How ClickFunnels Used
Data to Understand User Churn
- Understanding the origins of their user churn
- Finding correlation between retained users and the amount of contacts acquired
- An experiment designed to test whether collecting contacts will result in an improved user retention rate - and higher MMR
- Software as a Service (SaaS)
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.
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.
Chief Technical Officer
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."
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.