How ClickFunnels Used
Data to Understand User Churn

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HIGHLIGHTS

Challenge

  • Understanding the origins of their user churn

Solution

  • Finding correlation between retained users and the amount of contacts acquired

Result

  • An experiment designed to test whether collecting contacts will result in an improved user retention rate - and higher MMR

Industry

  • Software as a Service (SaaS)

THE CLIENT

ClickFunnels


ClickFunnels is a marketing automation company that gives entrepreneurs everything they need to sell their products and services online.

For as little as $97 a month, aspiring business owners have access to an all-in-one sales funnel builder, contact management system, analytics platform, and more.

The goal of ClickFunnels is to help small businesses and entrepreneurs start making money online.

 

THE CHALLENGE

Understanding the origins of their user churn
 

For ClickFunnels (and any SaaS company), understanding churn is their #1 problem.

CTO Ryan Montgomery knew that if Clickfunnels didn't acquire more customers, yet fixed their churn by 1%, it could result in nearly $10M in additional monthly recurring revenue. 

But after testing over 101 different assumptions with his executive team that included user experience improvements and pricing experiments, he wanted  further understanding of the problem before he could address it...

And combined with some database problems he had, he knew he had to call up his "go-to" guy for machine learning.

 

I needed somebody who could actually apply some good old fashioned machine learning to actually get to the nut of the problem for us without looking for obvious things.

 
 
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Ryan Montgomery
Chief Technical Officer
ClickFunnels

 
 

THE SOLUTION

Finding correlation between retained users and the amount of contacts acquired
 

Because I had worked with ClickFunnels in the past, it took almost no time to get up to speed with their database and extract the right information. 

And after 3 weeks of analysis, ClickFunnels found out that their churn problem had nothing to do with the pricing. 

In fact, by using Zig Ziglar's sales objection framework, we discovered that the majority of their churn came from users who were in "no hurry" to continue using ClickFunnels. 

Later on, we found out there was a significant correlation between users who stuck around to use ClickFunnels and the amount of contacts they had acquired.

 

It was interesting to find, preliminarily, a number [of contacts] that we might want to pay attention to.

We don't know for sure, we're still confirming some things, but at least it gave us an idea of like, "Oh yeah, maybe we could encourage them to get more contacts faster or something."

 

THE RESULT

An experiment designed to test whether collecting contacts will result in an improved user retention rate - and higher MMR
 

The ClickFunnels executive team now has a list of ideas they can move forward with, thanks to the preliminary data analysis of their churn.

They are currently testing whether prompting users to collect contacts vs. setting up a sales funnel will result in a longer customer lifetime value. 

Ryan is hopeful that he can start to try solutions more intelligently, as opposed to random guessing about ways to reduce their churn.

I continue to work with the ClickFunnels team to investigate their churn problem, improve their app's onboarding experience, and help their own users investigate their own business's churn rate.

You always want to find people who bring stability into your organization, not instability.

[Matt's] definitely on the stability spectrum, you know? He's on that end of the spectrum...if I have a problem, I can bring it to him.

 
 

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user churn?

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