From Sign-Up to Superfan: Dale Harrison's Secrets to Successful Customer Onboarding

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Mark Evans: Welcome to Marketing Spark, the podcast that brings you actionable insights, strategies, and stories from b to b and SaaS entrepreneurs and marketing leaders. I'm your host, Mark Evans. Today, we're discussing one of the most critical components of customer success, onboarding. Now, when we think of onboarding, we often think of it as a one time process. Get the customer started and then move on. But in the b to b SaaS world, onboarding is so much more than that. It's the moment when your product either becomes indispensable or forgettable. As important, it ensures that customers see value quickly. They can determine whether they wanna stick around for the long haul or churn after a few months. Given the importance of onboarding, many companies fumble the ball. Their initial communication with a new customer is generic, uninspired, and does nothing to build product usage, trust, brand affinity. Bad onboarding is a puzzling and troubling marketing mystery at a time when it's a huge challenge to attract, engage, and win customers. My guest today to talk about onboarding and lots of other things is Dale Harrison, an experienced marketer who comes at it with a perspective informed by mathematics, statistics, and finance. Today, we'll explore how businesses can improve their onboarding processes to reduce churn and, as importantly, drive long term customer loyalty. Before we get started, here's a quick word about MarketingSpark's newest sponsor, Leadfeeder. Leadfeeder is a tool that helps you cut through the data and turn your website visitors into solid leads. Imagine knowing which companies are checking out your site, tracking their behavior, and integrating all of this with your CRM. It becomes your secret weapon for targeted lead engagement, making it easier for your team to convert website traffic into sales. Head to leadfeeder.com forward slash try for a free demo. When you let the rep know that you found out about Leadfeeder through the Marketing Spark podcast, you'll get a free extended premium trial. Dale, welcome to Marketing Spark. Glad to be here. Let's start with a softball slash onboarding one zero one question. What is customer onboarding, and why is it so important to set the stage for a successful relationship and ultimately reduce churn? You've done a lot of work on this. You recently published an in-depth research report looking at onboarding. I wanted to bring you on the podcast to provide us with an insight into a topic that fascinates me.

Guest: One of ways I describe onboarding is it's like dating. If you think about the customer's experience with the product, it it comes in three phases. The initial phase is, you know, all the click marketing, all of the smooth talking sales sales conversations. That's equivalent to your dating profile. And then there's the dating, which is trying to figure out, is this thing gonna work, and is it gonna turn into a real relationship, and will we move in together? Then at some point, if the dating's successful, you move in together, and and then you've got the lived experience of the relationship. And there's a there's some very good parallels between a customer's experience of your product from initial awareness that you exist all the way through hands on usage of the product and what people go through with dating. What attracts someone initially at their own online dating is you got a great profile. You you look great in the picture, so they swipe right. And but all that does is it gets you a chance for them to try you out or or for each other to try each other out. If you showed up at that first date with wearing sandals with white socks and having bad breath, or if the first thing you say is that you really wanted to have your baby, there's probably not gonna be a second date. And and you can't and if you screw that up, you can't fix it by saying, oh, look for it. What a great dating profile I had. And this is this break between everything that was said during the sales and marketing process and then what happens during that onboarding process where they're they're trying to figure out how to establish a relationship with the product. If that process is bumpy, you cannot go back and say, oh, but look at the great marketing we have. Nobody cares. What you're trying to get what you're trying to accomplish with that onboarding process is to move them from a state of not knowing how to use the product and not having the product integrated into their processes to a state where they not not that they necessarily like everything about the product, but it meets their expectations, and they're willing to make that investment to fully integrate it into their work processes. And in the same way, a lot of relationships aren't with people who are absolutely perfect in every way. They're good enough in most ways and very good in particular ways that count. This is very much the same with product, is that no product is gonna be perfect. There's gonna be things that you really wish it did or you wish it did better, but does it get the job done for you? Is it worth making the investment? Again, it's very much like dating. But then when you move into the actual long term usage of the product, again, you have this sort of lived experience with the product. And what matters at this point, once you're past that kind of past the dating phase or past the onboarding phase, is that so nothing that marketing or sales has ever said in the past or will ever say in the future matters. What happened during the onboarding process is gonna determine what the trust levels are. But what really matters once you move in together is what's the lived experience of living with this person? If it turns out that you've got that your partner discovers that you have a hair trigger anger issue, that that she has to keep calling the cops on you, that there are temporary restraining orders, You cannot fix that by going back and saying, hey. Look at what a great dating profile I had. Because, again, nothing that marketing and sales has ever said or ever will say in the future matters at that point. It's that lived experience. What happens is that once you've gotten through the onboarding, what matters is the product doing the job, is it working, what's the lived experience of the product. But your perspective on that lived experience of the product is gonna have a lot to do with the onboarding. One of the things I always talk about is how a poor onboarding experience will leave a sort of psychic scar that can never completely be healed. And, again, going back to to to personal relationships, if if once you move in together, it turns out that you're a selfish narcissist, but there are hints of that during the dating, they're gonna say that this guy was clearly always a selfish narcissist, and now it's really coming out. If you were if if the dating experience was really good and you were very generous and even tempered, you're gonna have there's gonna be trust there, and there's gonna be you know, maybe he's going through a bad period because I know he's a good guy because I I saw him at his best and when we were dating. And so willingness to stay in the relationship is gonna have a lot to do with the trust that was built during the onboarding. Even these things the same sort of of middle models are gonna work with onboarding with products. If if the salesperson is directly lying to you about the product, if the onboarding the customer success people are gaslighting you during the onboarding, if they're telling you that it's doing that it's doing things when you clearly know it's not doing things, there's gonna be a lot of trust issues. If anything breaks down in the future, even if they stick with you, if anything breaks down in the future, you're gonna have that history of miss there's gonna be a tendency to interpret a bobble, some sort of a stumble with the product in the future is gonna be interpreted through the lens of, is this fundamentally a company I can trust, or is this a fundamental fundamentally a company that has proven that I can't trust them or I can't count on them to be there when I need them? There's really no way to fix that. You got one shot at being able to create that initial impression, and that's during that early onboarding phase.

Mark Evans: You and I appreciate the importance of onboarding to set the tone for the relationship, establish the rules of engagement, to maintain that delight factor that validates someone's confidence in our product and the fact that we're gonna deliver the goods, that we're gonna meet the brand promise, and that we're going to allow them to say, yes. I made the right decision. But I guess the question is, in your experience, what are the biggest mistakes that companies make during the onboarding process? What don't they do? What do they take for granted? Where do they drop the ball? Because I look at a lot of onboarding, and I sign up for a lot of products. Some of them paid. Some of them free. Very rarely will I come across an onboarding process where I see will receive one, two, or three, or four onboarding emails where I go, that is smart. That is prescriptive. That is offering me value. This is a company that I like and I trust, and I see that they're vested in my success as opposed to simply seeing my relationship with them as a transaction. Where do they go wrong? You've got smart marketers. You've got smart salespeople, but many companies fumble the ball.

Guest: It's going back to the dating analogy. It's like the person who gets the first date that thinks that they've won the game, you know, and not realizing that, no. The the game is just starting. I think a lot of companies treat the onboarding process with disdain because it's we already got their money. On to the next one. That there isn't a sense of any kind of a serious commitment to the long term relationship with that customer. That it's all considered a nuisance and a cost that you just wanna sweep away as quickly and cheaply as possible rather than really deeply thinking about it. And I'll give you an example. I've got a a client right now, and one of the early things that we did was look at their what happened in their churn process during the onboarding period. And what we saw was pretty dramatic. And in terms of a very high loss rate, now it's a SaaS company. It's a PLT product with a free tier is often the entry point with the idea of then converting them to one of the paid tiers. So a very classic sort of SaaS business model. The problem was that there were just there was very little in the way of video and text documents to help them onboard. When you can't and a lot of it is a lot of the onboarding is baked into the design of the product. In this case, you would go through the sign up process, and then you would be dumped onto this dashboard in the product with no absolutely no idea what you're supposed to be doing first, second, or third. It's up to you to figure it out. And and it so one of the things that we did early on this was to sit down and ask the question, what are the different types of customers with different use cases, and what are the things that each of those types of customers need to do specifically first, second, third, and fourth as they come on board? Part of the problem was that there was product blindness within the company. Everybody was so deeply steeped in this product that that they looked at it and everything seemed completely obvious and intuitive because they were just so familiar with it and had used had used it internally for so long. I had not used the product. One of the things that I did was as an early part of this project was to basically come in as a brand new account. And they actually had three separate product lines. I did this with each of their three product lines. And bring myself all the way through the onboarding process. And I did this in the form of videos. So I would record everything I was doing with a voice over narration where I'm I'm stream of consciousness, mentally saying it out loud what it is I'm confused about, what it is I think I should do next, what is it that I'm looking for that I can't find. All the stumbles are there. And then I did exactly the same thing for each of their major competitors so that we now have a clear set of comparisons. And and out of this was a lot of very surprising information. So one, a lot of the competitors were equally bad, but some of the competitors did certain things quite well. So we were able to then cherry pick the best that their competitors across the category space were doing and incorporate those. Now the other thing was because we had this sort of voice narration of an actual onboarding experience, you were able to highlight the stumbles and highlight the likely places that people were gonna get confused. And out of that process, we then developed a set of kind of customer types. So there are slightly different types of customers that had that they were gonna use the product in a slightly different way. So certain features, it was really important to get set up first. Others were never gonna use certain features, so you never really needed to set it up. And and we came up with an onboarding sequence for each of these major types of customers, and and we came up with a simple set of questions that would allow the customer to self identify. Yeah. Are are you trying to do this or this? If you're trying to do this, then this is your onboarding sequence. This is what you need to do first, second, third. And then there were both written instructions with step by step with screenshots, and then there was video walk throughs because you have different kinds of learning styles. And some of this work is still underway in terms of developing the all of the onboarding videos and documents. But the idea was to really get for the company to get out of its head and to see the product through the eyes of a brand new customer who had never seen the product before. And this is, I think, where 99.9% of companies fail is that they are incapable of getting out of their head that either you have customer success team, which is deeply steeped in the product, trying to put the walk throughs together, or even worse, you have the product development team putting the onboarding sequences together. And their problem is that not only do they are they ultra familiar with the product, they know too much about what's going on on the back end and to to be a reliable teacher of how to work your way through the initial onboarding. So you really absolutely have to have an outside actor that is willing to walk through that entire onboarding process, but being knowledgeable. Again, one of the advantages I have is early in my career, I came out of software development. A lot of what I did involved designing very complex UI UXs. So I have the advantage of coming in with that perspective of having seen a lot of user interfaces, having engineered and detailed a lot of UX experiences. And and I had the advantage of being able to see it with a slightly more experienced eye. I was still a neophyte for that particular product. I'm still stumbling through, but I have some sense of what I should be expected to see and which helped me to be able to more precisely define not just the stumbling points, but what the solutions were gonna be. Right? That, for instance, there were very critical things that were like on a second tier menu that should have been pulled up to a top tier menu. The only way to find where it was to systematically go through every top tier menu looking at every secondary menu selection to find it. And yet, it was absolutely vital to to select that choice to be able to go through the initial onboarding. There were details about the product engineering that really needed to be fixed in this process as well. This is often the case with just software products. I've also have done engineering work around platforms, about physical, like robotic platforms. And we have a very similar issue with physical devices and instruments is that the what the engineers think is intuitive is often not intuitive when you start to put it in front of real people. The only way to know if your machine device or piece of software is gonna work is you put it in front of a neophyte and have them struggle through the process of trying to figure out how to use it and videotape it. And not just videotape it, but record that stream of consciousness talk out loud. Have them tell you what's inside their head as they're going through it so that you've got some understanding of their internal mental state as they're grappling with all of these options.

Mark Evans: It seems weird in a in an industry like SaaS, for example, in which they throw out things like long term customer value, they talk about CAC. There's all kinds of metrics that they point to as far as being this is how we're successful. These are the things that we should rally around. And then you've got this ignorance or lack of understanding or lack of perspective when it comes to onboarding or blindness. Yeah. Blindness as well is that and and that's really interesting because you've got smart people who do who extensively do customer research. Customer secs should be talking to customers, and yet there's this blind spot that they can't see. I guess the question would be, what are the pillars for, if not the ideal onboarding process, but a solid onboarding process that sets the stage for success for the company and their ability to serve a customer and keep them loyal and generate revenue for a long time and success for the customer. And what are the steps or features that are nonnegotiable so that the customer gets off to a running start. They're happy with the product. They're happy with their decision, and that it's a win proposition for both parties.

Guest: Now I would say 90% of the problems that a company faces in the onboarding process are out of the control of marketing, out of the control of sales, and out of the control of customer success. It is baked into the engineering design of the product. And and this is part of what makes it hard because I think companies, the engineering team is so anxious to add the 14 extra features from the product pipeline in that nobody wants to go back and fix the crap they did early on. There tends to be in organizations an enormous reluctance to to step backwards in the product development process and fix stupid stuff they did instead of just constantly layering on new features. To a large extent, with many companies, whatever you do on the customer success side around onboarding is basically trying to patch up the mess that was left by product development. And this is part of why I think you need these sort of onboarding scripts where you have someone who's not familiar with the product go through the onboarding process, and you record that with their stream of consciousness. Because what you're gonna see is lots and lots of things that if the user interface had been slightly different, this would have been obvious, but instead, it's, like, completely hidden. Again, the example I was using of where there was in one particular step, there was an absolute vital thing you needed to see, but it was buried down in a secondary menu. All you had to do is to bring it up to its on top level menu, and suddenly it's right in front of you. And it would have been easy. And the short term fix is to have an explanation about, and when you need to do this, you won't find it in the top menu, but you have to go to this particular menu, and it's gonna be the third item down in this particular menu. And that's what you need to choose, where if you just design the product correctly to start with and I think part of this problem goes back to there is no there is no UX testing in ninety nine point nine percent of SaaS products out there.

Mark Evans: Right.

Guest: This is it is completely being done in kind of this closed hothouse environment that contains nothing but programmers. Even if you have a UX person, most of these UX people are not worth a damn because they can get the most obvious problems resolved, but they can't see where the problems are either unless you're doing a systematic UX testing program where early in the development, you're showing alternative versions of the interface to potential users, and you're watching how they interact with the environment and whether not they're able to figure out what's working and not working. And and it's simply no companies do this kind of of external UX testing during the development process. You you get really bad software. And even very large companies, anyone who has ever used Salesforce ever has experienced just how incompetent UX design can pot can be. And, again, if you're a, you know, if you're a super expert and you've used Salesforce for ten years, you instantly know where everything is buried. But if you've never used it before and you're trying to produce a particular sort of report that says a particular thing, good luck. It it is so deeply buried, and this is why you have this entire infrastructure of Salesforce consultants. Come in and and do what you need because the software is so badly designed that you can't figure out how to

Mark Evans: do it yourself. Right? So let's assume that you're a company that has been told by users in no uncertain terms that your onboarding sucks. It's incomprehensible. It doesn't add any value. It's uninspiring. In fact, it probably does more harm than good because I've made it it's a leap of faith to buy your product versus somebody else. After I hit submit on my credit card, I I get your onboarding flow, and it it's disappointing. And I immediately say to myself, I made a mistake, and I either churn then or I churn later. And the company recognizes the pattern. And they do some research, and they people like you or me, and they're told that your onboarding is a negative asset. It's actually forcing customers to turn away from your product as opposed to embracing it. So strategically, what would you advise a company if they wanted to take a big step back and say, okay, we need to reload on this. We need to develop an onboarding process that's inspiring, that's prescriptive, that establishes an honest and authentic relationship, and helps new customers get immediate value and ongoing value from the product. Where do you start? Like, it's a big thing I to

Guest: think there's two separate issues. One is, are there fundamental flaws in the UX design? And at some point, you're gonna have to fix those. The second issue is you could have a very well designed UX, but it's the package is doing something that's inherently complex. Even though the UX is well designed, you still need assistance in stepping through it. It's important upfront to divide out and it's always a mixture of these two, to divide out what portion of our problems is because simpler things are hard to do because we did a poor job with UX design, or simpler things are hard to do because it's an inherently complex package trying to accomplish inherently complex things. One of the keys there is getting a very clear sense of the different sort of use cases. And to give an example, if you look at something like HubSpot, there are people who use, you know, a certain subset of features of HubSpot intensely and never touch the other 80%. There'll be other people using a certain subset, but it'll be a different 20%. There's probably almost no one that's using every feature in the package. But what you'll see once you start to to go and look at real customers is that certain customers are using it for certain things that are different than how other customers are using the same package. So your customers are not all homogeneous. If you do not understand what those use cases are because I again, one of the big frustrations with especially for a complex package is the sort of onboarding where you're systematically teaching them every feature. What that means is you never bother to think through the fact that there are different use cases and that no one uses every feature. What you need are five different onboarding sequences for the five different categories of customers that each have a major use case. Now, again, there'll always be exceptions. You always want to have a more encyclopedic set of resources where if someone but give you an even better example is Photoshop. How many people use 100% of the features in Photoshop? Absolutely no one on the face of the earth. How many people use 5% of the features and get by perfectly fine because all they really need to do is to just go in and remove the background from this image, make it transparent so they can pull this out and put it on something else. That one task right there for years was complete brain surgery and Photoshop, the amount of poops you had to jump through. And only in recent years have they made it slightly better by actually pulling that one task out into into a separate function that you can more easily access, and it's still a pain in the ass. But there's absolutely no reason I shouldn't be able to pull an image up and with one click remove the background. But for whatever reason, Adobe has never managed to pull that one off. And but that's a very common use case for that product. Most people are doing a small number of things over and over again that represent a standard approach. And for and I'll give you another example is I think the reason that Canva and Figma have done so well is because Adobe did so badly with both their UX design and their onboarding. Because Adobe's idea of onboarding is to give you this massive feature dump of everything the product can do. No one has a head big enough to to take all that in. When you come up with packages like Canva or Figma that take 5% of what Photoshop can do, but you take the most important 5% and you make it as easy as possible, and now you've got a billion dollar There are entire product products like that exist because the incumbent products couldn't get their act together in terms of UX design and in terms of onboarding design. Right.

Mark Evans: Wanted to ask a couple more questions. One, just going back to a comment that you made that once onboarding starts, it doesn't matter what the customer what marketing told them before or what marketing told them after. So I'd like your advice in terms of let's say the onboarding process is okay. Let's say it's not terrible. What can companies do from a communications perspective to stabilize the relationship to mitigate the the risk of churn? Very little.

Guest: That's the onboarding.

Mark Evans: Well, if you're saying,

Guest: you know, it's a

Mark Evans: if an onboarding you have a if you've had a bad first day, you're never gonna recover.

Guest: Is that what you're saying? Right. Yeah. If you show up at that first day with bad breath and you're wearing sandals with white socks, you know, there's not much you can say or do at that point where you're gonna recover. And you see this with there's a couple of different very interesting, I think, pathological behaviors that I see in marketing groups. One is this idea of customer marketing. So we're going to we're gonna keep marketing to them, to the existing customer base so that we can keep telling them how great the product is. That's called gaslighting. If they know that this product is a piece of crap, nothing you say is gonna change their lived experience. All it will do is to make them think you're a psychopath. A lot of customer marketing, really, when you tear it apart, is just expensive gaslighting that does nothing but but tear down the trust of the company. The second thing that I see, the second marketing behavior I see is a lot of companies will start to do either very targeted, like retargeting ads to you or very specific email campaigns in, like, the thirty days before renewal. And the problem with this is that nothing you say is gonna overwrite their lived experience with the product at that point. That what they think about this product is gonna be based on their personal human experience of using it. And if you say something that's consistent with that personal experience, that would be acceptable. But if you say if you try to tell them, oh, no. That's not actually what you experienced. What you actually experienced was this much better thing, They're gonna fake your sociopath. This is very destructive behavior because if they have decided to not renew by thirty days before the renewal period, they're not gonna renew. There's nothing there's not much you're gonna say or do. The only possibility is to give it to them for free or cut the price in half. You might be able to salvage some. But at that point, it is really about the lived experience with using the product that is driving their understanding. And again, the same way with if if you're in a relationship and you're living with someone who is an abusive an abusive partner, you're not gonna fix it by suddenly giving them a Valentine's a Valentine's Day card. You know? You're still gonna be seen as that abusive partner that I wanna get the hell away from. Right. Doesn't matter how pretty the Valentine's Day card was. Again, it really goes back to the product.

Mark Evans: Let me ask you that question in terms of churn analysis that companies can conduct during the onboarding process, whether it's depending on on the length of the process. Are there ways that a company can identify the likelihood of someone churning during those early days? And if so, how do

Guest: you do that? One of the problems and I think this is one of the reasons why onboarding is not seen as a vital and critical component is because the way that churn analytics is done is deeply fundamentally broken. Because a typical churn report is gonna look at it's gonna answer the question of all the people that were active this month, how many people churned? And you're either gonna do an account churn report or revenue churn report. For right now, let's just talk about account churn, so logo churn. So what their report says is that we have 10,000 customers and a 100 of them churned, or so we've got a point 1% churn rate. The problem with that is if that 100 are all people that came on board in the last thirty days or 50 of that 100 are people who came on board in the last thirty days, that tells a very different story. It's not we don't have a churn problem. It's you don't understand what the churn problem is. I've done this for now twenty five years. I've worked in other industries that where repeat systematic purchase of product was a core part of the business model without a contract. One example you can think of is, like, the dry cleaners. Every week, you drop things off of the dry cleaners. Usually, the same dry cleaners. Usually, there's a long term relationship there. You don't have it's not like SaaS where you've got a contract. So it's not like you've got a one year long contract, and you're forced to keep going back to the dry cleaners for a full year no matter how much you hate them. What's important to look at isn't the churn rate as it typically calculated because that basically will absolutely minimize the problem. And what gets even stupider is when you throw NRR in, so net revenue retention. Because let me tell you, NRR was invented to hide what's really going on in churn. NRR is meant to gaslight the CFO and make them think that things are better than it really is. Should you be tracking increases and decreases in revenue per account? Absolutely. That's a separate report. To layer that on as as part of your churn analysis is intentionally fraudulent and deceptive. What you need is to see what is the base underlying logo churn rate and revenue churn rate that we're experiencing. But more fundamentally, going back to this issue of the way the churn rate's calculated, if you've got a very large customer base, even if you have a very high loss rate in the early stages of of new accounts, it's gonna look very tiny because if you got 10,000 customers and you're adding a 100 customers a month, even if you lost all of them, it would look like you had a very small churn rate. So what you really wanna look at is what's called the what I call the cohort survival rate. Meaning, of everybody who came on board this week or this month, how long did each of those accounts last in the system, and what does that probability curve look like? So how many days or weeks did they survive before they churned? The other thing is you've gotta come up with a more flexible definition of churn. You really see this in a very stark way with PLG products with a free tier because there, if they've come on board for free, they can leave for free. If you don't have a PLG product PLG business model, everybody that comes on board signs a one year contract. The same exact behaviors are happening, but now they're hidden because you don't see that until the one year part point when it's time to renew the contract because you're holding them hostage for a year because you've got a contract. This goes back to product development. You've gotta be able to instrument the software so that you can actively monitor engagement and activity levels within an account. How many seats are logging in, the total seats available? Of the seats that are logging in, how many hours are they spent? How many individual task points are being executed. You need to be able to harvest that kind of software at the account level. And this is very easy to do if you think about it from the from early on when you're designing the software. Because especially with SaaS, it's all running on your servers. So you get to you get complete control. But what you need is you need some ability to look at engagement levels. Because what you will see happen is that people that have given up on the onboarding basically just park the software. You'll see usage levels very low or significantly lower than the usage levels of people that are of other accounts that have long incumbency. And you'll also see, at some point, if they're switching to another account, you're gonna be able to see this drop in usage as they're starting to move their people off onto from Photoshop to Figma. Again, you can see this as an early warning. The problem with most companies is the only warning they have is when renewal doesn't occur. So you're really masking a lot of what's going on. And the deal is the only people who get hurt by that is the company, the the SaaS company. Right. But two word analysis is critical because you really have to think in terms of how long did accounts stay active before churning. Give me there should be a number that is x number of days or weeks or months that they're active on average before they churn.

Mark Evans: Lots of great insight, lots of perspective, lots of food for thought for marketers and companies in general in terms of how they design their products and how they market them and how they onboard. Where can people learn more about you and what you do?

Guest: Mostly on LinkedIn. So Dale w Harrison. I write about this and other things related to marketing. By the way, I threw one one last thing in for people to think about. Going back to the to just to close off the cohort based analysis discussion. If you do this sort of survival analysis where you where every single account, you're tracking a number of how many weeks have they been active in the system before churn, What you will see typically and I've seen this for twenty five years. I've seen this over and over in companies, both SaaS and non SaaS, that that the rate at which people drop out of a system is like falling off a cliff in the first thirty to ninety days. They have a very high loss rate. Even if they're not officially churning, you'll see the usage of the product drop in that first thirty to ninety days. And then at some point, there'll be an inflection point where the loss rate will then radically change into a long term stable pattern. One of the things about these patterns is that both the early churn rate during the onboarding period and the long term churn rate follow what's called a Poisson distribution. And what that means is that you're losing customers on a predefined half life, just like radioactive decay. So there is some period of time, maybe it's nine months or fourteen months, where post onboarding, you're gonna lose 50% of your logos in fourteen months. And of the 50% that are still active at fourteen months, fourteen months later, you're gonna lose half of those. Fourteen months later, you're gonna lose half of those again. That it is this decline curve or loss curve is extremely stable. And what I have seen is this is stable over on the order of years and even decades with companies. This is an extremely difficult number to change. By really focusing on the onboarding process, you can dramatically salvage those early accounts that would have that were bailing out of the software or bailing out of whatever the purchase is very early on. You can salvage those accounts and get them into the long term customer base. But once they're in that long term customer base, there's very little that the company can do to substantially alter that customer half life. It tends to be one of the most sticky, most stable numbers. And 99% of the stuff that people talk about around customer retention is just bullshit. Because what happens is, yes, you can do exit interviews. They're not gonna tell you the truth. Yeah. When when the person you're dating says, oh, I really need to rearrange my sock drawer this weekend. I won't be able to make a date. Yep. They're not telling you the truth. Neither is the customer who bailed out of your product. They will not tell you the truth. You cannot rely on that sort of surveys or asking them. It is very difficult to and and in many cases, not even the customers are necessarily fully aware in their own minds of why they why they left this product and went to another one. It's very complicated. And if you look at it from a statistical standpoint, what you're seeing is the account loss rate is following this decay curve with a half life. But the individual accounts that are leaving, it's as if they've been selected by random. There is no right or reason for why certain accounts leave and other accounts stay. Now one of the things you can see is you can start to segment out by things in terms of different types of accounts or how the accounts were acquired, and they can have somewhat different loss rates over over time. One of the things I tell people is the number one tool for minimizing your long term churn rate is to choose better customers up front. Certain types of customers that are going to be inherently longer lived in in your system than other types, and yet they're all gonna cost you the same to acquire. But if you can preferentially acquire customers and I'll give you an example. If you're selling software into the ecommerce space, it turns out that if you're selling to customers that have their ecommerce store on Amazon, they tend to be much more stable long term than customers who have their store on Etsy. And yet, it it's gonna cost you the same to acquire an Etsy customer versus an Amazon customer. So you're much better off pouring all your marketing resources into acquiring Amazon customers and avoid actively going after Etsy customers because you're gonna you're gonna be able to impact your long term churn rate for your product because you're choosing a cuss a customer cohort that is inherently longer lived in the environment.

Mark Evans: Well, thanks, Dale, and thanks everyone for listening to another episode of Marketing Spark. If you enjoyed the conversation, rate it, subscribe via Apple Podcast, Spotify, or your favorite podcast app, and share via social media. And if you're a b to b or SaaS company with 1,000,000 to $10,000,000 in revenue looking for traction to scale, we should talk about how I can help you as a fractional CMO and strategic adviser. You can reach out to me via email, mark@markEvans.ca. Connect with me on LinkedIn or visit marketingspark.co. I'll talk to you later.