[Video] Continuous Customers Panel from the Recurring Revenue Conference 2018
This video was taken during the Recurring Revenue Conference 2018. It featured a panel of esteemed thought leaders to discuss how to find, keep, and grow continuous customers. It was moderated by Jeff Wissink, Managing Director of Navint and included panelist Jon Ferrara, CEO of Nimble and Jerry Jao, CEO of Retention Science.
A full transcript follows the video. Thank you to Sutton Capital Partners for hosting the conference and providing footage of the continuous customers panel presentation.
[00:06] Jeff Wissink, Navint
[music] Morning, everyone. I think we are in the enviable position of being the last panel right before the break, so we’ll make this entertaining. So as Jon and Jerry and I were talking last week and preparing for this panel discussion today, we thought we should probably spend a minute or so talking about this concept of the continuous customer and what it really means, right, before we kind of talk about how we’re going to find them and grow them and keep them. So and maybe the way that I’ll do that is rather than kind of putting up a picture and talking to a graphic, is I’ll tell a little story and the story is really– this was really something that came across my Instagram feed, of all places, yesterday as I was on my way out here to sunny Los Angeles. And it really struck me as being a very good way of describing what the continuous customer is not, right. And I’m just going to read this to you because first of all, I think it’s hilarious and I don’t want to screw it up. So this is a post from a woman on Instagram. Her handle is @GirlFromBlupo. I think I’m pronouncing that right. And so @GirlFromBlupo was talking about a recent transaction she just had with Amazon.com and she continues. “Dear Amazon, I bought a toilet seat because I needed one. Necessity, not desire. I do not collect them. I am not a toilet seat addict. So no matter how temptingly you email me, I’m not going to think, ‘Oh, go on, then. Just one more toilet seat. I’ll treat myself.'” Right. So I thought that was a– so the @GirlFromBlupo is clearly not what we would call a continuous customer. She is not seeking a recurring revenue relationship with Amazon.com to buy more toilet seat, right.
[02:01] Jeff Wissink, Navint
So I bring that up. It’s a silly example, of course, right. The point here, though, is that if we apply the wrong kind of paradigm to find and grow and keep our customers, we run the risk in the best case, really, of just being ineffective. And at a worse case, maybe even coming up with some somewhat hilarious consequences, right. So with that, that’s the continuous customer. That’s what we’ll talk about today. I managed to work in toilet seats into my opening diatribe here, so there we go. How’s that for a transition? So let’s talk about finding– first of all, let’s talk about how we find continuous customers. And Jon, maybe I’ll start with you. Talk to us a little bit– I noticed on your website, you guys actually as a find strategy have a 14-day free trial, as an example, right, with no credit card required. Talk to us a little bit about the efficacy of that strategy and maybe some other sort of find strategies that you work to introduce new customers to your business.
[03:04] Jon Ferrara, Nimble
Well, I think one of the biggest struggles is identifying your customer, reaching out, and building that relationship. We become their trusted advisor, to stay top of mind, so when they make a buying decision, they think of you. We all struggle with that. And I’m going to tell you two stories about how we built the Gold Mine brand and how we built the Nimble brand and how we find customers. So imagine me at 29 years old. I’d just invented contact management in CRM and before Outlook or Salesforce existed in 1989. I have a product and I have $5,000 in the bank. How do I get that product to market? So what I did was because I got my ass kicked at [inaudible] by the Nobel resellers, I figured out that the Nobel had a trusted relationship with my core prospect, individuals and teams of small- and medium-sized companies of decision-makers that need relationship management software so I went out and built relationships with them and got them to use it because people sell what they know and they know what they use. They, in turn, started to resell it to their customers. We never took a dime of venture at Gold Mine and 10 years later when we sold it, we had almost $100 million in revenue and almost 5 million customers and with Nimble, when I started the business, nobody knew what social CRM was. They didn’t even think that they could apply social to business. This was basically back in 2010. So what I had to do is identify the [inaudible] of my customer then and then there were some Google resellers but not much, and so there weren’t really resellers that were social in the cloud, and so I figured out that I needed to find the influencer of my core prospect in and around the areas of promise for my product, thought leaders in sales, marketing, social media, etc., and I built relationships with them by sharing their content, which then built my brand, attributing their name, starting a relationship. They, in turn, became our evangelists and recommended vendors, and that’s how we scaled the brand without spending any money on advertising.
[05:01] Jon Ferrara, Nimble
So if you think about the traditional funnel, it was built in 1800 and it’s archaic. It’s not a funnel anymore. It’s a pretzel and I really believe that we do need to do is you need to somehow figure out how to become the trusted advisor of your prospect, and you don’t do it by talking about how great your products and services are. Nobody cares. Start talking about how you can help other people become better, smarter, faster, and it’s a simple philosophy. If you teach people to fish, they’ll figure out you sell fishing poles and I have the five Es of that. It’s educate, enchant, engage, embrace, and empower your customers. And so the whole idea of bagging and tagging them, the Oracle aka Salesforce mentality of basically killing your customer and anybody in between, is over. Service is the new sales.
[05:50] Jeff Wissink, Navint
Right. Thanks. I’m guessing, Jerry, based on the nature of the software that you sell, you’ve got a unique perspective on this. Why don’t you tell us a little bit about how your company goes about finding continuous customers.
[06:01] Jerry Jao, Retention Science
Sure. And before I begin, I’m kind of curious. From the audience, how many of you guys are on the B2C side versus B2B. Raise your hand if you’re B2C businesses. Are you looking for recurring revenue for a consumer’s subscription box, okay. And then B2B? All right.
[06:17] Jeff Wissink, Navint
So more B2B.
[06:18] Jerry Jao, Retention Science
Yeah. So maybe two-thirds B2B. So we have an interesting product where– my business is a subscription business. We serve mid- to enterprise brands like Olay. PNG is one of our biggest clients and so we need to make sure they are continuous with us and that’s how we stay profitable as a company. And then on the flip side, we make sure that our clients can retain their clients. So we work with many businesses from Juicero, which had a famous sort of out-wrap last year, to Dollar Shave, who we’ve been working for more than five years now. Those are all different types of businesses that we serve that, from a continuous customer’s perspective, a lot of it comes down to do you have a product that people really want continuously? So I think your opening was perfect because if someone’s selling a bidet or toilet seats, you probably just don’t need that many. Versus when we engage with a new subscription businesses, we just look at their model. I could probably tell whether or not this business is going to work out in a year or two, because we’ve seen too many businesses kind of wrap up because of that. And for our business, and I agree with John, so much of it– I have a team of 10 client success managers that work with bigger brands that need a little more hand-holding because I think client service is the new sales form, because that’s how you keep them. And for many B2B businesses – and most of us probably manage and try to actually assess what’s our client turn rate – and then depends on the industry you’re in, different turn rate is– there’s different standards. So for us, because we’re in the marketing automation, personalization space, clients have a decent amount of options, so where we see success with continuous customers and retain them is through, at the end of the day, they need to be successful with us, there needs to be a very clear ROI, and in addition to the five Es, I think it’s really about delivering a very, very satisfactory and strong experience for the customer, so they like your software, it’s easy to use, and, for us, automation is a big piece. So what you could do using the Salesforce marketing cloud– you could use our software and then spend less of– a fraction of the time. So that’s where we bring value to the customers.
[08:37] Jeff Wissink, Navint
Great. You mentioned your customer success organization. I’m wondering– now this question to both of you, again. Let’s switch channels maybe and go towards the grow topic now. So we’ve got a customer on the hook. We’ve got a recurring revenue relationship with them. Let’s say, what does an upgrade path look like for your product or your services and what are the organizational components that get involved in sort of taking customers down that journey towards deepening those revenue relationships with you guys?
[09:07] Jon Ferrara, Nimble
So there’s a lot of ways to scale a business. Many companies today, SaaS companies, are building inside sales teams and customer success teams and using SDR and prospecting and all kinds of methodologies to try to sell direct. And I think there’s only 10 hours in a day that you could effectively do that and what you want to be able to do is sell 24 hours a day globally. And so what we did in the Gold Mine days is we didn’t sell direct. We sold through partners and we used things like CompUSA and Egghead to seed the market, and then fed those seeds into our reseller channel to scale it and the way we scaled our reseller channel and really our partnering was we built into [inaudible] server, exchange server, and NT server before those products were even known in the marketplace. And we acquired it for Gold Mine enterprise, thereby becoming the number one ISV for Microsoft globally and given our resellers ways to add value to products and services, and that’s really how we scale our company back in those days. Today what we’re doing is we’re, again, scaling our reseller channel, because I believe that rather than build an inside team, which we have and we do that motion of driving eyeballs 100,000 per month, converted at 10% [inaudible], 20% to paid, through no advertising spend, all through influence of market and of social and guerilla PR, but to scale globally, what we’re doing is we’re getting partnered with Microsoft and so we signed a reseller agreement where Microsoft is reselling Nimble with Office 365. We’ve positioned ourselves as the simple serum for Office 365 and G-Suite, where we then become a gateway drug to power [inaudible] flow, powerapps, as your– and even dynamic and linked in sales aggregator, and that is an amazing pole position to be in, because they are now globally pushing us into their resellers, into their distributors, into their hosting providers, where we don’t have to necessarily scale a sales team to do that. So that’s our growth strategy globally is to identify the trusted advisor of our customers and to work through their trusted advisors, their resellers, to scale it.
[11:24] Jerry Jao, Retention Science
Absolutely agree, and we have an inbound and outbound team as well and one of the things that we actually do is in our actual software, we have premium features where we have screenshots and we describe what they do. And so if you click on it and you’re on a lower tier of the software, it says, “Hey, contact your client success manager to upgrade.” So understanding being able to upsell in a very intelligent way by highlighting that, “Hey, right now you’re on a lower tier and you have all of this advanced functionalities that you can actually have access to for just a small fraction–” I think make that experience really, really easy to upgrade your software tier– I think that’s really important. I think John mentioned just [inaudible] so– I think, for us as a smaller company – we’re about 50 people – and I think one thing we have not done as well is around [inaudible] investing in partnerships, so we actually do work with Recharge. They’re a great partner of ours. We have a lot of similar clients and work with other sort of technology in the ecosystem, so I think investing in your partners is a great way. And then finally, I would say turn your clients into advocates. So we have a lot of brands that ended up referring us more clients because we serve marketers, so oftentimes they all are very well networked among each other and they all want to know what are the top tools you use. And one of our awesome brands is called Poo-Pourri, so it’s this really cool scent that– they have a really funny commercial, you guys should look them up. They’ve referred us like four or five times, so I think investing in your own clients and making sure they’re successful and know that they– turn them into your advocates. I think that’s the best type of advertising.
[13:01] Jeff Wissink, Navint
Certainly empathize with that comment. So last point, then– or the last point of get, grow, and keep is obviously the keep, right. How do we retain these customers, right? And so there’s the easy ones– and I don’t remember, somebody said it earlier this morning, right, there’s the value proposition, there’s the value price thing that customers are continually having to make and evaluate as they are in this continual purchasing and revenue relationship with you, right. So that’s kind of the easy one. You have to be giving them good stuff, you have to be charging a fair price, right. That’s table stakes, right. But what do we do from a– what other strategies might you employ to keep customers– do you know when you have a customer that may be [inaudible] and what kinds of strategies will you put in place to maybe save the sale, rather, if you feel that you have a customer that’s at risk of leaving you?
[13:57] Jon Ferrara, Nimble
Well, I think that you need to make your product like crack. It has to be something that that person has to have. They want to have. They love to use it. And I’m going to ask everybody in this room, how many love your CRM? Okay. So I invented contact management and CRM and the reason why Gold Mine was so successful is because it’s about relationships, not about revenue and reporting. So basically, the reason why there’s 225 million global businesses and less than 1% use any CRM is because you work for the CRM. It doesn’t work for you and you have to go to it to use it. That’s stupid. So the reason they call it Salesforce– you have to force salespeople to use it [laughter]. Nobody in their right mind would use this CRM if they weren’t beat on to do it. And the reality is if you were to ask Marc Benioff or Bob [inaudible] to build dynamic CRM, how they built those companies, it was converting Gold Mine customers, because ultimately I really believed that we all need a personal CRM. We all need a relationship manager, especially in today’s overconnected, over-communicated world where your email contact and calendars aren’t even connected to each other, let alone are they connected to the places you’re really engaged in social, and so the way that we keep customers is we’re the first CRM that works for you by building itself and then works with you everywhere you work, because you need context and insights wherever you are. If I’m going to meet David Wood in half an hour, I want to know when was the last time I spoke to David? Who on my team has spoke to him? And I want to know what’s going on in his life so I could find ways to add value, because that’s what we’re on this planet to do, is we’re on this planet to grow by helping other people grow. And if you can align the promises that you make to the experience that you deliver and have a company that helps other people achieve their passion, plan, and purpose in life, you can’t help but keep customers.
[15:56] Jon Ferrara, Nimble
So what we’ve done is we’ve made it so Nimble automagically synchronizes with over 100 SaaS business apps. Doesn’t matter if you’re using Salesforce or Hubspot or whatever you happen to be using in sales, marketing, customer service, accounting, or social media. We’ll unify your Office, your Gmail, your G-Suite, your iCloud, contacts, Twitter, Facebook, LinkedIn, and the business contacts, and create a universal relationship platform for your whole company and then work back inside those applications so that you can Nimble somebody everywhere you work. You could be in a Forbes article and Nimble Jerry over here and not only will we give you his complete background, but his contact info, and enable you to connect and engage. And I think that’s the best way to keep customers is to work for them and with them everywhere they work so that you’re providing insights and ability to take action throughout their entire day.
[16:52] Jerry Jao, Retention Science
I was saying just spend as much time with your customers as you can. I spent probably 50% of my time traveling to customers and really trying to understand their needs, because chances are you’re only solving a small portion. And a lot of times [inaudible] usage, too, beyond just a product doing what it’s supposed to do. We actually have automatic alerts if people are not in our software, they’re not turning on campaigns, so we have a certain threshold that– we know that if you fall below a certain threshold, then you are potentially at risk. And what I call surprise and delight. So we work with Roger at Rachel Zoe Media and one of the things that we try to do sometimes is we get onsite and meet with them in person or being able to– if it’s holiday time, we come up with maybe strategy– just trying to always go above and beyond to serve your clients. I think sometimes it’s– to keep them, most people are human [inaudible] are not just buying your products, they’re also buying you. So I think being authentic is important, too.
[17:55] Jeff Wissink, Navint
I think we’re out of time [laughter].
[17:58] Jerry Jao, Retention Science
[17:59] Jeff Wissink, Navint
Great answer. Now, let’s take a– I think we have a few minutes for some questions from the audience, if we have any out there. Yeah, right here.
[18:08] Audience Member 1
So, Jon, you mentioned about scaling through partners, right. So you sell Business to consumer and business to business. How about the pricing differentials? When you price for those B2Bs, what does that look like?
[18:22] Audience Member 2
Repeat the question.
[18:25] Jeff Wissink, Navint
The question was what was the…I was listening, Peter [laughter]. The question is what is the difference from a pricing perspective when you’re selling both to a B2C and a B2B kind of a customer?
[18:37] Jon Ferrara, Nimble
Well, if you think about business, ultimately it’s not B2B or B2C, it’s P2P in each stage. People buy from people they like knowing and trust. And so it’s really all relationships either way you go. But we do have different models and different products for different positions in that marketplace. We built a [inaudible] add-in that Microsoft resellers give away with our product through Office 365. If you add it inside Office 365, it’s automagically added into Outlook desktop, Outlook mobile, and works everywhere you work, it gives you insights on people and companies throughout your day for free, and then we upsell you into the paid version of that. And then we also have a contact platform that’s just $15 a month and it gives you contact management for your team, even if you have a CRM, and then we have a $25 version that gives you the full enchilada.
[19:38] Jeff Wissink, Navint
Other questions out there? I see a hand right there.
[19:43] Audience Member 3
[20:10] Jeff Wissink, Navint
That was too long for me to repeat. Why don’t you just answer that one?
[20:14] Jon Ferrara, Nimble
The question is, is there a difference between B2B and B2C retention and caring if the team members are using it, logging what they do, and do you have to continually get them to use it? Or do you just care about the buyer or the administrator.
[20:29] Jerry Jao, Retention Science
Yeah, so for us– thank you, Jon. And so a comparison of product for B2B that’s– my software is Hubspot, Marketo, and we’re essentially through B2C, so I would very much look at– and we actually use Hubspot for our business to market, so I very much look at our own usage, which is much, much less than a B2C company. So B2C companies are running campaigns every day. And so I think for B2C, maybe the most important thing is looking at– having a good sense of what the averages you should be expecting. So is it they’re supposed to log in at least twice a week and then they launch a few campaigns or if you’re sending [inaudible] emails or if your content management system– is it 500 contacts for a premium customer? Is it about right versus 1000 to 2000? For us, a very simple metric– there are two things we track. We track volume and so just usage and growth, and then two is we also do track how many email or just database [inaudible], so the faster you grow, chances are we know that, one, there is an upsell opportunity, two, more volume equals the revenue. That means you’re getting a higher ROI, and then so that typically alerts our client success team that there might be an upsell opportunity. If they’re clearly getting a really strong ROI. One example will be we have a client that literally makes a million dollars with us and they pay us $5,000 a month and then so our team realized, “Oh, okay, we should probably find a way to justify that upsell.” So finding that kind of customer pattern for your B2B products– I think having those clearly defined, so your CS team knows how to react to those and based on those growth, I think would be key.
[22:14] Jon Ferrara, Nimble
I’d like to touch this question too. I think the administrator, or the owner makes the decision to buy it or manages the platform for the people, but if the people aren’t using it, then they won’t keep paying for it, the manager or the owner. So we absolutely track usage by the entire team and we use something called intercom for that. And so we have pick cells on what you do and don’t do and based off your behavior and non-behavior, we message you to drive the behavior that we know will help you to become successful and ultimately for us the measure of success is that you use us throughout your day, so you’re not just going to Nimble to use it, but you’re using Nimble inside of Gmail, G-Suite, Office, Hubspot, Mail Chimp, whatever program you’re in. And so if you’re continually adding contacts, looking contacts up, then we know that it’s providing value.
[23:12] Jeff Wissink, Navint
We’ve got to wrap up. One more question if we want. Yes, right here in front.
[23:18] Audience Member 4
[inaudible] your company [inaudible] sell [inaudible] scale [inaudible]. [inaudible]?
[23:31] Jeff Wissink, Navint
The question there was the non-confidential insights around the Dollar Shave Club and what they did to get the valuation on the exit that they got, one of the most successful exits here in LA.
[23:42] Jerry Jao, Retention Science
I think for a lot of brands we– and we work with a lot of fast-growing start-ups and I think one of the things that we always looked at when they can keep– what they do to keep their customers. At the end of the day, they have products that they need. So if you’re selling razors and now we’re working with another brand called Quora. It’s subscription for tampon. And I think they’re going to be the next Dollar Shave, because at the end of the day it’s about selling necessity and so there’s certain type of subscriptions that if it’s not a necessity and people don’t have a recurring need, like a toilet seat, then you really can’t keep them on a subscription type of business model. For them, I think they’re very, very authentic. I think Michael Dubin, the founder in the early days, he just really made a name for being a just very, very real and funny and a great sense of humor. I think that a lot of brands that we work with, we kind of see that it factor in the early days. Now I don’t know how many of you in the audience have heard of a new company called Rothy’s. They’re these flat shoes for women made out of plastic bottles and they’re blowing up. The first investor [inaudible] invest in Snapchat, Jerry Lieu from Lightspeed, just put in like $10 million in the business and they don’t even need it because they’re already hugely profitable. So we work with brands like that and early on, you kind of see that it factor where just– and to Jeff’s point, if you go on Instagram, literally their customers are defending them for people who say, “Hey, your shoes are too expensive.” And so when you see that and you have– your own customers are defending you, typically that’s a sign of a business or a product or a personality or just something that’s really, really authentic that your customers can identify with. Especially Millennials and Gen Y, Gen X– we all shop very, very differently, and I think customers today to echo back from Jon– people buy from people they like. And then so a lot of it’s about the brand story, it’s about being authentic, and it’s about cutting through the noise, because if you go on Instagram right now, too, I mean, there’s so many sponsored ads and it’s hard. And so unless you’re being real and you stand out, I think you cannot get to that billion-dollar exit.
[25:57] Jeff Wissink, Navint
It’s hard to get through the clutter. Yes. Are we done? Okay. A round of applause, please, for my panel. Thank you. [applause] [music]