Jessy Hanley of Intuit on How GREAT Products Drive Engagement and Retention

Jessy Hanley of Intuit on How GREAT Products Drive Engagement and Retention

You might believe your product is great, and hopefully your customers agree. But in order to truly engage those customers and walk alongside them on the happy path to long-term retention, your marketing lifecycle needs to be GREAT, as in: Greet, Ramp, Evolve, Amplify, and Treasure.

That’s according to retention marketing expert Jessy Hanley, VP of Marketing at Intuit. In this episode of CleverTap Engage — our podcast and video interview series spotlighting marketing leaders who are achieving meaningful and memorable customer engagement— Hanley speaks with our co-hosts, Peggy Anne Salz and John Koetsier, about creating a product marketing life cycle of five key stages to help ensure success, from top-of-funnel to long-term retention.

Hanley has held leading marketing and retention roles — encompassing product marketing, CRM, email, and more — at on-demand services Uber and Wag, among other renowned tech brands. She’s now leading similar efforts at the multi-billion-dollar global tech giant Intuit. In our discussion, she shares her wisdom on customer retention, along with insights on audience segmentation and much more.

Focusing Your Organization on the Customer Journey

Hanley encourages companies to think holistically about the customer journey. “For so long it was all about top-of-funnel,” she notes. “Your money goes so much further if you’re looking at the entire journey. Make sure [your] organization is set up to support that journey, and that everybody feels responsible and accountable for retention.”

The real trick, she says, is to think about retention as a relationship. That involves asking your internal teams careful questions about how each cohort of customers moves through the lifecycle: “What do you want to tell people? How do you want to work with them? How do you make sure they are deepening their relationship with you over time?”

She further explains, “I like to think about it as bumpers on a bowling alley lane. You want to help people get to where they want to go, but also give them freedom to move around in a way that makes sense for them. There isn’t one journey for everyone; there’s an individualized journey.”

Ensuring GREAT Customer Relationships

Hanley has created a model called G-R-E-A-T, featuring a five-phase product marketing lifecycle that can help brands ensure deep customer engagement and long-term retention. The phases, which can involve varying timetables depending on the product category, are:

  • Greet. “Early in the life cycle, make sure you’re welcoming [customers] and you’re explaining the main value props. You’re not telling them what to buy, you’re explaining why they should be here at all.”
  • Ramp. “Start helping them overcome the barriers to entry, to sign up for a trial, get them to make their first purchase—things like that.”
  • Evolve. “Expand their understanding of the product. There’s always this really long tail of features that you have, so make sure [customers are] getting the main things.”
  • Amplify. “Start deepening their relationship, increasing their depth of use.”
  • Treasure. “Make sure they feel valued, that they’re continuing to get what they need out of the product, and preventing churn.”

Creating a Smart Segmentation Strategy

Reinforcing her point about the individualization of the customer journey, Hanley emphasizes the importance of audience segmentation. “Try to stick to around six main segments,” she advises. “Beyond that, there’s too many different groups, and you’re not really sure how you’re talking to them differently.”

On that note, she dispels the myth that if you’ve created, say, five customer segments, you need to produce five different versions of your marketing communications: “Do these segments actually behave differently? Sometimes your high-value customer actually behaves very similarly to another segment.”

Hanley says that marketers should socialize a deep understanding of these segments throughout their organization, from top to bottom. “Then, when you’re rolling out new things, or running new tests,” she continues, “first you do one-size-fits-all, with enough people in each segment so that you can see how each segment behaves. Then look at the outliers. Is there one segment that is not responding to this communication? Create a strategy to address that particular segment.”

For more of Jessy Hanley’s insights—including “heart” metrics vs. “head” metrics, paving the happy path for customers, and the dangers of focusing on averages—listen to the entire episode. (Full transcript is below.)


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Full Transcript

John Koetsier: Is your product GREAT? That’s something most marketers may not be thinking of all the time when they’re building campaigns – they’re busy after all – but it is critical to success. Welcome to CleverTap Engage. My name is John Koetsier.

Peggy Anne Salz: And my name is Peggy Anne Salz. Today we’re talking about GREAT products. Not just better than good. We’re talking GREAT. As in G-R-E-A-T. And that’s going to be something marketers are going to have to make.

John Koetsier: I guess they will. As you know, if you’ve been following our CleverTap Engage podcasts, we’ve been slowly bringing forward some of the very best episodes of our previous Retention Masterclass podcast.

This is yet another one like that in which we chatted with Jessica Hanley, who is now the VP of marketing at Intuit. She says something very specific, and means something very specific, with GREAT. What does she mean, Peggy?

Peggy Anne Salz: Well, GREAT is how she describes life cycle marketing, product life cycle. G: Greet. R: Ramp. E: Evolve. A: Amplify. T: Treasure. It’s not just another abbreviation; it’s about going full funnel and full throttle with your marketing budget because, as she puts it – and correctly so – your money goes much further when you’re looking at the entire journey.

Greet: Obviously, welcome your users, your customers. You’re basically explaining the main value props in your product.

Ramp: That’s when you get them to do something. You’re ramping up, overcoming those barriers to entry, signup, purchase, whatever it might be, that event you want to reach. That’s what you’re going for.

Amplify: You’re halfway there. You have a relationship, now you want to deepen it.

And so on – keep listening for all the details. Of course, it’s going to belong in that catalog, John, of RFM and RR. This is the one.

John Koetsier: It is International Pirate Day somewhere, so there’s your R. We also chat in this episode about the danger of averages. We talk about heart metrics. We talk about head metrics and the happy path for customers, which should make marketers and product managers happy as well. It makes me happy, at least Peggy.

Without further ado, here’s Jessy Hanley.

Jessy Hanley: Thank you so much. I really, really appreciate it. I’ve been doing retention for way too long, longer than I want to admit. How ’bout that? I don’t want to date myself, but yeah.

Peggy Anne Salz: That’s one of the reasons you’re here. You were at Wag, Uber, some great positions that you held there in CRM. Maybe you want to walk me through what you’ve been responsible for. I said you’re shaping retention. It’s an organization, not just a marketing thing. Give me an idea of what you’ve been responsible for.

Jessy Hanley: I’d love to say that I chose my career, but it chose me. I’ve held roles that required me to run product marketing, CRM, email, and marketing. I’ve run product. I’ve run martech.

It’s thinking about the entire customer journey and making sure that the organization is set up to support that journey, and that everybody feels responsible and accountable for retention, because no one team can solve the problem. Everything from products, to customer support, to community, to marketing. Everybody’s very much involved if you want to do it well.

One thing I’ve done a lot in my career is trying to bring people together and have different teams and different people from different parts of the organization consider retention as their responsibility.

John Koetsier: Super cool. We’ve talked a little bit on this podcast, even though it’s very new, about retention being the new growth. As marketers shift focus, entire organizations shift focus as well, and budget, to user and customer loyalty. What’s your thinking about retention? How should marketers and the entire organization, as you were talking about, approach it?

Jessy Hanley: It’s funny that you say that. It warms my heart to see how much retention has become the new thing. For so long it was all about top of funnel, top of funnel, top of funnel. It’s really great to see that now people are realizing your money goes so much further if you’re looking at the entire journey, and that it’s not just when someone signs up and you forget about it.

You have to think about, who are the people you are bringing in? How are you maintaining them? How is that cohort living through that life cycle and ensuring that you’re bringing people in that not just take one transaction or do one action, but actually continue to build a relationship with your business or your product?

For me in particular, I think the real trick is to think about retention as a relationship. You don’t ask someone to marry you on the first date, so you have to think about, what do you want to tell people? How do you want to work with them? How do you make sure that they are deepening their relationship with you over time? That requires some real tough conversations within your organization about what really matters.

What is a normal onion unveil of activities that you want someone to do, and how do you help them move through that life cycle in a real way? I like to think about it as bumpers on a bowling alley lane. You want to help people get to where they want to go, but also give them freedom to move around in a way that makes sense for them, because ultimately there isn’t one journey, or at least not one journey for everyone. There’s an individualized journey. How do you crawl, walk, run your way to a system where what you’re doing is having a one-on-one relationship with your customer?

That really winds up being … It depends on where you are as a business. If you’re brand new, then yeah, you start with a happy path of everybody working together, your perfect single path. Then you continue to iterate to get to a point where you are having a one-on-one relationship.

John Koetsier: Super interesting. I know Peggy’s going to get into some of the weeds of how you do that, and how you segment, how you individualize and personalize, and all those things. Maybe to kick off as well, everybody wants to have 100% customer retention. It’s not realistic. It’s not going to happen. In mobile, we’d kill for 50% user retention. Based on your experience at Uber, at Wag, at your new, big job with a cool company that we can’t mention right now, what’s a good north star for retention levels in on-demand services?

Jessy Hanley: The answer to that question depends on where you are in the life cycle of your business. If you’ve been around for a long time and you’ve already gotten your golden cohort, your early adopters, those people will have a higher retention than when you’ve really started to address your TAM and you’re having a hard time getting new customers. They will have a higher churn rate simply because they’re not as eager to try your product.

It’s very much individualized to the organization, and you should be constantly striving to improve your retention in every possible way. If you’ve been around for a really long time, it’s about maintaining that number and making sure that you’re not forgetting about your tenured customers and only worrying about your new customers, because it is so much easier to keep your existing customers than it is to keep finding new customers.

Making that a focus and something that you look at just as often as your first transaction or your CAC, making those metrics something just as important as your organization, is the main thing I recommend that you do.

Peggy Anne Salz: Some great advice around those metrics by the way, Jessy, because everybody wants to know about that. And John’s right, I’m going to go into the weeds a little bit because I get into this with marketers. I want to understand how you approach it. We absolutely agree, retention is the new growth. You said it yourself, and you’re excited to be in this space. You’ve been here for such a long time. I mean that with respect.

So let’s go back a step and talk about segmentation, because you’re saying we have individual journeys. We have, and we’ll get to it, the happy path for retention. Segmentation: Big question you know. How much is too much? What’s too little? What were you doing, for example, at your other companies or even at Uber … is it 5, 10, 15, 20? Give me some idea of where we land in segmentation.
Jessy Hanley: I tend to believe in trying to stick to around six main segments. Beyond that, I think you wind up getting a little bit too … There’s too many different groups and you’re not really sure how you’re talking to them differently.

The other thing I think is important about segmentation is it can be incredibly appealing to think that if you have six segments, you have to do six versions of everything. That is not how I would recommend you approach segmentation.

It’s critical to understand who your customers are. What their needs are, what they look like. Segmentation is a wonderful activity to do that. But you also need to see, do these segments actually behave differently? Because sometimes your segment that is your tenured customer, or your high-value customer, actually behaves very similar to another segment.

What I tend to do is … First you create your segments. You have them, you understand them, you really socialize them throughout the organization. It’s not just marketing, it’s product. Everybody understands who these segments are. Then when you’re rolling out new things, or running new tests, and running new hypotheses, first you do one-size-fits-all. A big-enough segment or a big-enough group cohort so that you have enough people in each segment, so that you can look and see how each of those, say, six segments behave, and then look at the outliers. Is there one particular segment that is not responding to this communication, this strategy?

Then you create a strategy to address that particular segment. Oftentimes people say, I have six, so I need to do six different approaches to the same campaign or the same message. That’s not always necessary. You can wind up getting to a place where you are 6x-ing your work and you’re not really getting any value for that.

So, start with: Solve problems you have; don’t assume you have problems. It’s pretty easy, and usually you’ll have maybe one or two that behave differently and that’s great. Then you’ve come up with a different approach for that group. Make sense?

Peggy Anne Salz: Makes absolute sense. But you know, the devil’s going to be in the details here because you’re going to get to that cohort, as you said, like going down and figuring out, okay, this is the one. But then everything changes, right? Everything’s in flux. How do you handle that as well? Because you’re saying, yes, segmentation; this is the way to do it. But they’re going to be changing. It’s dynamic.

Jessy Hanley: Right. It’s a challenge. The thing I think is really critical is making sure that you never set and forget anything. It’s unfortunate, but in the world of retention, your job is never done.

Similar to when you’re doing acquisition, your creative can become stale and no longer work even when it worked really well before. You need to do the same thing. When you’re setting up your reports, when you’re setting up your monitoring, you should always have filters that allow you to see how each individual segment actually is performing for that.

You’ve got your overall results, then you can filter and see, okay, how is segment A performing? How is segment B performing? Then when you’re setting up things like life cycle promotions or new features, you need to constantly keep going back and making sure that those numbers are staying, because sometimes people change or segments move.

The other thing that’s really critical is when you’re creating your segmentation, it’s very important to make it easy and quick within the life cycle to assign new customers into those segments. If you require a typing tool, for example, where you need to ask people 12 questions to understand which segment they are in, you are going to be limited in what it is that you can do for your new customers. Because not everyone will want to answer those questions. And you need to think about when you’re asking those questions. It’s at such an important time in the life cycle.

In the beginning, you have your customers that are the most willing to learn. They don’t think they understand your product. They’re very open to being educated and you want to make sure what you’re telling them then is the most important thing when you’re taking their attention. So, if you’re taking their attention to fill out a questionnaire, you’re not explaining to them the value props of your product. I’m a big fan of using machine learning to assign people into your segments, if at all possible. If not, try to keep your questions very, very minimal, and then do what I call … well, what everybody calls “progressive profiling.” Don’t ask seven questions at once. Ask one question every session so that you’re getting better, but you’re not putting a big blocker into getting people to start using your product.

John Koetsier: That’s so critical because every time you message a customer, message a user, that has to be a high-value exchange for that user. That has to be high-value time spent for your customer. You’re spending some currency every time you’re sending that message, and it better be worth it because wow, if it’s not, you have limited opportunities to do that.

Jessy Hanley: It’s a great way to think about it. When you are dealing with retention, it is the customer’s attention and time that is your budget, and how do you want to spend that? How do you make sure that you are giving them the most important thing for them to move to the next stage of their life cycle? That can easily get lost, like you have a new feature that everyone in the organization is super excited about. But if someone hasn’t actually taken their first trip, do you need to tell them about this new safety feature? In the beginning you have to really think about where someone is and constantly be putting yourself in the shoes of the customer.

Does this make sense to be explaining now? That’s really important. Even when you’re launching new features, thinking about when is the appropriate time to be unveiling this in the life cycle and then adding it to the life cycle burst. Then look at the customers who have already passed that point in the life cycle and do a, what I call, backfill. What’s your go-to-market for those who are already further along in that journey? Then what’s going to happen is somebody joins and … say your new feature makes sense to unveil after they’ve taken 10 trips or 5 walks. They’ll get that information; it just won’t be in the beginning.

That’s really an important way to think about it, that it is always a journey. I know that’s what everybody says, but thinking about it as I’m speaking, it really is important.

John Koetsier: It really is, absolutely. I love what you were saying earlier about using machine learning to build your segments and do progressive profiling because you know what? It’s changing all the time.

Peggy was talking about that as well, where people are … what they need, what they want, is always changing. In our recent show at Retention Masterclass, we dedicated the show to discuss what CleverTap … what Sunil Thomas calls RFM framework. Recency, Frequency, Monetization. They automatically segment users based on those things. How often are you coming? How recently was your last visit? What kind of monetization is going on? Any thoughts on that model? Does that correlate to anything that you did at Uber or Wag or any other places?

Jessy Hanley: I believe in the model; it’s a really great place to start. But I think it’s the next level down that really helps you learn very interesting things about your customer. I like to start with what I call – and don’t laugh – the GREAT life cycle approach. There’s probably five or six gates in any product or life cycle that people need to move through, and understanding what those gates are makes sense. For example, GREAT stands for Greet, Ramp, Evolve, Amplify, and Treasure.

When you’re greeting someone – this is early in the life cycle – you want to make sure that you’re welcoming them and that you’re basically explaining the main value props. You’re not telling them what to buy; you’re explaining why they should be here at all.

Then you ramp. That’s when you start helping them overcome the barriers to entry, to sign up for a trial, or get them to make their first purchase or to upload their documents to become a driver, things like that.

Then you evolve and you expand their understanding of the product. I think one of the key things in retention is education, because we, as people who work in the company, understand all of the things that are there, but your customers don’t. There’s always this really long tail of features that you have, so you want to make sure they’re getting the main things, the most important things to make sure that they are successful.

Then you amplify. That’s when you start deepening their relationship, increasing their depth of use.

And then treasure, which is, just make sure they feel valued, that they’re continuing to get what they need out of the product, and preventing churn. Those steps are very different for different organizations.

What I like to do is take each of those milestones and understand, what is the average amount of time it takes for something like that? What’s the median? Never just look at average because sometimes you’ve got a huge bell curve, and it might not make sense.

Look at average, look at median, and then try to understand it typically takes about this amount of time for somebody to do this. And that’s how you know when you need to push them back. Use those bumpers on the bowling alley lane into what is the next thing, and you focus your energy on making sure they understand that phase. Some people will fly through that process, some people will go slower, but it lets you know what it is that your goals are for that process.

Recency, frequency, and monetization fall into that, but your frequency in the beginning will be very different than your frequency when you’re a treasured customer, because you … or maybe not. It really depends on the business.

Some people set it up, they get the value, and they just set it and forget it and they’re happy. Other people, for example, like with Uber, the more you ride, the better it is. So you really need to look at those values in each of those different segments and that helps you understand, like I said in the past, your happy path, what is the basic amount of time, the ideal type of process that gets you through your life cycle.

Then you can start iterating, because when you’re talking to someone who hasn’t actually taken their first trip, you’re not going to talk to them the same way as someone who’s taken a hundred trips. Thinking about churn is something that doesn’t happen at the end of the life cycle; it’s happening through every single stage. Addressing it differently, I think, is key for success.

Peggy Anne Salz: First I have to say I love the GREAT; I’ve made a note of that one. That’s a good one. Is that yours, Jessy?

Jessy Hanley: It’s mine. It took a few years to create something that worked for me.

John Koetsier: It’s awesome.

Peggy Anne Salz: It’s a good model. We need frameworks. We heard about RFM; it is a good framework, we heard about that. You mentioned happy, and that’s one of the reasons I asked you to be on the show because when we were having that chat over coffee, that’s when you got me. It was like thinking about paths and building paths and you were talking about the happy path, and I thought, that makes a lot of sense. You did discuss how you architect that. You see this very much as a journey, but I would like to still understand a little bit more about architecting, shaping that path.
Jessy Hanley: Happy, it talks about the real value and the types of metrics that you need to think about. I like to say that for every one of those different verticals, the GBR, the EE, whatever, you’ve got heart metrics and you have head metrics. Satisfaction to me is a heart metric. You want to make sure that people are loving you, and finding value in you as a business, as well as signing up, taking a trip, and so on. You have to have both.

Happy path is the … This person is just moving through your life cycle in what just takes time. You’re not going to have someone take a hundred trips if they haven’t finished signing up. So, what is the happy path? The most basic, simple way that, if you could have every single customer – which won’t happen – if you could have every single customer move through a life cycle, what would that happy path look like?

How do you approach during that? One of the things is, you look and see, let’s look at those who are successful that moved from point A, from greet to ramp. How long does that typically take? What do they typically do? What’s their basic process to get to the next path?

That lets you know, these are the types of things that we want to try to help people do. Then you spend all of your time marketing and you’re building your product around getting them to do that next best action. This is what I call the crawl approach, because it’s very much one-size-fits-all. Then you fill it out and you look at your life cycle and you say, here’s my happy path. This is what we want everybody to do.

Then we have underneath it what I call unhappy path. It’s taking them a little too long. If it typically takes the average driver two weeks to get all of their documents up, and this person is on week three, now it’s time to start saying, we need to do something; there’s obviously a problem here that they’re not able to upload their documents, so you start educating them on those activities, for example.

If they never actually do that, you change your strategy and you “altboard” them. You’d say, “You don’t want to be a driver? How about delivering for Uber Eats and things like that?” That’s the example of where churn falls at the bottom. Now this person hasn’t actually ever taken a trip, so you’re “altboarding” them because you want to keep them in your ecosystem.

So, happy path is the amount of time it takes. Unhappy path is when you start nudging people up. That’s also back to happy path. It’s a great time to start considering incentives and sales and things like that, to try to help encourage them to take that action.

I do not believe in making … I don’t think that sales are a strategy unto themselves. I believe that they are a tactic to change behavior. You incentivize people to try a different behavior or to do the thing that you would like them to do, as opposed to just offering it without really thinking about why you’re doing it.

If someone hasn’t taken their first trip, for example, you offer them an incentive that says if you take 10 trips, we’ll give you X dollars and so on. And that helps move them back up into happy path. Make sense?

Peggy Anne Salz: Makes sense, and actually, Jessy, you’re making me happy. Absolutely. Because this is about emotion and we are going to talk about it here on the show – a little bit of unveiling – because John has some research that he’s going to tell us about. Because this is all about what makes a company, you know, a company you want to engage with.

Happiness is an emotion. John, I’ll give it to you because you have some amazing … I want to hear it myself … I’ve read it, but I want to hear you explain it in context. I want to hear this because I also want to hear Jessy weigh in on a few of these as well. Why don’t you take us through a couple of the top takeaways that you’re seeing so far?

John Koetsier: Just so you have some context, we’re doing some original research. We surveyed 1,100 consumers, and what we’re trying to get after is this concept of magnetism. This concept of magnetism is that you are a brand that people want to come near. You are a brand that people want to be associated with, you’re a brand that people are happy to hear from, you’re a brand that draws people in.

It’s not just about acquisition, and I need to go out and grab everybody. I’ve actually got people who are coming into me and that want to stay connected with me. There are not that many companies like that. There are not that many brands like that, but each of us probably has two, three, four, five, maybe ten brands that we’re happy to be associated with.

We looked at that research and we called them magnetic brands, as I said. We saw that magnetic brands are four-and-a-half times more likely to make people feel happy. They get a message from you. Your customers hear about you in the news or something like that. They’re four-and-a-half times more likely to just feel happy when they hear your name.

Another thing that we found: 94% of magnetic brands get word-of-mouth marketing. Where people actually talk about the brand, they communicate about the brand, other things like that.
We found that a third of consumers will pay 50 to 100% more for equivalent products from a brand that is their favorite, a magnetic brand that they love. Same product, they’ll pay more for it because it’s from, let’s say, Apple or some other company like that.

And we found … and this is just the beginning; we’re actually going to release this research probably in the next month or something like that. We found that magnetic brands are four times more likely to have ultra-fans, people who will say, “Hey, whatever they’re building, whatever they’re producing, whatever they’re selling, I’m likely to buy it.” Any thoughts when you hear some of that stuff?

Jessy Hanley: It completely resonates with me, and I think there’s so much that you can do to become a brand like that, and it is incredibly difficult to dig your way out of it if you are not considered a brand like that.

When I hear “making people happy,” it may be making people feel valued. I think about how to approach everything that you do. To me, it’s about making everyone that you’re communicating with feel like you are on their side of the table. It’s not us and them. It’s we. If you take that approach, I’m here to help you. I’m here to help you get the most out of this product. I’m here to help you get the most out of your experience. That’s how you really make that come to life.

It’s that intangible feeling that you give people. Like I said earlier, heart and head. Whenever I look at a marketing campaign, the first thing I do is, okay, does this achieve the business goals? Is it clear what we want to do? Does it send us where we want it to go? Then you switch and you say, how does it make me feel? What are my brand values? Do I feel optimistic? Did we miss an opportunity to make people feel safe? If that’s something that’s important to us. The trick about emotion is that you’ll be tired of your brand attributes before your customers are really feeling it. It’s consistency over and over and over and over again.

I really believe that retention and a lot of the work that my teams have done in the past is the place that that stuff comes to life. You always get the intro and the sales pitch, but how do you make people continue to feel valued by the business and see the value that they are getting from the product?

Another thing that I really like to do is give people back their data in context. In the past you’ve seen there’s so much worry about data and how it’s being used really poorly. A little bit that’s on us, because we took it, we used it, but we didn’t really give it back in a way that has any value to the customer. It was very much about us as companies as opposed to you as an individual consumer.

One of the things the most successful retention campaigns I’ve ever run have always had that concept where we say, you took this number of trips this week. A recap is a great example, or this month that’s X percent more than usual and Y percent more than other customers.

It’s a little bit like a quantified life. It gives you the data and it gives it back to you in context and it helps you learn a little bit about you as an individual, and that is giving value. It’s not a handout. It’s not, “Buy this, try this, do this.” It’s giving something back, and using the information that you have to help put the whole experience into a little bit more of a personalized feeling.

With all of the different great martech that’s out there right now, you can actually do that. You can customize, you can personalize. You have that information; give it back to them. Make it be your content. Teach people about themselves. I think that’s such a wonderful way to build that loyalty and to help build a relationship in a way that I don’t think enough companies are doing.

John Koetsier: I absolutely love that. It reminds me of what Google does with Nest. We’ve got a Nest thermostat. Every month I get an email, and every other month I actually look at the email. It’s how many leaves I got. If I used less energy than my neighbors in the area with the same climate, then I get more leaves because I was more green. Those sorts of things.

Or you remember Foursquare … Foursquare has Swarm; it’s the check-in app. I use check-in. I check in wherever I go. Because I’m a very future-focused person, I don’t remember the past. It’s kind of a neat way to see where I’ve been. Every year Swarm has this … Here’s where you were, here’s where you went, here’s where you checked in. Lots of data about that. And it’s really very cool.

Jessy Hanley: I think there’s an opportunity to do that in almost every business if you really think about it, and it helps you show your customer not just what they did, but how they compare to others around them. Then you can give them tips within your product to help them do more of that: get better, be more green, whatever is your goal, that information tells you it.

It helps you feel accomplished if you’ve done well, or helps you learn more as you go. It’s similar to all the stuff that I learned from gaming. It’s all about, everyone has a different strategy … some people are collectors, and these are really wonderful tactics that you can leverage in many businesses if you just kind of shift your camera angle a little bit and not always hand out, “Do this, try this.”

Peggy Anne Salz: I love that idea, Jessy. That’s another one from our conversation, quantified self as a way to build loyalty, as a way to maybe feed into magnetic … and we’re all hearing about the magnetic, the whole idea that you need to be contextual, timely, omni-channel.

We’ll get to more of that. I want to just switch it back for a moment because that is the focus, but there’s also always an impact on the bottom line. I’m wondering, give me an idea of the cost to acquire a user that’s going to have this value. You’ve probably done this in campaigns as well.

Jessy Hanley: Oh yeah. Again, very much comes back to where you are in your business life cycle. The longer you have existed and the more customers you’ve already brought through your funnel, the more expensive they become, because you’ve gotten the people that are already showing interest. So now you have a little bit less … as interest level goes down, expense goes up. It’s just the truth of it.

There is no one answer for how much it costs, but I do really believe in thinking about your performance budget, and leveraging it through win-back as well. Because I’ve seen that you can actually win back customers significantly less expensively than getting new customers. Then what you have to make sure you’re doing is, you’re thinking about, I’ve won them back, let’s not drop them back into the exact same experience that dropped them in the first place, because you’d be surprised at how often that is. They’re going to churn faster then because they’ve already been through that cycle.

Making sure that you have a re-onboarding thinking plan. How are you going to give them something different? How are you going to address the reasons why they churned in the first place? Make sure you’re focusing on that when you bring them back. I have in many ways used paid performance budget to be a reacquisition strategy as opposed to an acquisition strategy, and it is less expensive than getting someone new every time.

John Koetsier: Can you quantify that at all?

Peggy Anne Salz: Put a number on that.

Jessy Hanley: I’ve seen it be about, it costs about 25% less to bring back someone when you’re really thoughtful about how you bring them back. Throw out the theme ads that you had, target them very specifically, perhaps using incentive. Try first with your own channels and see for email, SMS, push, things like that. Check and see which campaigns have a there there, that show value, and then go and start spending money against it.

It’s also one of the nice things about retention that you have some information and you actually have other ways to get them than paid media. Start understanding, which of these different ideas for … perhaps if someone churned because they had a bad experience. That happens all the time. Test some ideas through your own channels. You’re only going to get so many people to see that because if they’re not engaged, you’re going to have a lower open rate or a lower engagement rate. But it will tell you which messages have a there there, and then you can take that, lift it up, and move it into a paid option.

Also then you’re not buying people that you could have won back through your own channels, which is also nice. So, first you try your own, you remove those people from your list and then you re-engage them – those that didn’t actually see the message. It also helps you optimize your spend.

John Koetsier: One more metric I’m going to ask you for. Let’s say that you live in some magical industry and it’s really cheap; it costs you a dollar to acquire a new customer. It was 75 cents to actually re-engage that lapsed customer. How much to keep the customer you already have?

Jessy Hanley: It depends. I believe in doing … I believe in a discount sensitivity model in every possible way. What I like to do is look and see which of your customers have already made purchases, and then look at the purchases they have made and how discounted they were.
Some people … I happen to be one of these people; don’t judge me. A discount will actually get me to buy a little bit more, but once I’ve decided I want to buy something, I’m pretty much going to buy it. I’m a low discount sensitivity.

Then you’re going to have other customers where 80 to 90% of the transactions they’ve made have happened because they got a discount. They have a high discount sensitivity. What I like to do is take my budget and look at all of the different customers and I assign the discounts depending upon how sensitive they are to being discounted in the first place.

So it is a different answer depending upon what type of customer you are. It costs more to maintain me because perhaps I submit more questions to support that has … There’s so many different factors to think about and how much it costs to retain a customer. You’re going to have those customers that perhaps are not very technically savvy and so they’re going to have lots of questions on how to use it. Those customers cost more to support, but might require fewer discounts. There are those that are very independent and will do everything themselves, but won’t buy something unless it’s discounted because maybe they already think that the product is too expensive, things like that.

Ultimately – I know that I keep saying this – the answer is, there isn’t one answer. It’s part of the challenge. You have to always look at, are you getting diminishing returns from your segmentation? You have to start big and then keep narrowing your way down to get to a place that it’s a one-on-one relationship. And a one-on-one relationship usually requires next best action models and predictive segmentation, and what I like to call micro segmentation where – tools like Optimove do this – they’ll show you your campaign, and they’ll show you which segments actually are bringing all of the value of that campaign and those that are not.

Then you can create a campaign off those. It’s not like you have six segments. It’s like they’re actually creating a, “this group of people, regardless of what segment they are in, is not responding well to this particular message. You need to find another way to do that.” It’s a segment around behavior, as in-the-moment behavior.

But you don’t need to start there. You can do quite a lot just by doing your basic happy path. Then you can do a happy path per segment. Then you can do completely predictive segmentation.

Peggy Anne Salz: On that note, I’d like to know exactly that. You talk about this, you’ve been shaping these experiences for so long, Jessy, you talk about your happy path. We’ve been talking about magnetic, contextual, timely, omni-channel. You’re shaping these experiences.
Give me an example of, say, if you could look back and say, these different companies I’ve been at, this is what I’m proudest of doing, or this has been a magnetic or near-magnetic experience since we’re talking about it here, that could give us a good example of how that works or the great results that you get as a result.

Jessy Hanley: One of the things I’m most excited about … We used to kid around at Uber that I was the machine learning team’s hype man because I would always be like, “And now we’re building this model that does this thing!” I would be really excited about it. One of the things that I thought was the most interesting and the most valuable was this thing that we created called next best action.

We looked at all of the actions that a rider could take. Could you … You could book a black car trip, you could have trusted contacts, you could pre-emptively book a trip to the airport, things like that. And we assigned an LTV value to that action. But you can’t stop there, because if we were going to start unveiling features purely based upon how much they were worth, everyone would have been told, “Take a black car trip,” because that was obviously the most lucrative for the business. Which doesn’t make sense if all you ever do is pool trips. It’s a little bit tone deaf to say, “Hey, take a black car trip,” but you always take pool.

So what we did was, we created lookalike models for each of those actions … how likely someone was to take that action. It allowed us to create a journey where what we were doing was unveiling the next best action for that customer based on their previous action. It really allowed us to create a very personalized journey that was telling people something they would actually consider doing. It didn’t necessarily have a dollar value associated with it. You know, adding a trusted contact isn’t actually a dollar value to the business, but it built a better relationship. It increased retention. And over time, because they’ve had higher retention, they will ultimately be worth more to the organization. So, shifting our thinking around that it’s not just dollars and cents, sometimes it’s actions and a depth of relationship building.

Then we were able to use these models in everything that we did. When we were doing our rider recap, for example, we knew which features were good features to highlight. When we were doing a campaign around Halloween, for example, or … Mother’s Day is a great one. On Mother’s Day we would recommend to some people that they could book a pickup for their mom and then go out to brunch. That was a great way to build … Your camera angle is the holiday, so it seems very relevant, but they’re being educated on a feature that they probably haven’t used yet, that really will help deepen their relationship with the business.

Thinking about all those different pieces separately and then bringing them together creates a messaging strategy and a communication strategy that is incredibly personalized and you feel seen as a customer. You don’t feel like you’re getting spray-and-prayed. It’s something you’re interested in, and again, it’s not always hand-out. Sometimes it’s, hey, there’s this great thing that you can use that’ll make your life better. It’s not gonna change anything. It’ll actually probably save you money.

John Koetsier: That’s very, very cool. That’s awesome. We’re getting near the end of our time that we have together and this has been really, really cool. Thank you so much for it. It’s been really impressive to listen to.

I think we had a couple issues in the transmission in the last five minutes or so. We’re recording this on March 12th and everybody, the whole world, is working at home or going to school at home, and the internet infrastructure is massively being utilized right now. Apologies for that, for anybody who’s watching this later, or listening to it later.

One more thing that I’d ask you is, we’ve heard a lot about your approach, which is incredible. We’ve heard a lot about what you’ve done, which is really impressive. We heard about some of your biggest successes. Share something more difficult now. What was your biggest failure as a retention marketer and what did you learn from it?

Jessy Hanley: I’d love to say that failures are opportunities for improvement. When something goes dramatically wrong or your results are just the pits, it really tells you that that metric is elastic and it gives you … I try to see it as, “Ooh, this is an exciting opportunity to move this metric, because if we can make it go badly, we can probably make it go really positively.”

One of the things I would say was the really big learning for me was forgetting to think about where someone is when you’re offering them an incentive. For example, when we were trying to win back some of our drivers, our initial thinking was, we should … I don’t know if you’re familiar with the way Uber does their driver incentives, but it’s, “Do X, get Y.” Take X trips, get Y incentive. It’s a very big part of the way that they do their incentives in general. When we were thinking about doing our win-back campaign, we wanted to leverage incentives.

Our first thought was, let’s start with a little bit more than what they were getting before. That makes sense, you know. We’ll give them more than they were getting when they churn. But what we failed to really think about – and it wasn’t all that successful when we tried that first – was that if someone has stopped driving, the incentive needs to be big enough to make their eyes like, “Oh! Okay, maybe that will get me back on the road.”

So it was quite a big challenge to convince everyone that we should try something a little bit different – and much larger than we were giving our active drivers – to win back the existing drivers. There were a lot of conversations around, how does this affect things? We wanted to make sure that our drivers didn’t feel bad about what we were doing, that we weren’t rewarding those who churn, which also wasn’t true.

What we found, which I didn’t expect, was not only did they come back, but actually their retention was better than when they were first on the platform, at least for a little while. Then another mistake we made is not having a re-onboarding. So eventually they got right back to where they were because they weren’t getting a different experience.

I’d say my biggest mistake is not always putting myself in the shoes of the individual and where they are. Giving them a little bit more than they were getting before isn’t enough to get them back on the road. For something that’s a heavy lift in terms of what you want them to do, you need to make sure that it’s enough for their eyes to go. “Oh, okay. That’s a big deal. That’s worth it for me to try.”

You want to make sure that if you are winning people back, you’re putting them into an experience that is perhaps a little bit better, or different, or improved from where they were before. Otherwise, they’re just going to wind up on the same path again and they will go through it faster. They’ll churn quicker simply because they’re not experiencing things for the first time.

Those are the big mistakes I’ve made. By learning that it works that way, it changes my approach on how I do those things all the time. I very much start from, let’s make sure that any experiment that we run, we are not gonna say, “Well, of course it didn’t work, blank.” Of course it didn’t work; the incentive wasn’t big enough. Or, of course it didn’t work; we didn’t target the right people. Or, of course … those are the types of things that we check before we run. Go big small, then see if you can scale it, is what I learned from that. But it was a painful journey to get there.

John Koetsier: Thank you.

Peggy Anne Salz: It’s such a journey to listen to you actually, Jessy. If you think about it, we have the metrics. We know about the cost of acquiring and keeping a user. Retention. We have the mistakes you made. We have the happy path. We have so much from this show. I’m completely convinced this was right, John: Have her on the show. Because this is Retention Masterclass; this is sort of our primer. This is a great way to kick it off, to continue, and there’s going to be so much more, because now we have the big picture we can delve down into it in more detail. Maybe even have you back, who knows.

Jessy Hanley: I’d love that.

John Koetsier: It was amazing. It was kind of like push “play” and watch Jessy talk, and that was incredible. We got a lot of learnings out of it.

For everybody who’s listening, Retention Masterclass is available wherever you listen to podcasts: Apple, Spotify, Google, Overcast, whatever platform you’re on, please like it, share it, comment on it, subscribe, all of the above. If you could rate it and review it, that’d be a great help. Peggy and I would really appreciate it. Thank you so much.

Mobile Marketing is Easier with Expert Guidance

Posted on July 19, 2022