hero image

Ep. 39 - Knowing your best and worst customers and having a Retention Based Acquisition mindset with Kristen LaFrance

Kristen is the lead on all things education, retention, and growth-related at Churn Buster. She’s obsessed with creating meaningful customer relationships and showcasing the human side of e-commerce businesses.

On this podcast, we talk about Retention Based Acquisition. What it is, why it’s important, and how changing your mindset to focus on it makes your store more successful in the long run.

In This Conversation We Discuss:

  • [1:14] Kristen’s journey to Churn Buster
  • [2:24] Content strategy tips for e-commerce
  • [4:30] What is Churn Buster?
  • [5:30] Retention Based Acquisition explained
  • [8:16] Why does Retention Based Acquisition matter?
  • [10:33] Retention Based Acquisition Mentality vs Performance Marketing
  • [12:00] Content is really changing how ads perform
  • [12:44] Consumers know much better, brands have to be more creative
  • [13:38] Sponsor: https://www.simplr.ai/honest
  • [14:23] Brands give value to customers
  • [15:05] Proper content and branding can make you compete confidently with Amazon
  • [15:54] Brands that have content for their best customers
  • [17:45] How to implement the Retention Based Acquisition mindset for how you run your store
  • [21:08] Knowing your bad-fit customers
  • [24:10] The importance of creating customer personas for bad-fit customers

Resources:

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

 

 

Transcript:

Kristen LaFrance  

You shouldn't try to be helping people who don't need your help or trying to sell products to people who don't want your products. So that's really the first step. 

 

And it's not the most exciting step. It's not a bunch of action stuff, but it's getting to know your customers, both the best ones and the worst ones so that you have, basically a Northstar to guide you into all your creation of campaigns.

 

Annette Grant  

Welcome to Honest Ecommerce where we are dedicated to cutting through the BS and finding actionable advice for online store owners.

 

Chase Clymer  

I'm your host, Chase Clymer

 

Annette Grant  

And I'm your host, Annette Grant.

 

Chase Clymer  

And we believe running an online business does not have to be complicated or a guessing game.

 

Annette Grant  

If you're struggling to scale your sales, Electric Eye is here to help. To apply to work with us. visit electriceye.io/connect to learn more.

 

Chase Clymer  

And let's get on with the show.

 

Welcome back, everybody to another episode of Honest Ecommerce. I can't believe you guys are still here. listening to me ramble with my awesome guests. 

 

And today I have a fantastic one. Today, we welcome to the show, Kristen LaFrance. She is the growth and community lead over at Churn Buster. Welcome to the show.

 

Kristen LaFrance  

Hey, thanks so much for having me.

 

Chase Clymer  

Awesome. Cool. So before we get into what Churn Buster is and all the awesome stuff that you're going to teach us today, How'd you end up there?

 

Kristen LaFrance  

Yeah. So before Churn Buster, I was actually working for a company called Selz, which is another Ecommerce platform similar to Shopify

 

And I was there for about two years. And I came in as a social media manager and left as the head of all content. So that was my journey there. 

 

And through that, I learned so much about entrepreneurs and Ecommerce and businesses trying to grow in the digital space and it was just a really fun place to be. 

 

So then when Churn Buster reached out and they're like," Hey, you want to join our team and come help with content and community building here?" I jumped right over to it. It's a super fun team, super fun product (that) we're working on. 

 

So it's been really great --now it's been here for about a year and a half-- and I've learned a ton and I'm getting to do exactly what I love which is helping Ecommerce companies really grow and find success. 

 

Chase Clymer  

Awesome. Cool. So one of my... I don't know, I keep rambling about it lately and I used the word ramble twice so you can tell how much coffee I'm on...

 

Kristen LaFrance  

(laughs)

 

Chase Clymer  

...is content. Content is king. So, before we get into the topic today, I want to just touch on that since it's been such a key integral part of your job. 

 

What are some tips that you can give to these Ecommerce stores that are struggling with coming up with their version 1.0 of their content strategy?

 

Kristen LaFrance  

Yeah, I think the best place to start is to just get to know your customers. And you're going to hear me say that a bunch today --I'll probably get a little bit annoying about it-- but understanding what your customers need more than your product. 

 

So, they came to you with some aspirational, emotional decision behind coming to your product. So if you're selling yoga pants, there's probably some aspiration on the lifestyle of yoga. They're likely looking to be a calmer, more centered, more flexible person. 

 

If you're selling vitamins, those people are looking to be healthier, and more in-tune with their health, and taking care of their bodies. 

 

So you look at the reasons people are coming to, in the first place, dig a little bit deeper into the emotions that are driving those reasons, and you're going to find just a plethora of ideas that you can create content around. 

 

I think a lot of companies get stuck on "How does the content relate back to our product?" and it doesn't always have to. 

It can really just support the larger journey that your customers are on. So, how can you help them in their bigger lifestyle outside of your products in relation to what you're helping them with? How can you just support them with educational and entertaining content? 

 

I think that's really how you have to look at it in order to have those good ideas come up that don't feel so, "10 steps to using this." It's just figuring out, what are their big aspirational goals and how can you help them get there through content?

 

Chase Clymer  

That was the shortest and most precise answer I've heard of, which is a good thing. You hit the nail on the head, and that's fantastic. And I'm probably going to refer back to this when speaking about it with potential clients in the future. 

 

Kristen LaFrance  

Awesome. 

 

Chase Clymer  

Awesome. So let's get into it. What in the world is Churn Buster?

 

Kristen LaFrance  

So Churn Buster is a subscription business's best defense against involuntary churn. So we run really advanced follow-up campaigns to recover failed payments using optimal retry schedules, email timing... Really integrated actions to decrease overall churn. 

 

We're really the only company focusing 100% on this issue. So we have applied the gold standard in these stunning practices to the top Ecommerce brands like ButcherBox and Bokksu. LOLA… 

 

We're really helping them plug this issue right away so they don't have to deal with failed payments.

 

Chase Clymer  

Absolutely. So you guys definitely specialize in the subscription model? 

 

Kristen LaFrance  

Yes, definitely. 

 

Chase Clymer  

Cool. So, if you do have an amazing subscription program out there, it's probably worth checking them out. 

 

Kristen LaFrance  

Definitely.

 

Chase Clymer  

Moving into our next topic here, though. So I've seen this term get thrown around a bit. Retention-based acquisition

 

Kristen LaFrance  

Mm-hmm. 

 

Chase Clymer  

What does that mean? I know that I have a little bit of familiarity with it, but I think that our listeners would definitely learn a lot.

 

Kristen LaFrance  

Yeah, it does come like a bit more intense than it actually is. Because...

 

Chase Clymer  

It sounds like a law term.

 

Kristen LaFrance  

Yeah, retention-based acquisition is just jam-packed with some buzzy marketing words. But really, when I'm talking about this, it's just marketing for the long run. Which again may still sound complicated, but it's not. 

 

It essentially means that when a company is creating acquisition campaigns and testing out channels, the goal isn't just getting a sale. The goal now is actually to find a great customer. So it's marketing with retention in mind. 

 

And what I've really been seeing is in the early stages of growth, or when Ecommerce companies have a ton of investor pressure, companies can really slip into this churn-and-burn philosophy, where the most important thing is sales, regardless of anything past that. 

 

So they fire up a ton of channels, bring in any and all customers, they can get their hands on, eventually churning out a lot of those customers, a lot of them not ever coming back and making another purchase, because, in the initial plan, there wasn't a long-term action plan there. 

 

So when I really, really boil it down, we're just talking about prioritization management, figuring out how to add a little bit of that retention into your acquisition channels so focusing on your good fit ideal customers for the acquisition... 

 

It's just being focused on retention from the get-go and just mixing it all together so, when you're spending all this time acquiring customers, you know you're acquiring good ones.

 

Chase Clymer  

Yeah, that is the right way to approach it. So I'm assuming that means when you're building your strategies out, it isn't always top of the funnel. 

You are trying to set up some good retargeting basics and after you actually make that sale, some touchpoints past that to increase that lifetime spend.

 

Kristen LaFrance  

Yeah, definitely. So it's everything from the first touchpoint of a customer is going to get with you. 

 

Are you speaking to that particular customer, your best customer? Or are you speaking to customers that don't come in and stay on your subscription or don't make repeat purchases?

 

So everything from you know, retargeting ads, really speaking to their needs. The welcome emails, the first email they get, every touchpoint they come into with your business. Is it providing... 

 

Is it helping that lifetime value grow by providing value and telling them, "Hey, we really are the company for you." And then of course after the sale, then there's all sorts of stuff you can do after that for retention.

 

Chase Clymer  

So why is that so important versus just having a really big mindset on growth and acquisition? I'm making the sale, why does it matter how I'm approaching it?

 

Kristen LaFrance  

Mm-hmm. I think right now, a lot of companies are starting to realize how important customer retention really is. We're seeing the cost of acquisition rising on every single channel and it's happening quickly. So companies are starting to have to look and say, "How can we extend the LTV of our customer? 

 

How can we encourage more repeat purchases on those individual customers to make up for that rising cost of acquisition?" 

 

So as acquisition gets so hard, the competition is higher. You got to think about how to keep propelling growth if the acquisition channels aren't working in the low-cost, high-efficiency manner? 

 

That solution is going to come in retention and customer LTV, getting average order value extended, getting repeat purchase extended, getting customers on a subscription, that's really where the shift in focus has to go. 

 

And a lot of these brands that already have huge acquisition channels, set up tons of campaigns running, they're now having to look back and say, "Okay, how do we actually keep these customers on for longer? We know how to get them. But how do we extend the LTV past 2 months or one purchase? How can we get them on a subscription and keep them for 6 plus months? How can we get them to come back and make a repeat purchase after repeat purchase?" 

 

So it's really shifting in the industry right now. We know how to bring in customers, it's just getting expensive. So how can we bring in the best customers, the customers that are going to make it worthwhile to pay that CAC cost off and still find profitability? 

 

Chase Clymer  

Yes. 

 

Kristen LaFrance  

So... And if you can do it from... Go back and look at all your campaigns and do it that way. But also, as you're setting up new acquisition campaigns, then you're already ahead of the game if you're thinking about it in this light. 

 

You're not going to be putting as much catch up, because really all this is is just it's taking a pause and you're saying, "Okay, let's look at what we have here. What kind of customers do we have? Who is staying on for 6+ months? And what do we need to do to keep getting more of them?"

 

Chase Clymer  

What I'm hearing there is a lot of valuable information when it comes to... I'm going to not throw a jab at performance marketing

 

But, sometimes people are sacrificing the quality of the brand and the quality of the message, just to make an extra buck. And when you go that direction, it is completely opposite to this retention-based mentality. 

 

You need to be --from day 1-- thinking about keeping that customer around longer and making sure the messaging, is in line and making sure it's on-brand. So instead of just making that one sale, you can turn them into a lifetime customer and a fan of the brand.

 

Kristen LaFrance  

Yeah, exactly. And it's so huge to be doing that from day 1. So you're not playing that catchup game. And it is tempting to just throw some money into an ad and get a bunch of customers, get a bunch of sales. 

 

And one thing is, it's just KPIs that people are held to. If your marketing team is just held to sales, then it's a lot harder for them to take that step back and say, "Alright, what kind of sales though?" 

 

And so if we start looking at it in this holistic view, and saying, "How can we get them from the beginning and expect them to stay on for longer?" That's really what we're having to do now, as CAC prices rise. 

 

It's just the shift that we're being forced into. But it's a good force because it means we're just having to treat customers better. And that's the goal that we should all have anyways.

 

Chase Clymer  

Yeah. I think I... I am actually happy about it because it is causing brands to really think about their content in these ads and the creative in these ads, and they really need to stand out. 

 

And that's something that I've always said since day 1, all of our clients that have really put a good effort into creating amazing content are the ones that actually are succeeding now that... You can't put $1 into Facebook and make $10 anymore without trying really hard. And I remember the golden days where you could...

 

Kristen LaFrance  

Yup.

 

Chase Clymer  

...put up a terrible, terrible ad and it would convert. It's different now, Facebook isn't performing like it used to, and you really need to think about everything you're saying and making sure that your creative and your messaging is on point.

 

Kristen LaFrance  

Yeah, exactly. Because, consumers are getting more and more used to buying online, which is great. But it also means they're getting more and more used to being sold to online. So just a crappy ad is not going to get customers like it used to. 

 

Customers are looking for experience and they're looking to connect to the brands they buy from because there are so many brands. So you do have to stand out from the very get-go. And I agree. I love this shift. 

 

I think it's a great thing that the industry has been forced into. Because it means that brands have to be more creative, and they have to really hold true to their values, and have a mission, and have care behind what they sell and who they sell it to. 



And I think that's what the best companies out there are already doing. So, seeing smaller brands can be pushed into this is really exciting. 

 

Chase Clymer  

Yeah.

 

Simplr Ad  

Support for today's podcast comes from our friends at Simplr: a new way to staff 24/7 sales and customer service on your Ecommerce store.

 

It works with your existing email and chat platforms, so setup is quick and easy. 

 

Simplr's network of on-demand, US-based, Simplr specialists are standing by to answer your customers' most common questions. 

 

Set it up for free today and then turn it on or off depending on your customer volume. You only pay $2.25  for every resolution. There are no hidden fees, contracts or minimums. 

 

Close more sales with Simplr by staffing your email and live chat around the clock with Simplr specialists. Start your free seven-day trial at simplr.ai/honest.

 

Chase Clymer 

And you just said there's so much competition. I want to talk about that. There is a ton of competition. Just, for example, say you have a small brand that sells... I always use shoes, so I'm going to do that again. (laughs)

 

Kristen LaFrance  

(laughs)

 

Chase Clymer  

What's the difference between them buying that product from you and then buying it from Amazon? And the difference is having a brand behind it, having content behind it, telling a story. 

 

And that is more value to a customer than just the need that buying on Amazon fulfills. So that's what you need to consider here, creating this content, telling an amazing story, be focused on winning a customer and winning a fan of your brand, as opposed to just making that sale.

 

Kristen LaFrance  

Yes, yes. Exactly. Because Amazon, you're never going to be Amazon on ease of purchase and shipping, and just what you go to Amazon for. You can search it, buy it in one click, and it shows up at your door in a day or two. You're never going to match that. 

 

But what you can compete on is the personalization, the experience behind the purchase of. If it's just a pair of shoes that they can go buy on Amazon, then it's just a pair of shoes. 

 

But if the shoes that you're selling, have a story and a mission that the customers are connecting with, and they want to engage with, and they want to support, then you've got something so much bigger, and Amazon can't compete with that. 

 

That's what you have to do to stand out from the behemoth that is Amazon right now.

 

Chase Clymer  

So, do you have any examples of brands that you see out there that are following this model?

 

Kristen LaFrance  

Yeah, definitely. BarkBox is one that I always reference. Because if you go through any of their marketing collateral, their ads, their social feeds, their blogs, everything, they know who their customers are. 

 

They're talking to exactly the people who want their stuff which is people exactly like me, who have dogs, and are obsessed with their dogs, and will do anything for their dogs. If you go and look at all their stuff, they know exactly what they're doing. 

 

Their marketing for the best people and they're not marketing to... There are probably age groups that they're not marketing to because they're not caring about getting a box of toys for their dogs every month. You can see it in all of their stuff. 

 

Another one is Casper, they do a really good job of this. Some of their Twitter (posts), as I've seen recently, are so simplistic that it's just a puppy on the mattress and it says, "Don’t let us convince you to buy Casper, let this puppy do it." Something as simple as that. 

 

But it's just proof that they know their customers because you look at the comments underneath that ad and there's like 45 retweets of an ad. And all these comments with people saying like, "Oh, I love the mattress and I love you guys. This is so funny." 

 

They know their customers because their customers are responding to their ad. So they know what kind of things are going to drive people to them. I saw it and I was like, "Hmm. Maybe I need a new mattress because that's adorable." It works. 

 

They know just small details about their customers’ lives and small details about what they want and what they react to. And so they're able to put that into their marketing.

 

Chase Clymer  

Absolutely. So, I'm sold on this idea I want to get this implemented within my business, what are the next steps I can take to make improvements to what we're doing?

 

Kristen LaFrance  

Yeah. So the first thing is just a step-back action. Before we get really into creating new stuff and editing stuff for retention, you have to take a step back and get to know your customers. Like I said, I'm going to say that a lot. If you don't already know your customers, then you have a lot of work to do. 

 

You’d be surprised by how many companies that I've seen who never really get to know their customers, they never really established buyer personas before they embark on a new acquisition channel. 

 

So this is really where we have to pause and think about retention. So, the first step is going to be to get to know your best-fitting customers. So these are the VIP customers, your most successful ones. The ones that post about you on social media. They've been subscribed to your subscription for a year or two years. 

 

They bought 5 items from your brand last year. They've talked to your support team. They’ve had a great experience. They love your brand. All this stuff. 

 

These are the customers that are going to help shape your retention-based acquisition channels. So we really got to get to know them. 

 

  • What characteristics define these types of customers? 
  • What are their goals? 
  • What are their daily lives like? 
  • What are their interests? 
  • What bigger problems are they looking to solve? 
  • How did they hear about you? 
  • What if they bought it from you? 
  • How have they interacted with your brand? 
  • And really, most importantly, what in their experience made them so loyal to your brand? 

 

So to find these, you can start by going through those VIP customers, send them a survey with an incentive like, "Hey, we'd love to just send you the survey. We'll give you a free product or a discount on any product you want." And then you can gather insights that way from them directly. 

 

You can also look at your site data to understand the journey. Go through social media channels and see the people who are commenting. What are they saying? And you're just qualitatively collecting "data" on these customers and their behaviors as they interact with your brand. 

 

So you want to be able to answer all these questions and then start going through and find the commonalities between the customers, be it the experience they went through, their characteristics, a mix of all those things. 

 

You want to figure out what these VIP customers have in common. And then from there, hone in on those characteristics to start creating your best-fitting customer buyer personas. And there's probably going to be multiple of them. 

 

But you just want to create these personas of, these are the people who love our brand, love our products, and they get it right away and they stay for a long time. So you want to make sure those are extremely detailed. 

 

You want to feel like you know, Jan from Boise, Idaho who's been buying your coffee for three years. You want to feel like you know her. You know her hopes and dreams, you understand her motivations, the inspirations, and the issues in her life that she's dealing with. So really making them feel real. 

 

And then, now that you've got all the best fitting stuff mapped out, we gotta take it one more step before we get into that action. And this one's really big because I haven't seen many companies really taking the time to go to this step. 

 

And this is going to be doing the same practice we just did with best-fitting customers, but doing it for your worst customers. 

 

Because no matter how great your products are, how seamless your subscription is, how much your customers are engaged, all that, there's always going to be someone who's just not going to find value in your product, who's going to buy one and they don't love it, or they enjoy your subscription and they cancel in month two, and that's just going to happen.

 

There's always a level of churn that's uncontrollable because we're selling products to human beings. So our job is to figure out who the bad fitting customers are. 

 

Who are the people who aren't finding that value in the product? Who isn't connecting with you as a brand?

 

And you're going to be able to find a lot of these customers probably in support channels, asking a lot of questions, complaining, asking for discounts. 

 

Which customers bought one product and then never again, engage with your customer, that's a good place to find these bad fit customers. 

 

And then, just like we did with good fitting customers, you're going to gather that data, try to figure out the common characteristics of these people to create them, your bad-fitting customer personas. 

 

  • What characteristics do you see in common? 
  • When did they churn out on the subscription?
  • Do they give a cancellation reason? 
  • After a single purchase, what actions did they take or not take, and what expectations did they come in with? 
  • How did they find out about you? 
  • Why did they choose you? 
  • Did they go to another company? 
  • Are they getting their vitamins elsewhere? 
  • Or did they lose interest in the product altogether and stop using vitamins? 

 

All these kinds of questions that you need to figure out. What it is about them that makes it not a good fit for your product. 

 

And this is where a lot of times companies have to be able to take a step back and really separate the personal stance from the business stance. It's really easy to kind of blame the customers to say, "They didn't do this. They didn't click on this link after they bought it. They didn't open our email. They didn't follow us on social media. Of course, they're not going to get incorporated with the brand." 

 

But what it really is, is that there's more likely something in their lives, and their characteristics and their actions that just don’t match with your brand. 

 

And that's okay, you just have to be able to start figuring out what that is so you stop marketing to them. 

 

But really simply put, you shouldn't try to be helping people who don't need your help, or trying to sell products to people who don't want your products. So, that's really the first step. It's not the most exciting stuff. It's not a bunch of action stuff. 

 

But is getting to know your customers, both the best ones and the worst ones so that you have basically a Northstar to guide you into all your creation of campaigns.

 

Chase Clymer  

Absolutely. And I want to talk about creating those customer personas for your bad customers real quick. That's something that a lot of people don't do. 

 

Kristen LaFrance  

Mm-hmm.

 

Chase Clymer  

A because it's more work, but B because they're like, "Why is that helpful?" Well, right now, I'll tell you the reason. It's because you can exclude those people from seeing your Facebook ads, and then drastically lower your cost of acquisition.

 

Kristen LaFrance  

Yep, exactly.

 

Chase Clymer  

So that's why you do it. Awesome. Well, I can't thank you enough for being on the show today. Is there anything else that you'd like to share with our audience?

 

Kristen LaFrance  

Oo, I don't think so. I think that's all. If anybody has any questions about Churn Buster or this crazy topic of retention based acquisition, and you can send me a direct email at kristen@churnbuster.io or follow me on Twitter. I tweet a bunch of stuff about Ecommerce, retention, everything. That's @kdlafrance.

 

Chase Clymer  

Awesome. Thank you so much. 

 

Kristen LaFrance  

Yes, thank you. 

 

Chase Clymer  

We can't thank our guests enough for coming on the show and sharing the truth. links and more will be available in the show notes. If you found any actionable advice in this podcast that you'd like to apply to your business, please reach out at electriceye.io/connect.

 

Annette Grant  

Please make sure to subscribe to Apple Podcasts, Spotify or your podcast app of choice.