How segmentation helps predict churn | Beatport's Romain Pouillon
Dec 1 2021
How often do you listen to music? Most of us probably listen on a commute, while at work, or when exercising to name a few. For some, music is ingrained in what we do. In the case of Romain Pouillon, SVP & GM at Beatport, he’s focused on how much customers curate playlists and engage with their software. These usage metrics are key leading indicators of positive or negative retention.
On today’s episode of Retention Talk, I talk with Romain about his experience at Beatport, including being integrated with your customer’s ecosystem, using segmentation to forecast churn by cohort, and retention beginning with onboarding.
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Key points discussed in the episode
The prediction of churn is an important component to understand and to prevent people to leave the platform.”
– Romain Pouillon
Integrating with your customer’s ecosystem
When Beatport launched their product Link, they only integrated with one platform: Rekordbox. What they soon realized, however, is that users were not too keen on shifting platforms that were more commoditized like Serato, Pioneer, and Traktor. By forcing their users to use only one software, it was not easy to retain customers who had already built out systems on other platforms. This led them to adopt up to 15 different platforms that Link integrates with, shoring up faith in the Beatport product.
Using segmentation to forecast churn by cohort
Romain elucidates that by segmenting Beatport’s customers by the kind of music they consume, they were able to determine when these different groups would churn. They learned that using a broad retention tactic for all customers is not as effective as a calculated win-back campaign for individual segments. They noticed usage dropped by streaming fewer and fewer tracks on Link, which made it clear a dedicated email to re-engage with the platform was needed.
Retention starts with onboarding
Before retaining a customer, you have to instill the value that your product provides. At first, retention will seem to be all over the map, but this is no cause to panic. Over time, as you improve your product and correspond it to the needs of your customers, numbers will naturally start to normalize. The best thing you can do upfront is ensure your onboarding is in a good place. Check in with your team weekly and ensure that the tweaks, large or small, are affecting the numbers you're tracking.
You don’t need a lot to optimize your customer success strategy, but it should be a company-wide focus. The relationship with your customer is at the core of recurring revenue. Cementing these relationships has an immensely positive impact on your bottom line. Check out these 7 steps for creating your customer success strategy:
1. Identify target personas
You won’t know how to provide the best possible experience if you don’t understand your target customer. Buyer personas help you qualify the best-fit customers for your product and figure out how to attract them to your service. It’s impossible to make someone successful if you don’t understand their goals.
2. Talk to current customers
Your current customers are some of the most valuable assets you have. They can provide you with real-time customer feedback on your product, its value, and how it helps them be successful. Talking to current customers is also a great way to find social proof to share with prospects to help them convert.
Try using chat pop-ups, automated email campaigns, and proactive outreach to survey your current customer base about their needs.
3. Map out multiple customer journeys
Each target persona should have its own customer journey. Once you understand who your customers are, who you want to attract, and how to convert them, it’s time to map out the journey that gets them there. Build this journey based on customer feedback as well as the goals of each customer.
Start small. If you understand the basic journey a customer follows from discovering your product to purchasing it to finally becoming a loyal user, that will help you build a better experience as a whole.
4. Optimize your onboarding journey
Getting used to a new product or service is never easy. Make sure your onboarding journey is optimized to provide the most value possible at each customer touchpoint. Use customer surveys and conversations you’ve had to figure out where to focus. The easier it is to get acclimated to a new tool, the better off customers will be in the long term.
5. Define what success looks like for each persona
What actions does a new customer need to take to achieve their goals using your service? Make sure you define exactly what outcomes are beneficial for each target persona, and then incorporate them into your customer success strategy. Learn more about building holistic personas in this post about customer research.
6. Pick metrics that reflect those outcomes
How do you quantify a customer’s success? It’s important to nail down the metrics you need to use to map out exactly how much customer success impacts your bottom line. Whether it’s retention and churn rates, new MRR, or LTV—make sure you can analyze the success of your strategy effectively.
If you’re not sure which metrics make the most sense, track how each metric changes as you implement your customer success strategy. Sometimes making an impact on your onboarding will help you increase LTV, other times it may cut down on churn rates.
7. Use customer success software to augment your strategy
There are a number of different tools you can use to facilitate customer success. Here are a few to help you get started with your search:
Intercom: Their platform provides live customer chat, so you can connect with customers as they use your product/service.
Zendesk: An all-in-one suite for customer management, customer service, and sales.
Gainsight: This tool helps you track success metrics (like churn rate and LTV) to see whether your customer success strategy is working.
If you’d like more insight into your own retention—or even a free retention audit where we can benchmark you with actual relevant data—reach out to me at email@example.com.
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