announcements get you down. If you know that your product is better because of the new feature, be happy about that. Your app is not the most important thing in your customer’s life.