Most companies think they have a growth problem, but what they really have is a churn problem.

by Rishi Shah on May 6, 2014

Everyone loves talking about the growth of their company (total #of downloads, users, etc), but what people should be talking about is active engagement.

  • How many times do you download an app and delete it?
  • How many times do you put in your email on a wait list, but then forget about the service?
  • How many free trial (no credit card required) services do you sign up for and then not use?

You may think you need more customers, but what you really need is more customers using your product regularly.

Here are 3 ways to solve this issue:

  1. Setup an automatic autoresponders (make it look like a personalized email) and figure out why people stop using your app. You have to make sure the first experience gets them exactly what they think your app is suppose to do.
  2. Charge more money. This means that you will have to do more sales up front, but this will get good critical feedback from serious customers only. If you charge money up front, customers will have to take you seriously.
  3. Get the customer committed as soon as possible. Here are three levels of commitment:
    • Lowest: Clicks button (Facebook Connect, Downloads app , etc)
    • Medium: Enters email address
    • Highest: Payment information (credit card details)

Until you get some form of commitment you don’t really have a dedicated user.


 

My good friend Vishal just asked:

“I don’t know what an automatic autoresponder is….sounds like an automated message to the customer but what does the responder ask?”.

Great question, here is the answer:

What is an auto-responder?

An automatic autoresponder is an automated email you can use to send an email. There are a ton of software companies that can help you do this (in fact it is a billion dollar market). There are high end solutions like ExactTarget and SilverPop that do this ($1k/mo +) and there are also super low end version like AWeber, MailChimp, Infusionsoft, etc ($30/mo +) that can help you do this as well.

Here is what your first autoresponder could look like

Note “FNAME” is the first name of the recipient, it is dynamically added:

Subject: Hey {FNAME}

Hi {FNAME},

I saw that you just signed up for our trial. I created the app so if you have any questions, just reply back to this email :)

Thanks,
Rishi

PS I’m really looking forward to working you!

I like to send this email on a 45 minute time delay from the time they signed up. I also have the email come directly to my inbox if they hit reply. This simple email allows me to learn what the biggest problem with my app or what is confusing them. I can then go back and try to make my app’s first experience super clear.

I also like to send another automatic email after 3 days called “Top 3 FAQ” – this helps address any questions or misconceptions they might have had about the product.

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{ 11 comments }

Vishal May 6, 2014 at 12:45 PM

Thanks for clarifying what an autoresponder is. Love the article. At my current company we have the same issue. Our total number of subscribers is significantly higher than our active users.

Rishi Shah May 6, 2014 at 1:02 PM

Thanks Vishal. Autoresponders are a great way to re-engaged customers. Also, try re-targeting.

CrazyNines May 6, 2014 at 5:41 PM

Hey Rishi – great post. If you use software tools like MailChimp / AWeber, doesn’t it look like an automated email because there is a “Unsubscribe” link at the bottom?

Rishi Shah May 6, 2014 at 5:44 PM

Hey CrazyNines – thanks for the comment!

Yes, there is an unsubscribe link at the bottom. So, yes if your end customer is sophisticated they will definitely know you automated your email. In this case, I recommend hiring someone on ODesk or GetAFreelancer to do this for you. This can get expensive so I recommend this to only businesses that have a customer lifetime value of at least $500.

Ish May 6, 2014 at 6:04 PM

Rishi such great advice. Going to look into the auto-responder right now! Might be interesting to customize this for mobile somehow with a auto-responder via push notification if the user drops off.

Rishi Shah May 6, 2014 at 6:06 PM

Hey Ish! Thanks so much.

Check out https://www.intercom.io/ – I haven’t used it personally but I have heard a lot of great things.

Ish May 6, 2014 at 6:08 PM

Looks interesting will definitely check it out.

Steven Cope May 7, 2014 at 9:30 AM

Great post. What if I’m not collecting their first name. What should I use as the intro line?

Rishi Shah May 7, 2014 at 9:33 AM

Hey Steve,

If you can, try to get the first name. Open rates dramatically go up when you can use their first name in the subject line. Check out the research here:
http://www.retentionscience.com/new-research-reveals-which-email-subject-lines-perform-best-for-marketers/

If you don’t get there first name, I like to use “Hey there”.

Tom P May 8, 2014 at 1:29 PM

Unsustainable Growth. ….Fascinating!

Does anyone recall the rapid growth realized by Krispy Creme. Multiple high end buildings, made of brick shot up almost overnight. Where are they now ?

Not only is a business impacted by over saturation and the fallout of the initial novelty waning, but also as trends and current fads are strongly influenced [if not controlled] by the exposure from the mainstream media. Eating many donuts lately?

Of course not “They are not good for you” Any business that grows rapidly, eventually gains the attention of local interest. In some cases if the business is so large and it is deemed evil, it draws attention from the National Media. One needs to be on the appropriate side to grow and to stay in business today. Why are Alliances, Networking and Lobbyists so prevalent and important? Think everyone knows the answer. IT WORKS The use of these tactics and tools along with others, have become imperative to the survival of business today. “Keep your friends close but…..Well you know the rest.

Rishi Shah May 8, 2014 at 1:31 PM

Hey Tom,

Thanks for the comment.

Yeah, I completely forgot about Kispey Creme – but I do remember them opening up near my house and being so excited for it. I remember going a few times and then stopped because they were also available at my local gas station.

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