Leveraging data garnered from twenty three thousand recurring revenue businesses, ProfitWell’s CEO Patrick Campbell shares insights on where the SaaS world sits going into 2021, including benchmarks on how growth and retention faired throughout COVID. He’ll then walk through a tactical playbook on the retention levers the fastest growing SaaS companies are using to accelerate in a market that continues to get denser and more competitive. You’ll leave with specific takeaways to implement or hand off internally - all backed by data on what definitively works.

1. Subscription
Retention in 2021
State of SaaS 2021
The c-suite guide to retention with benchmarks from 23.4k companies
Patrick Campbell
Founder & CEO
ProfitWell
@Patticus

2. Give you a framework and
benchmarks to re-evaluate
your retention strategy.

3. This material will increase
your customer lifetime value
between 10% and 60%.

4. –Some hotshot
“Cute. Why should we listen
to you preachy man?”

5. 5
Not me. We follow the data.

6. PW builds revenue and
retention automation products
for subscription companies.

7. Brought to you by
PROFITWELL METRICS
Free, accurate, real time
financial metrics for
subscription businesses.
Two minute integration
with:
• Stripe
• Zuora
• Chargify
• Recurly
• Braintree
• Chargebee
• ReCharge

8. of the market
25%

9. Churn Insights
ribution Data
Financial Data
Unit Economic
Price
Survey Data
Willingness to Pay
In-App Usage
Drastically reduce churn
RETAINTM
Audit proof revenue recognition
RECOGNIZED
Proprietary pricing software and
services for monetization
PRICE INTELLIGENTLY

10. 10
Let’s jump in.

11. –David Cancel, Founder at Drift
“If you don’t have retention,
you don’t have a business.”

12. 12
What are you trying to do as
a subscription business?

13. 13
Beauty of subscriptions is the
relationship is baked into how you
make money.

15. 15
We spend very little time and
budget on the relationship though.

16. 57% of our budget

17. 57% of our budget
0-1% of our budget

18. 57% of our budget
0-1% of our budget
5-10% of our budget

19. 19
Acquisition is important,
but not as effective.

20. 20
We built a model to isolate each
main growth lever’s impact.

21. 21
GROWTH BENCHMARKS
Impact of Improving Each Subscription Lever
Monetization and retention based growth far outpace acquisition based growth. You’re still going to
spend the majority of your time and budget on acquisition, but should invest in other areas, too.
%
IMPACT
ON
REVENUE
SOURCE: 2020 STUDY ON COMPANY UNIT ECONOMICS
0%
5%
10%
15%
20%
ACQUISITION MONETIZATION RETENTION
2.0%
2.4%
3.4%
2009 - 2012 2013 - 2016
2016 - 2019
N
1.4k
PILLAR OF THE BUSINESS

22. 22
GROWTH BENCHMARKS
Impact of Improving Each Subscription Lever
Monetization and retention based growth far outpace acquisition based growth. You’re still going to
spend the majority of your time and budget on acquisition, but should invest in other areas, too.
%
IMPACT
ON
REVENUE
SOURCE: 2020 STUDY ON COMPANY UNIT ECONOMICS
0%
5%
10%
15%
20%
ACQUISITION MONETIZATION RETENTION
10.4%
16.6%
2.0%
9.3%
15.5%
2.4%
6.8%
13.1%
3.4%
2009 - 2012 2013 - 2016
2016 - 2019
N
1.4k
PILLAR OF THE BUSINESS

23. 23
GROWTH BENCHMARKS
Impact of Improving Each Subscription Lever
Monetization and retention based growth far outpace acquisition based growth. You’re still going to
spend the majority of your time and budget on acquisition, but should invest in other areas, too.
%
IMPACT
ON
REVENUE
SOURCE: 2020 STUDY ON COMPANY UNIT ECONOMICS
0%
5%
10%
15%
20%
ACQUISITION MONETIZATION RETENTION
10.4%
16.6%
2.0%
9.3%
15.5%
2.4%
6.8%
13.1%
3.4%
2009 - 2012 2013 - 2016
2016 - 2019
N
1.4k
PILLAR OF THE BUSINESS

24. –An Impatient, Type A Operator Amongst Us
“Thanks professor. I’m here
for the how not the why.”

25. 25
Let’s go deep on retention.

26. 26
We have a misconception
when it comes to retention.

27. –Product God
“Retention is only solved
through value and customer.”

28. 28
Point of cancellation Advocates
Critics

29. 29
Point of cancellation
Strategic Retention
Advocates
Critics

30. 30
Point of cancellation Advocates
Critics
Tactical Retention Zone

31. 31
Point of cancellation
Strategic Retention
Advocates
Critics
Tactical Retention Zone

32. 32
Point of cancellation
Strategic Retention
Advocates
Critics
Tactical Retention Zone
60-75%
25-40%

33. 33
Point of cancellation
Strategic Retention
Advocates
Critics
Tactical Retention Zone
60-75%
25-40%!!!

34. 34
How do we boost
retention?

35. 35
Retention
Keep customer around
longer, paying more

36. 36
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured

37. 37
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations

38. 38
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue

39. 39
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies

40. Active
Cancellations

41. 41
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Strategic
Strategic
Tactical
Tactical

42. 42
Term Optimization.

43. 43
Longer term contract equates
to lower cancellations.

44. 44

45. 45
Annuals typically have
30% better retention.

46. 46
Quarterlies typically have
20% better retention.

47. 47
You need to ask for the
upgrade beyond signup.

48. 48
Subject: Discount on your WHOOP subscription
Hey Hiro, wanted to let you know that there’s a way to save
money on your WHOOP subscription.
We’re giving those members who’ve been with us a while 2
months free if they sign up for our annual plan ($240).
Click here to easily get on the annual plan and we’ll take
care of the rest.
—
Johanna Timms
Member Success Upgrade your subscription
DISMISS
UPGRADE PLAN
Get 2 free months of WHOOP by
upgrading to annual ($240.00).

49. 49
Subject: Discount on your WHOOP subscription
Hey Hiro, wanted to let you know that there’s a way to save
money on your WHOOP subscription.
We’re giving those members who’ve been with us a while 2
months free if they sign up for our annual plan ($240).
Click here to easily get on the annual plan and we’ll take
care of the rest.
—
Johanna Timms
Member Success
Get 2 months free by switching to an
annual plan for $240.00/year.
Questions? Contact Us
CANCEL CONFIRM
Upgrade your subscription
DISMISS
UPGRADE PLAN
Get 2 free months of WHOOP by
upgrading to annual ($240.00).

50. 50
Win-Back and Triage
Cancellations

51. 51
• Add friction
• Redo the flow
Want to leave

52. 52
• Add friction
• Redo the flow
Why?
Want to leave
• Catalog to automate
• Predict future churn

53. 53
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
• Catalog to automate
• Predict future churn

54. 54

55. 55

56. 56
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
“Put you on plan for $XX to ensure your data is
here when you’re back”
• Catalog to automate
• Predict future churn

57. 57
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
Pause
“Put you on plan for $XX to ensure your data is
here when you’re back”
“Pause your plan for 90 days until this blows
over”
• Catalog to automate
• Predict future churn

58. 58
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
Pause
Freemium Tier
“Put you on plan for $XX to ensure your data is
here when you’re back”
“Pause your plan for 90 days until this blows
over”
“We’ll bump you down to our free tier for now”
Play Chicken
“We’ll be here for whenever you want to get
started again”
• Catalog to automate
• Predict future churn

59. 59
Don’t forget to try and win-
back customers.

60. 60
Subject: Discount available on your REISift account
Hey Hiro,
We haven’t seen you in a while but reaching out to share some updates on
REISift. We are now able to support [new feature]!
We’re currently running a promotion where you can get a 50% discount on
your subscription for 3 months if you sign back up today ($15/month).
Just click here and we’ll take care of the rest.
If you have any questions, just reply here.
—
Tyler Austin
Customer Success Ninja, REISift
Subject: Discount available on your REISift account
Hey Hiro,
Unfortunately we were unable to update your payment information
and your account has been cancelled.
You can get a 50% discount on your subscription for 3 months if you
update your information today ($15/month).
Just click here to update your information.
—
Tyler Austin
Customer Success Ninja, REISift

61. 61
Time to Value.
Customer Segment.

62. –Henry Ford (probably not)
“If I had asked people what they
wanted, they would have said
faster horses.”

63. 63
You need to know your customer
better than anyone else.

64. 64
All products have two axes of value -
feature value and willingness to pay

65. 65
First understand relative
value of features

66. 66
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Taste
Country of Origin
Brand

67. 67
Then overlay willingness to
pay data

68. 68
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Taste
Country of Origin
Brand

69. 69
We now have a framework
for measuring value.

70. 70
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Country of Origin
Brand
Differentiable Feature
(high value, high WTP)

71. 71
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Country of Origin
Brand
Differentiable Feature
(high value, high WTP)
Add-On Feature
(low value, high WTP)

72. 72
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Country of Origin
Brand
Differentiable Feature
(high value, high WTP)
Add-On Feature
(low value, high WTP)
Core Feature
(high value, low WTP)

73. 73
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Country of Origin
Brand
Differentiable Feature
(high value, high WTP)
Add-On Feature
(low value, high WTP)
Core Feature
(high value, low WTP)
Commodity Feature
(low value, low WTP)

74. 74
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
N
4.7k
SOURCE: 2019 STUDY ON PRODUCT VALUE PERCEPTION
What we think we're building

75. 75
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
.5
N
1.1M
SOURCE: 2019 STUDY ON PRODUCT VALUE PERCEPTION
What customers think

76. 76
Use this model to validate
what you think is valuable.

77. 77
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Strategic
Strategic
Tactical
Tactical

78. Expansion
Revenue

79. 79
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Strategic
Strategic
Mechanical
Mechanical
Tactical
Strategic
Strategic
Strategic

80. –Obvious Ollie
“It’s easier to keep an existing
customer than get a new one.”

81. 81
Why aren’t we using the
power of our advocates?

82. 82
Best subscription companies have
more than 20% of new revenue coming
from existing customers.

83. 83
Most companies have less than 10% of
new revenue coming from existing
customers.

84. 84
Cross-sells and up-sells.

85. 85
The future of growth is
multi-product.

86. 86
Multi-Product companies growth is
30-50% higher than single product.

87. 87

88. 88
Add-ons.

89. 89
Add-ons are the most underutilized
aspects of any subscription company.,

90. 90
Lifetime value is 18-54% higher for
customers with at least one add-on.

91. 91
Relative Value of Features (x-axis)
Willness
to
Pay
Relative
to
Median
(y-axis)
.25 .5
-.25
-.5
-25%
25%
Country of Origin
Brand
Differentiable Feature
(high value, high WTP)
Add-On Feature
(low value, high WTP)
Core Feature
(high value, low WTP)
Commodity Feature
(low value, low WTP)

92. 92
Value Metrics.

93. 93

94. 94
Cancellations are lower.

96. 96
Expansion revenue is much
higher.

98. 98
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Strategic
Strategic
Tactical
Tactical
Tactical
Strategic
Strategic
Strategic

99. Payment
Delinquencies

100. 100
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Infrastructure
Pre-Failure
Post-Failure
Strategic
Strategic
Tactical
Tactical
Tactical
Strategic
Strategic
Strategic
Tactical
Tactical
Tactical

101. 101
Payment failures are the largest
single bucket of lost customers.

102. 102
CREDIT CARD BENCHMARKS
20-40% of lost customers in B2B/DTC
Delinquent churn accounts for 20-40% of overall churn in B2B and appears to grow significantly as a
proportion of total churn as a company becomes larger. The recovery rate on this churn is less than 20%.
%
OF
TOTAL
CANCELLATIONS
SOURCE: 2020 STUDY ON PAYMENT FAILURES
0%
25%
50%
75%
100%
Less than $5M ARR $5.01 to $10M ARR $10.01 to $50M ARR $50.01M+ ARR
61.0%
68.1%
72.0%
78.1%
39.0%
31.9%
28.0%
21.9%
Delinquent Churn Active Churn
N
1.4k
ANNUAL REVENUE OF COMPANY

103. 103
Why?

104. 104
We’re terrible at recovering
payment failures.

105. 105
We only recover 30 out of every 100
customers who’s payment fails.

106. 106
We should recover 60 to 80 out of
100 customers who’s payment fails.

107. 107
You need to treat these customers
as a marketing channel.

108. 108
POINT
OF
FAILURE
NO SIGN-IN NEEDED FORMS
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EXPIRATION TRACKING
+5%
+10%
EMAIL, IN-APP, AND SMS
+40%
+15%
Retain scans card & transaction metadata and
delivers pre-dunning notifications at just the
right time to at-risk users.
Utilizing historical and usage data, Retain
monitors when the best time is to ask for an
updated credit card from an expiring user.
Message copy greatly influences recovery.
Retain is constantly adjusting timing and
content of notifications to optimize recovery.
Retain retries a customer's credit card when
there's the highest chance of recovery.
Retain reduces friction immensely by not
requiring a user to login to update their payment
information
Towards the end and beyond the point of
failure, Retain will lock out a delinquent user,
allowing for a long tail of recovery.
LOCKOUT (OPTIONAL)
+8%

109. 109
Enough?
Everyone get value?

110. 110
Let’s recap.

111. 111
Retention is a game of
incremental optimization.

112. 112
Point of cancellation Advocates
Critics

113. 113
Point of cancellation
Strategic Retention
Advocates
Critics
Tactical Retention
60-75%
25-40%

114. 114
Point of cancellation
Strategic Retention
Advocates
Critics
Tactical Retention
60-75%
25-40%!!!

115. 115
Influencing retention requires
breaking down the pieces of retention.

116. 116
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Infrastructure
Pre-Failure
Post-Failure
Strategic
Strategic
Tactical
Tactical
Tactical
Strategic
Strategic
Strategic
Tactical
Tactical
Tactical

117. 117
You just need to
put in the work.

118. 118
Q&A
patrick@profitwell.com

119. 119
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Infrastructure
Pre-Failure
Post-Failure

120. 120
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Infrastructure
Pre-Failure
Post-Failure
Price Intelligently

121. 121
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Infrastructure
Pre-Failure
Post-Failure
ProfitWell Retain

122. 122
Q&A
patrick@profitwell.com
THANK YOU
Q&A
patrick@profitwell.com

123. 123
Appendix

124. 124
Free Retention Audits.
patrick@profitwell.com

125. It’s a game of inches.

126. 126
Prehistoric SaaS

127. 127
Let’s get deeper on Rete

128. 128

129. 129
Retention

130. 130
Retention
Keep customer around
longer, paying more
Net Revenue Retention
User/Revenue Churn
How it’s measured
Active
Cancellations
Expansion
Revenue
Delinquencies
Time to Value
Target Segment
Term
Win Back/Triage
Cross-sells
Upsells
Add-ons
Value Metric
Infrastructure
Pre-Failure
Post-Failure
Strategic
Strategic
Mechanical
Mechanical
Mechanical
Strategic
Strategic
Strategic
Mechanical
Mechanical
Mechanical

131. WE FOCUS ON THE WRONG FUNDAMENTALS
Impact of Improving Each Pillar of Your Business
Monetization and retention based growth far outpaces acquisition based growth. This impact is getting
greater over time.
%
IMPACT
ON
REVENUE
SOURCE: 2016 STUDY ON COMPANY UNIT ECONOMICS
0%
5%
10%
15%
20%
ACQUISITION MONETIZATION RETENTION
9.32%
15.89%
2.35%
6.71%
12.7%
3.32%
2008 - 2012 2013 - 2016
N
1.4k
N = Data from 1.4k software companies
PILLAR OF THE BUSINESS
Brought to you by

132. 132
Retention

133. Brought to you by
Current churn
benchmarks
(where should
you be?)
Step 1

134. Brought to you by
Where you should focus to
properly tackle retention.
Step 2

135. Brought to you by
Sound good? :)

136. We’ve seen inside more recurring revenue data
than anyone else out there.
Brought to you by

137. Brought to you by
Current churn
benchmarks
(where should
you be?)
Step 1

138. Let’s look at some benchmarks.

139. Churn.

140. Company Age correlates with lower churn

141. Expansion Revenue.

143. Brought to you by
Why now?

144. Recurring Revenue is all about relationships.

145. Brought to you by
Buyers are the central tenet of your business
POINT OF CONVERSION
DRIVE CUSTOMERS
OFFER PRODUCT A
JUSTIFY PRICE A
OFFER PRODUCT B
JUSTIFY PRICE B
OFFER PRODUCT C
JUSTIFY PRICE C
$ $
$

146. Data shows us retention’s importance.

147. WE FOCUS ON THE WRONG FUNDAMENTALS
Impact of Improving Each Pillar of Your Business
Monetization and retention based growth far outpaces acquisition based growth. This impact is getting
greater over time.
%
IMPACT
ON
REVENUE
SOURCE: 2016 STUDY ON COMPANY UNIT ECONOMICS
0%
5%
10%
15%
20%
ACQUISITION MONETIZATION RETENTION
9.32%
15.89%
2.35%
6.71%
12.7%
3.32%
2008 - 2012 2013 - 2016
N
1.4k
N = Data from 1.4k software companies
PILLAR OF THE BUSINESS
Brought to you by

148. WE FOCUS ON THE WRONG FUNDAMENTALS
Impact of Improving Each Pillar of Your Business
Monetization and retention based growth far outpaces acquisition based growth. This impact is getting
greater over time.
%
IMPACT
ON
REVENUE
SOURCE: 2016 STUDY ON COMPANY UNIT ECONOMICS
0%
5%
10%
15%
20%
ACQUISITION MONETIZATION RETENTION
9.32%
15.89%
2.35%
6.71%
12.7%
3.32%
2008 - 2012 2013 - 2016
N
1.4k
N = Data from 1.4k software companies
PILLAR OF THE BUSINESS
Brought to you by

149. Brought to you by
Where you should focus to
properly tackle retention.

150. Three pieces to Retention

151. Retention Consists of Three Main Parts
Active Churn
A subscriber actively choosing
to end their subscription due to
some sort of dissatisfaction or
lack of use.
Delinquent Churn
A credit card failing due to
expiration, limits, or technical
issues with gateway or
processing company (130+
reasons this happens).
Expansion
A subscriber expanding the
amount of revenue they’re
providing you through upsell/
cross-sell or more usage.

152. Retention Consists of Three Main Parts
Active Churn
A subscriber actively choosing
to end their subscription due to
some sort of dissatisfaction or
lack of use.
Delinquent Churn
A credit card failing due to
expiration, limits, or technical
issues with gateway or
processing company (130+
reasons this happens).
Expansion
A subscriber expanding the
amount of revenue they’re
providing you through upsell/
cross-sell or more usage.
Gross Churn

153. Retention Consists of Three Main Parts
Active Churn
A subscriber actively choosing
to end their subscription due to
some sort of dissatisfaction or
lack of use.
Delinquent Churn
A credit card failing due to
expiration, limits, or technical
issues with gateway or
processing company (130+
reasons this happens).
Expansion
A subscriber expanding the
amount of revenue they’re
providing you through upsell/
cross-sell or more usage.
Gross Churn

154. Active churn

155. Need a triage system for folks trying to cancel

156. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Want to leave

157. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
• Catalog to automate
• Predict future churn

158. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
• Catalog to automate
• Predict future churn

159. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
• Catalog to automate
• Predict future churn

160. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
“Put you on plan for $XX to ensure your data is
here when you’re back”
• Catalog to automate
• Predict future churn

161. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
Pause
“Put you on plan for $XX to ensure your data is
here when you’re back”
“Pause your plan for 90 days until this blows over”
• Catalog to automate
• Predict future churn

162. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
Pause
Freemium Tier
“Put you on plan for $XX to ensure your data is
here when you’re back”
“Pause your plan for 90 days until this blows over”
“We’ll bump you down to our free tier for now”
• Catalog to automate
• Predict future churn

163. TRIAGING CHURN TO LOSE AS
LITTLE CUSTOMERS AS POSSIBLE
— YOUR
EXPERIMENTAL
DESIGN
• Add friction
• Redo the flow
Why?
Want to leave
“I can put you on the $XXX plan for 90 days”
Salvage Offer
Maintenance
Pause
Freemium Tier
“Put you on plan for $XX to ensure your data is
here when you’re back”
“Pause your plan for 90 days until this blows over”
“We’ll bump you down to our free tier for now”
Play Chicken
“We’ll be here for whenever you want to get
started again”
• Catalog to automate
• Predict future churn

164. Optimize time to value

165. Force/Optimize annuals.

166. 30% lower churn than monthly

167. Longer term increases cash flow

170. Brought to you by
Expansion revenue.

171. Avg % lift in LTV from just 1 add-on?

172. +18-48%
(2 - 6 Months)

173. -50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
-0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5
Revenue Drivers
2017 SOFTWARE MARKET SURVEY
WE’RE BUILDING THE WRONG PRODUCT
Calculating the expected impact of product on growth
DEVIATION
FROM
MEDIAN
WTP
RELATIVE PREFERENCE MAGNITUDE
Differentiable Features
High Value/High WTP
Add-Ons
Low Value/High WTP
Core Features
High Value/Low WTP
Trash Land
Low Value/Low WTP

174. Brought to you by
Credit Card Failures

175. 130+ reasons why a credit card fails

176. CHURN BENCHMARKS
Dlq churn accounts for 20-40% of churn in B2B/DTC
Delinquent churn accounts for 20-40% of overall churn in B2B and appears to grow significantly as a
proportion of total churn as a company becomes larger. The recovery rate on this churn is less than 20%.
%
OF
TOTAL
CHURN
SOURCE: 2017 STUDY ON CHURN
0%
25%
50%
75%
100%
Less than $5M ARR $5.01 to $10M ARR $10.01 to $50M ARR $50.01M+ ARR
61.031%
68.058%
71.981%
78.11%
38.969%
31.942%
28.019%
21.89%
Delinquent Churn Active Churn
N
489
N = Minimum of 489 companies per segment pulled from the middle 2/3 of companies in terms of
churn. This, along with a dampening model was used to control for outlier spikes in churn rate.
Brought to you by

177. If $100 goes delinquent,
how much do we recover typically?

178. ~$30

179. Your recovery rates should be 60-80%.

180. You need to treat these folks as a marketing channel.

181. It’s a game of inches.

182. What do you do before failure?

183. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EMAIL, IN-APP, AND SMS LOCKOUT (OPTIONAL)
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EXPIRATION TRACKING
Utilizing historical and usage data, Retain
monitors when the best time is to ask for an
updated credit card from an expiring user.
+5%
NO SIGN-IN NEEDED FORMS

184. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EXPIRATION TRACKING
INTELLIGENT AT RISK MONITORING
EMAIL, IN-APP, AND SMS LOCKOUT (OPTIONAL)
SMART RETRIES
+5%
Retain scans card & transaction metadata and delivers
pre-dunning notifications at just the right time to at-
risk users.
NO SIGN-IN NEEDED FORMS

188. DO NOT do pre-failure emails

189. +11-18% in active cancellations

190. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EXPIRATION TRACKING
SMART RETRIES
EMAIL, IN-APP, AND SMS LOCKOUT (OPTIONAL)
+10%
Retain retries a customer's credit card when
there's the highest chance of recovery.
INTELLIGENT AT RISK
MONITORING
+5%
+5%
NO SIGN-IN NEEDED FORMS

192. Stripe = Braintree = Recurly = Zuora = Etc.

193. Decouple your retry logic and spin your own.

194. DTC = 12:01am PT on 1st and 15th of the month

195. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
LOCKOUT (OPTIONAL)
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EMAIL, IN-APP, AND SMS
Message copy greatly influences recovery. Retain is
constantly adjusting timing and content of
notifications to optimize recovery.
+40%
EXPIRATION TRACKING
+5%
+10%
NO SIGN-IN NEEDED FORMS

196. DO NOT use stylized emails

199. Test, test, and test.

200. Time of day you send.

201. Distance between sends

202. Copy. So many things to test.

203. Localize your emails, as well.

205. Also, SMS….

206. Integrates with with your billing system to reduce churn
Targeted white-labeled outreach Leveraging 2b+ data points
Smart Retries
Customizable SMS Text Messages In App Notifications
Optimized Email Outreach

207. 90% open rates, most within first 3 minutes

208. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EXPIRATION TRACKING
NO SIGN-IN NEEDED FORMS
EMAIL, IN-APP, AND SMS LOCKOUT (OPTIONAL)
+15%
Retain reduces friction immensely by not
requiring a user to login to update their
payment information
INTELLIGENT AT RISK
MONITORING
+5%
+5%
SMART RETRIES
+10%
+40%

211. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
NO SIGN-IN NEEDED FORMS
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
LOCKOUT (OPTIONAL)
Towards the end and beyond the point of
failure, Retain will lock out a delinquent
user, allowing for a long tail of recovery.
+8%
EXPIRATION TRACKING
+5%
+10%
EMAIL, IN-APP, AND SMS
+40%
+15%

213. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
NO SIGN-IN NEEDED FORMS
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EXPIRATION TRACKING
+5%
+10%
EMAIL, IN-APP, AND SMS
+40%
+15%
Retain scans card & transaction metadata and
delivers pre-dunning notifications at just the
right time to at-risk users.
Utilizing historical and usage data, Retain
monitors when the best time is to ask for an
updated credit card from an expiring user.
Message copy greatly influences recovery.
Retain is constantly adjusting timing and
content of notifications to optimize recovery.
Retain retries a customer's credit card when
there's the highest chance of recovery.
Retain reduces friction immensely by not
requiring a user to login to update their payment
information
Towards the end and beyond the point of
failure, Retain will lock out a delinquent user,
allowing for a long tail of recovery.
LOCKOUT (OPTIONAL)
+8%

214. Brought to you by
Enough? Everyone get some value?

215. Brought to you by
We’re going to be breaking down a framework for understanding
retention and going through tons of tactics to implement *tomorrow*.
LET’S BOOST RETENTION AND LOWER CHURN

216. Brought to you by
You just have to put in the work.

217. Q&A
Patrick@ProfitWell.com
Brought to you by

218. Brought to you by
patrick@profitwell.com
Free Retention Audit & Benchmark Report

219. Brought to you by
Appendix

220. Annuals guarantee you time to show value.

221. Be amazing at support.

222. Support matters

223. Support drives perception and fills in gaps.

224. Reconsider Implementation/Training

226. Forced on-boarding pushes value to the forefront
and can start CAC recovery early.

227. 130+ reasons why a credit card fails

228. CHURN BENCHMARKS
Dlq churn accounts for 20-40% of churn in B2B/B2C
Delinquent churn accounts for 20-40% of overall churn in B2B and appears to grow significantly as a
proportion of total churn as a company becomes larger. The recovery rate on this churn is less than 20%.
%
OF
TOTAL
CHURN
SOURCE: 2017 STUDY ON CHURN
0%
25%
50%
75%
100%
Less than $5M ARR $5.01 to $10M ARR $10.01 to $50M ARR $50.01M+ ARR
61.031%
68.058%
71.981%
78.11%
38.969%
31.942%
28.019%
21.89%
Delinquent Churn Active Churn
N
489
N = Minimum of 489 companies per segment pulled from the middle 2/3 of companies in terms of
churn. This, along with a dampening model was used to control for outlier spikes in churn rate.
Brought to you by

229. If $100 goes delinquent,
how much do we recover typically?

230. ~$30

231. CHURN BENCHMARKS
Average Recovery Rates are Poor Across the Board
Overall, we’re seeing recovery rates fairly low in the market. The best of the best in the world at
recovery are typically seeing recovery rates in the high 70s, low 80s.
AVERAGE
RECOVERY
RATE
SOURCE: 2018 STUDY ON CHURN
0%
25%
50%
75%
100%
Less than $5M ARR $5.01 to $10M ARR $10.01 to $50M ARR $50.01M+ ARR
31.653%
28.366%
29.377%
27.389%
35.442%
36.879%
33.748%
30.895%
B2B B2C
N
208
N = Minimum of 208 companies per segment pulled from the middle 2/3 of companies in terms of
churn. This, along with a dampening model was used to control for outlier spikes in churn rate.

232. “But these people don’t
want the product anyway…”

233. Nope.

234. Only 1 out of 5 of these are legit churn.

235. Your recovery rates should be 60-80%.

236. You need to treat these folks as a marketing channel.

237. It’s a game of inches.

238. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EXPIRATION TRACKING
INTELLIGENT AT RISK MONITORING
EMAIL AND IN-APP NOTIFICATIONS LOCKOUT (OPTIONAL)
SMART RETRIES
+5%
Retain scans card & transaction metadata and delivers
pre-dunning notifications at just the right time to at-
risk users.
NO SIGN-IN NEEDED FORMS

239. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EMAIL AND IN-APP NOTIFICATIONS LOCKOUT (OPTIONAL)
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EXPIRATION TRACKING
Utilizing historical and usage data, Retain
monitors when the best time is to ask for an
updated credit card from an expiring user.
+5%
NO SIGN-IN NEEDED FORMS

240. DO NOT do pre-dunning emails

241. +11-18% in active churn

242. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EXPIRATION TRACKING
SMART RETRIES
EMAIL AND IN-APP NOTIFICATIONS LOCKOUT (OPTIONAL)
+10%
Retain retries a customer's credit card when
there's the highest chance of recovery.
INTELLIGENT AT RISK
MONITORING
+5%
+5%
NO SIGN-IN NEEDED FORMS

243. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
LOCKOUT (OPTIONAL)
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EMAIL AND IN-APP NOTIFICATIONS
Message copy greatly influences recovery. Retain is
constantly adjusting timing and content of
notifications to optimize recovery.
+40%
EXPIRATION TRACKING
+5%
+10%
NO SIGN-IN NEEDED FORMS

244. DO NOT use stylized emails

247. Test, test, and test.

248. Localize your emails, as well.

250. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
EXPIRATION TRACKING
NO SIGN-IN NEEDED FORMS
EMAIL AND IN-APP NOTIFICATIONS LOCKOUT (OPTIONAL)
+15%
Retain reduces friction immensely by not
requiring a user to login to update their
payment information
INTELLIGENT AT RISK
MONITORING
+5%
+5%
SMART RETRIES
+10%
+40%

252. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
NO SIGN-IN NEEDED FORMS
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
LOCKOUT (OPTIONAL)
Towards the end and beyond the point of
failure, Retain will lock out a delinquent
user, allowing for a long tail of recovery.
+8%
EXPIRATION TRACKING
+5%
+10%
EMAIL AND IN-APP NOTIFICATIONS
+40%
+15%

254. RETAIN
Reduce churn through targeted campaigns
POINT
OF
FAILURE
NO SIGN-IN NEEDED FORMS
SMART RETRIES
INTELLIGENT AT RISK
MONITORING
+5%
EXPIRATION TRACKING
+5%
+10%
EMAIL AND IN-APP NOTIFICATIONS
+40%
+15%
Retain scans card & transaction metadata and
delivers pre-dunning notifications at just the
right time to at-risk users.
Utilizing historical and usage data, Retain
monitors when the best time is to ask for an
updated credit card from an expiring user.
Message copy greatly influences recovery.
Retain is constantly adjusting timing and
content of notifications to optimize recovery.
Retain retries a customer's credit card when
there's the highest chance of recovery.
Retain reduces friction immensely by not
requiring a user to login to update their payment
information
Towards the end and beyond the point of
failure, Retain will lock out a delinquent user,
allowing for a long tail of recovery.
LOCKOUT (OPTIONAL)
+8%

255. It’s a game of inches. Do what you can.

256. Retention Consists of Three Main Parts
Active Churn
• Features
• Time to Value
• Right Customer
• Support and Brand
• Term
Delinquent Churn Expansion
Gross Churn

257. Brought to you by
Expansion Revenue.

258. Retention Consists of Three Main Parts
Active Churn
• Features
• Time to Value
• Right Customer
• Brand
• Term
Delinquent Churn Expansion
• Add-Ons
• Upgrade Paths
• Proper Buyer Proportion
Gross Churn

259. Utilize customer success.

261. Customer success drives more value consumption.

262. Add-ons, Add-ons, Add-ons.

263. Increase in LTV for customers with an add-on?

264. 23% to 54% Higher LTV for Those Customers
Who’ve Purchased an Add-On

265. Retention Consists of Three Main Parts
Active Churn
• Features
• Time to Value
• Right Customer
• Brand
• Term
Delinquent Churn Expansion
• Add-Ons
• Upgrade Paths
• Proper Buyer Proportion
Gross Churn

266. Brought to you by
Fix Your Delinquencies.

267. Retention Consists of Three Main Parts
Active Churn
• Features
• Time to Value
• Right Customer
• Brand
• Term
Delinquent Churn
• Type of CCs
• Direct Debit
• Term
Expansion
• Add-Ons
• Upgrade Paths
• Proper Buyer Proportion
Gross Churn

268. Brought to you by
Enough? Everyone get some value?

269. Retention Consists of Three Main Parts
Active Churn
• Features
• Time to Value
• Right Customer
• Brand
• Term
Delinquent Churn
• Type of CCs
• Direct Debit
• Term
Expansion
• Add-Ons
• Upgrade Paths
• Proper Buyer Proportion
Gross Churn

270. • Nothing beats researching and *knowing* your customer. We
didn’t have enough time to go deep here.
• Tactically, optimize for:
• Term
• Support and Brand
• Onboarding, Customer Success, Add-Ons
• Payment failures
WHAT SHOULD I TAKE AWAY
FROM THIS, PATRICK? 😒
— RETENTION
IN
THE
NEW
ECONOMY

271. Brought to you by
We’re going to be breaking down a framework for understanding
retention and going through tons of tactics to implement *tomorrow*.
LET’S BOOST RETENTION AND LOWER CHURN

272. Brought to you by
You just have to put in the work.

273. Brought to you by
patrick@profitwell.com
Free Retention Audit & Benchmark Report

274. Next Steps
Patrick@ProfitWell.com
Brought to you by