Managing the Self-Serve Customer Lifecycle

The four major stages of the self-serve customer lifecycle, and how to effectively manage them for better customer conversion and retention

Managing the Self-Serve Customer Lifecycle
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If you want your automated sales process to convert users as effectively as a human-led sales process, you need to actively manage it. In this episode, your hosts break down the major stages of the Self-Serve customer lifecycle and discuss what it takes to structure each stage so it sets users up for success in the next.
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(01:13) Managing an Automated Lifecycle

To use a metaphor here: Imagine you run a peanut butter factory. Of course, you’d look at acquisition (how do we get more people to be interested in our peanut butter?) and the quality of the product (how do we make our peanut butter really good?) to increase sales.
But there’s a lot that happens between acquisition and purchase. If the label machine places the label on every fifth peanut butter jar at a tilt, you can’t make up for that mistake with better quality. And that’s an inefficiency that affects sales as well.
In the Self-Serve space, we see a lot of companies that focus on getting on more people interested in their peanut butter and/or trying to 2x the quality of their peanut butter, but their label machine is misaligned or their lids go on crooked, and you just can't make up for that in eyeballs or quality.
Managing the Self-Serve customer lifecycle means accounting for “process mistakes” like these, and paying attention to the user timeline so that more users make it through to being healthy customers.

(09:08) Stage One: Setting Up

The first stage of the customer lifecycle is setting users up so they are capable of finding value within the offering. This includes:
  • Setting up the technicalities: signing up, creating an account, importing data, or customizing defaults.
  • Setting up the relationship: setting the right value expectations, building trust, and momentum so their success with the product is more likely

(16:27) Stage Two: Finding Value

If stage one answers the question of whether it’s possible for users to arrive at Value, stage two is all about creating systems that reliably help people experience it.
All the time and effort that users invest in setting up pays off in stage two.
That said, what value means to your users isn’t something that you get to decide for them. To effectively manage stage two, you need to identify the common patterns of value that users are seeking, find the most profitable ones to invest in, and optimize the path(s) to them so that more users experience those “moments of better off-ness.”

(24:59) Stage Three: Converting to Customer

If Setting Up and Finding Value define your “beginning-of-trial experience”, how do you manage your “end-of-trial experience?” This is usually within the purview of the Sales team. In a Self-Serve context, though, it needs to be as defined as onboarding or activation.
After users have experienced value, you need to:
  • Overcome any objections they might have by amplifying the “pull forces” in your product
  • Negotiate in case the price point doesn't work for them
  • Provide a seamless payment experience to close the deal once they’ve made a decision

(35:23) Stage Four: The Rest of the Lifecycle

Converting to a customer is just the beginning of someone’s journey with your product — especially considering that you will need to receive multiple payments before they clear the cost you’ve invested in acquiring them.
The main focus areas for this stage are:
  • Churn: How much can you learn from users who are leaving?
  • Expansion revenue: How does initial value compound or change over time?


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Toggle Transcript
Yohann: Hi, I'm Yohann.
Samuel: And I'm Samuel and you are listening to the newly rebranded Self-Serve SaaS 'Cast, formerly branded as the Value Paths Podcast, which was previously branded as the Self-Serve Rev 'Cast for Self-Serve revenue. We're coming almost full circle back to Self-Serve SaaS, but that's really the topic that we just can't get over and, uh, what we continue to obsess about. So we're just calling the podcast that from here on out.
Yohann: Yep.
Samuel: All right, well, enough of that. So, so the topic today is uh, freshly off discussing the hidden advantage of Self-Serve SaaS, which I guess in a nutshell is that you have lower ARPA, Lower Revenue Per Account, but that means you have more volume, and it also means you have a fully automated sales process with a lot of people going through it, which gives you some very interesting feedback in the form of data and experimentation results, so on and so forth that really lets you optimize your sales process in a way that a sales-driven company could not.
Yohann: Absolutely. "Optimize your sales process" being the key phrase here.

Managing an Automated Lifecycle

Yohann: In the same way that a sales team is thoughtful about how they approach the sales process, the Self-Serve sales system needs to be thoughtfully approached as well. Whether you like it or not, you have an automated sales process in place, and if you haven't paid attention to it in a while, it's probably not converting as best as it can.
Samuel: And so today we're talking about how to manage that Self-Serve sales flow to be as effective and high-performance as possible. Just because you have a lot of data to work with, which will quickly let you know what kind of impact your changes are having, you still need to have a general idea of where to focus your attention and which changes to prioritize because your resources are always limited in that regard.
Yohann: So what we're going to do in this episode is breakdown, roughly breakdown, the stages or regions of the Self-Serve customer lifecycle and talk about each one of them in a little bit of depth, going into what are the main things you need to think about there in order to execute that stage well. So that it contributes to getting people to the next stage, which is ultimately what you want to be doing, getting people through the sales process so they get to the end of it and pay you for the first time and beyond, keeping you later on.
Samuel: Yeah and I don't mean this in a dehumanizing way, but I think of it like an assembly line. If you had a peanut butter factory, where you made jars of peanut butter and boxed them up and sold them and shipped them out, there's a process that you go through. It's a very, a lot of times there are like calming videos on YouTube where you get to watch, like the peanut butter get put into the jar and then it moves on, and then it gets the label slapped on it, and then the lid gets screwed on or whatever, vacuum sealed, whatever the stuff is.
Yohann: I'm always surprised by those videos.
Samuel: And what we were talking about last time and one of our bigger points in general is that if you're a Self-Serve company and you don't have a capital S Sales team or sales process, then a lot of times founders look at marketing acquisition (how do we get more people to be interested in our peanut butter?) and then the quality of the product (how do we make our peanut butter really good?)
But there's a lot that happens in between those two things. If the machine that puts the sticker on, puts the sticker on at a weird tilt, one out of every five peanut butter jars, you're not gonna make up that difference by having just way better peanut butter.
That's just a, it's just an in an inefficiency. And what we are seeing is that there are a lot of companies that are trying to get a lot more people interested in their peanut butter and are trying to just make 2x better quality peanut butter, but their label machine is misaligned, and when the lid goes on, it's sometimes crooked, and you just can't make up for that in eyeballs or quality, in my opinion. Or at least, those are not your only options, and there's a whole bunch of other ones to consider. And so, to your point, we've got roughly four different stages to keep in mind to be thinking about how to prioritize, whether you fix the label attacher or the vacuum sealer first, et cetera.
Yohann: I love the metaphor and I think it's very apt.
Samuel: Oh, well, thank you Yohann. So, without further ado shall we do a quick run through of the four main stages as we see them?
Yohann: Yes.
Samuel: Okay. And so to me, when we're talking about organizing your efforts and deciding where to focus your time and energy... when you look at the drop off rates of how many people make it from sign up to getting through your initialization flow to finding value in your offering, converting, expansion revenue, churning, et cetera, these are all different little inflection points that determine the process of users or customers creating revenue for your business, and if you pay attention to where you're losing the most customers, it's early, early in the process. At almost any point, like of the four stages, the earliest part of the stages are generally where you'll be losing the most people.
And the earlier stages are where you will also tend to be losing the most people as contrasted with the later ones. So the amount of people that you're bouncing upon account creation is going to be a way higher churn rate, so to speak, than the amount of people that you're losing after they've been customers for three years, for example.
Yohann: Right. So you want to focus on the earlier stages of the customer lifecycle first and foremost because the more people that you can get through to conversion, uh, the healthier your cohorts will be later on.
Samuel: And it's a lot faster feedback too. If you're trying to address, like, how do we improve our annual renewal rates? I mean, that's a very worthy consideration, but tends to be a pretty slow feedback loop. If you're saying, how do we get more people from, let's say you have. Step A, B, C, and D in your onboarding flow and you're trying to get more people from step B to C, that's gonna be a lot faster than how do we get people to become six month healthy subscribers or how do we get people to engage in, in some sort of expansion activity eight months after they've created their account and become a customer.
Yohann: Another point I'd like to make before we dive into the stages is, when you've got a sales team in place, a salesperson sets the agenda for how this sales process unfolds. So, you're booking a call with the salesperson, they choose how the demo goes, you know, things like that. But with this, uh, Self-Serve process being automated, the motivation or the fuel that is propelling the user through the timeline is their own desire to get to the end of it. Which is why in a sales team, a persona makes sense. Sales teams will very often put a persona together and then get on the phone, and once they're on the phone, ask the user about what kind of problem they're trying to solve at their company and take it from there. But because this system is automated, personas don't make sense. They don't give you all the information you need to adequately fuel the user through this process. You need to be thinking about their problem and their situation from the get-go. And personas will give you a bunch of demographic information without filling in too many of those gaps. So we recommend thinking in terms of outcomes and situations rather than personas and demographics in order to design this automated sales process.
Samuel: I agree. And let's touch on that more in the four big stages that we're gonna outline here.
Yohann: Absolutely.
Samuel: All right, so I guess just to rattle them off at the start here: Stage one, setup. Stage two, finding value. Stage three, converting to customer. And then stage four, which I feel a little conflicted about, we can get into this when we get to it, but stage four is the rest of the lifetime. And there's a lot, there's a lot that goes into that, but as we mentioned, if you're losing a ton of people upfront, it makes sense to put extra emphasis on zooming into those earliest moments and using those as levers to set people up for the longer term success. But that doesn't mean you can just ignore the long-term success part either.

Stage One: Setting Up

Samuel: And so for the first two stages, it's important to us to separate Setup and Finding Value. Because having spent as much time focusing on user onboarding with so many kinds of different companies and products and onboarding requirements, it became clear to us that when we said onboarding, we meant positioning people for success, long-term success, for themselves and for the company.
But when other people hear onboarding, a lot of times they just think that it's like the welcome tour or a couple emails that get sent out or a minor activation window that people pass through in route to becoming regular users. And I think that it's important for our industry to recognize that there's a difference between getting people through your setup flow and just getting them to a point where they are enabled to be able to experience value, and then the process of actually getting them to experience that value firsthand for real.
And so, to separate out the sort of, is onboarding meant to position people for long-term success or just to get them activated, we split it out into two stages: Setup, which is just get the people ready to do stuff and then actually help them do stuff in stage two, which we call Finding Value.
Yohann: Yeah. I think that drawing clear lines between signup and activation makes sense from a company point of view, because you need to know which teams manage what and so on. But when you think about what actually needs to happen in order for users to find value... it's not clear where one team's responsibility ends and another's begins. For example, when I think about the setup process, the two big things that come to mind for me are how you build trust with the user and what expectations you set with the user. And both of these things can happen in the Marketing side of things, and later in the Product side of things before they begin to find value.

Building Trust by Setting the Right Expectations

Samuel: Well, and to, to a point that you often make, those things are already happening whether you intentionally arrange them to do that or not, it's just are they the expectations that you wanna set and are capable of following through on.
Yohann: Right, and expectations, not just in terms of "this is the kind of value that they expect to get once they finally dive into the product," I also mean expectations in terms of the process. If they're signing up for your B2B software expecting to be set up in the same way that Instagram sets them up, five minutes, create an account and you're done, that mismatch of expectations can put a lot of pressure on your onboarding that it might not be able to meet.
Samuel: Or alternatively, might turn around and provide the wrong kind of, I guess to use a loose term, experience for the user. I know for me personally, I've encountered onboarding experiences where they're like, "go through our 30-second setup wizard and you'll be up and running," and I might be 8 minutes, 10 minutes into the process and still not be done and feel like a moron. Who are all these geniuses who are cranking through this in 30 seconds? Or again, like to your point, maybe it just erodes trust and either they turn it on themselves and think what's wrong with me? Or they say this company is approaching this expectation setting like a bozo and I already can't take them out their word because they said that this 10 minute thing was gonna take 30 seconds. The very first step, we're already misaligned.
Yohann: It's so easy to mistake your familiarity with the problem for everyone's familiarity with the problem.
Samuel: Well, or this is something I picked up from Kathy Sierra, to not displace the complexity of something onto the user's lap and make it their responsibility. If you're TurboTax and you say, "get your tax is filed in 30 seconds," it's just not reasonable.
And so to instead, approach the users who are going through this workflow as human beings with a sense of dignity and let them know, "Hey, this is gonna be hard. Here's what you need upfront. Here's what you might wanna prepare ahead of time," et cetera. Set them up for success rather than just lying to them and making it feel like they're the ones who are dumb.
Yohann: Yeah, so we've covered the process level. I also feel like we should cover the value prop level of this. We've done it in the past, but I feel it deserves a mention here, specifically the distinction between thematic and practical outcomes. To tell a small story here, the last company that I worked at, we were all talking about what the value prop should be and how we should set users up for success, and again, what expectations we should set with them at the early stage on the homepage and the Head of Sales, the Head of Sales says, " we have a product that saves people time. So just have a picture of someone sitting at the beach with a mojito in their hand and that'll be enough to get them on a call with me and I'll take it from there."
Samuel: If they see alcohol on the beach, next thing they're gonna do is pick up the phone baby. That's all they need to see.
Yohann: Yep. And that's all I need... once they're on the phone, you know, like, consider the deal closed. So what I'm trying to say is, A thematic outcome might work with a very confident salesperson. I have no doubt that that Head of Sales that I worked with could have, could have closed the person who was interested in a thematic outcome.
But it just doesn't work when it's on your product, in an automated way, talking to a huge number of people to tell this person how your product can get them to mojitos at the beach.
Samuel: I have not met this particular salesperson, but assuming their perspective a little bit, I imagine that one of their ear earliest priorities in establishing that relationship with the potential customer is to find out what that potential customer's personal definition of mojitos on the beach is. When you're saying thematic outcome, that means big broad, not super concrete or specific versus practical outcome, like, what are you hoping this will unlock in your life for you, essentially? And you could poetically say that it is like being on a beach and sipping a cocktail but ultimately, like there is an actual concrete, real life individual outcome that you're pursuing.
And in my light experience, I found that some of the best salespeople are really laser-focused on how does this serve a need for you and how does this fit into your life? And if you can answer that, you can position your offering to be the best option for those things rather than to your earlier point being the best option for a caricature of a kind of person or a persona.
Yohann: Internally we call it identifying those moments-of-better-off-ness.

Stage Two: Finding Value

Samuel: Right. Well, so, and that's a pretty good segue, I would say to stage two, Finding Value. So in theory, what we're saying, stage one of Setup is all about is: is the person capable of experiencing whatever their personal mojitos on the beach is that you can offer to their life. And so that might require that they get data imported, they might be coming from another integration that you might want to think about. If a lot of people are coming from some other third-party software, how can you make it easy for them to come in and get set up quickly?
Let's say that they need to, I don't know, import medical records or tax history or whatever kind of data needs to be uploaded. Or if they wanna publish a podcast, how do they get their back catalog migrated over from their other host, so on and so forth. These are all, to me, set up questions that position the person to then be able to move on to stage two of actually directly experiencing value in their own terms.
Yohann: So one pitfall to definitely avoid is to not think about onboarding as setting users up alone, because that leaves the whole finding value part of the lifecycle unattended. If your onboarding includes some setup, that's great because users need that in order to find value, but it can't end there.
We've seen a lot of onboarding flows that will go so far as to just set users up with their profiles, let alone the other things that they need to be set up with before they can start finding value. Just a pitfall to avoid. Let's dive into stage two.
Samuel: All right. And so with stage two, Finding Value... maybe an illustration to draw this distinction even more clearly. Let's say that you're ChartMogul, where somebody needs to import a bunch of data, and that's a hard process that's very complicated. Might be a little scary for people to be putting their revenue data out there, et cetera. But having that be a setup activity is clearly different from somebody using ChartMogul to look at the data and gain insights about how to run their business. In the first stage, we're just saying is it even possible for people to arrive at insights? Whereas in stage two we're saying, okay, how do we actually create systems that reliably help get people to where they are trying to go, and where their efforts in the first stage of setting things up were an investment toward having some sort of eventual payoff in terms of their own personal value.

Defining Outcomes and Paths to Outcomes

Yohann: Right. That payoff is so important. And so, one of the most important things to me to think about in this stage is how you're breaking down the steps to that payoff. That said, before we dive into talking about what steps you include and how you design those steps, you need to know what the patterns of payoff are, what are the different kinds of value that users are expecting to find with your product.
Samuel: Yeah, absolutely. Because when we were talking about the person's individual actual mojito on the beach, that's not something that you get to decide for your audience or your user base, and you definitely don't get to decide that everybody wants that one thing. Or if you do, then you are narrowly defining your market as not only people who fit your ideal customer profile, but also fit that and want the one specific thing that you decided is the thing that your users want.
And so rather than having a monolithic, top-down prescriptive approach where you get to just say, we offer you time, freedom and flexibility, or whatever. Instead, thinking about what are the different major patterns in terms of what people are actually seeking and how they're actually trying to fit this into their life.
And how do we identify... first of all, identify the most prominent patterns, and then start thinking about how we can create processes that deliver people to the pattern that they themselves are specifically seeking.
Yohann: When we talk about supporting different patterns, we are opening the door into segmented UXs and things like that, but let's.
Samuel: Let's hijack. Yeah, let's do.
Yohann: We'll save that for another episode because it's a big thing. But the default experience that everyone is going through, let's just say you have done some pattern finding and you've chosen the biggest pattern, a majority of the people are coming to you for this particular payoff. Once you've identified that, you can create the default experience that everyone goes through, unless you know you have segments in place for people later on.
Samuel: And when you say that you can create the default experience that leads people to that particular kind of value how do you recommend people approach that?
Yohann: There are two parts to this equation. There is the part of "what do users expect this process to look like?" Ideally, when you're hunting for patterns within the payoffs, you are also looking for patterns of how people expect to get there. So what do people expect to be doing? And if you can align the process you create with what people expect to be doing then, you are very aligned with the user motivation fuel that we were talking about before. On the other hand, it's also important think about what's absolutely necessary for this payoff to come about.
Samuel: So in, in a sense, what we're saying is to look at the characteristics of the user's current situation as much as possible. What do they have right now? How are those characteristics different from the situation that they wanna be in, that they think that your app can help them get to? And then it's really just a question of taking their currently available characteristics, what is presently resources, people, ambitions, et cetera, that they currently have available to them, and how do you turn that into a situation that has the characteristics that they are desiring. And if you look at it through that lens, it helps highlight the crucial characteristics that need to be changed. And it also lets you know what you have available to work with on their end to be able to turn those characteristics into reality for them.
Yohann: I love it. I love how practical these considerations are. You're not working with themes and abstract steps you're working with, "this is literally what needs to change from this situation to that one. And so we need to put a process together for those changes to take place."
Samuel: And also for the sub changes to take place along the way. And it sounds esoteric, but it becomes like way more straightforward when you are just looking at the characteristics of the... to use an earlier example, we have a vat of peanut butter and a bunch of empty glass jars. We know at the end state, we want peanut butter to be in the jars, and for it to be vacuum sealed, and for it to have a label on it and the lid to be screwed on tight. It lets you know what the sequence of events that have to take place in between are because you're highlighting the specific end requirements and tying those back to what you currently have available as resources.
Except not only are you doing that, but you're doing it on the user's behalf and you're never a hundred percent sure of exactly what criteria defines their successful end state or what resources they have available to them. But even if it's guesswork, it's much more educated guesswork than just saying, maybe we wanna offer people freedom with their time or something like that.
Yohann: Right, right.
Samuel: Onto stage three?
Yohann: Yes. We should do a whole episode on breaking down characteristics and going from point A to point B,
Samuel: I would love to! Do you wanna do it now?
Yohann: We'll just do segmentation and the whole breaking down characteristics all in this episode.
Samuel: Let's just get it all in. We're just gonna do like a five hour episode. All right.

Stage Three: Converting to Customer

Samuel: Stage three, I'm gonna be the voice of reason. Stage three. Now somebody has gone through stage one of setting up their account to be able to experience value, stage two of actually going through the process of personally experiencing that value.
Now the relationship is warmed up. They understand how you're offering can help them be better off. They're probably a lot more open to paying you money and converting into a customer, and you wanna make sure that you nail that experience as well. So to put this in very practical terms, let's say that you have a two week free trial. You might be focused on your onboarding experience in the sense of how do we kick off the trial? Do we give 'em in-app messages that guide them through different features to explore whatever your "onboarding experience" is, but if that's your beginning of trial experience, how much attention are you putting to your end of trial experience?
How do people know when this is about to wrap up, what they stand to lose if they downgrade back to free, whatever those kind of consequences might be. How do you really nail that and when it's time to put a ring on it and they've gone through the just impossibly unlikely process of hearing about your product, deciding that they could use that particular product in their life, finding it online, maybe downloading your app from the app store, creating their account, hopefully finding value.
Like, you're losing people at every step of the way. And for the people who want to pay you, don't fumble on the one yard line, you know? Put a ring on it, and really do a good job of actually stepping in and having your automated sales approach be as proficient as an actual salesperson.
Yohann: Right, I was just gonna say, this is stuff that salespeople think about all the time. How to overcome objections, how to negotiate if the price point doesn't work for a customer, how to finally close the deal and celebrate the success. The automated sales process needs to do all of these things that salespeople think about all the time.
Samuel: And yet time and time again when we look at Self-Serve systems that people have in place, it's just some third party billing flow and you gotta go into account settings to even be able to initiate the process of paying you money a lot of the times.
Yohann: So really what you've got at your disposal are the product and email to do these three things that are part of every sales process, which are overcome objections, negotiate, and close the deal. With negotiation, it's fairly straightforward, you have incentives and coupons and discounts and things like that. When it comes to overcoming objections, it's not like you can have a conversation with the user and address all of the concerns that they have. So it's not like you can eliminate the forces that are pushing them away from the product. Instead, what you can do is amplify the pull forces that pull them towards the product. I think this was an Intercom thing that they came up with years ago. The difference between Pull forces and Push forces.
Samuel: I think that was the Jobs To Be Done dudes, in fairness, the four forces, Bob Moesta.
Yohann: Ah, okay. Okay, got it. Thank you for the correct attribution.
Samuel: Shout out, Bob Moesta.
Yohann: But what I'm trying to say is you don't have this opportunity to address the Push, so you have to amplify the Pull, and that's where the outcome and motivational fuel really becomes important. I know it sounds like we're broken records but this is why designing backwards from an outcome is so important in a Self-Serve context. It's really the outcome that's pulling the user through this entire process. If you are amplifying the outcome and making it really easy for users to see how they can unlock this outcome over and over again until it changes later on in the expansion side of the lifecycle, that's your best bet when it comes to making more conversions happen.
Samuel: I think that there are also a lot of "is the label sticker being put on correctly?" questions that arise at this stage as well. Instead of just critiquing unthoughtful design, one example that I thought was really thoughtful, that I encountered somewhat recently was a free trial that didn't require a credit card upfront, but if you wanted to extend the trial at the end, then they'd say, "okay, you can extend it, but you gotta give us your credit card now."
I can't really think of a lot of other companies where I've encountered that. I'm sure that there are others that do it, but it's not like just a total boiler plate playbook item that occurs to most companies, I would say. A lot of times it's just the trial ends, you either pay us or you downgrade. If you wanna change your mind, let us know or whatever. And that's just, that's not even remotely close to how an actual salesperson would approach things.
And so what you need to do is to create a, an interactive experience that mimics what a salesperson would do to whatever highest leverage opportunities you can identify. But also think about... again, just looking at like the Sales perspective, like capital S Sales, I think that a lot of it is less about how do you push your offering onto somebody and instead how do you clear the path to help them buy it instead of selling them on it, you're the purchase helper. And if you think of your automated sales process in a similar way, it opens up a lot of opportunities to replicate things that a human would do, even just in a compassionate way if they were aware of a particular user's given situation, like being at the end of their trial or whatever, and leverage that in ways that have a direct and measurable impact on revenue.
Yohann: Another example that comes to mind is to offer trial extensions based on what people are doing inside the product. So user behavior-based product trial extensions, where if users have configured a particular thing and they're using a paid feature to do it, give them a trial extension on that particular paid feature. Waive the feature gate, even if you enforce all of the others.
Samuel: Or thinking about all of the lapsed trials that you had in the past and not giving up on those people, and I mean, you can choose to restart somebody's trial at any point. Even if they last used your offering six months ago, you could say, "Hey, we've got these two cool new features and it's such a game-changer that we're restarting everybody's trials," or something like that. There would be opportunity there as well. Another thing is also looking at your transaction success rate and your transaction fees in general. A lot of companies seem to take a kind of scattershot approach to whether they require that you provide your zip code when you're entering your credit card or not, and it adds a little bit of friction, but it can unlock cheaper transaction rates with credit card companies, things along those lines. Again, let's not do a whole episode on that necessarily, but there are a lot of opportunities to just look at...
Or here's another really simple example. If somebody's at the end of their trial and they need to go through your billing flow in order to become a customer and continue using the features that they had access to, it probably makes sense to put like a testimonial somewhere in your billing flow, and that's something I almost never see.
Like you very rarely see any sort of marketing type tactics used deeper into the customer lifecycle, especially deep within the product, especially in a flow that is often relegated to third parties or whatever. But to whatever extent that you have in customizing the experience, especially if as we've talked about, where all roads lead to outcomes here, if you've identified the top three outcomes that your users are interested in, and you happen to know that a given potential customer is really interested in outcome X, have the testimonial that you feature in the billing flow speak to how much value people got out of achieving outcome X and show that to the outcome X desire-ers, to whatever extent you can. These are the kind of things that I think that a real life salesperson would just almost intuitively and unconsciously do, but that we need to be conscious about because we're the creators of systems that allow people to do this for themselves.
Yohann: One more example before we move on?
Samuel: I would love another example.
Yohann: Wix does this really cool thing after you've been through their whole onboarding process and you've set up your website, where they tell you what continuing along the process will unlock for you. Say, setting up your website is step two, they'll send you an email that says, look at what can happen if you reach step five and it's personalized to the site that you just created. And it's hugely motivational if you've already taken two steps to see what step five would look like and just go, "gosh, three more steps I can do this."
Samuel: There you go. So lots of opportunity there. I personally think that it's a really under-considered aspect of user experience in general. I don't know, billing flows just don't get a lot of love it doesn't seem.
Yohann: Yeah. Payment methods, transactional emails,
Samuel: Invoices, receipts, all that kind of stuff. And it often feels like really scattershot and like it's coming from a bunch of different companies. It's not a unified and coherent experience for the end user, almost across the board.
So put some effort toward putting a ring on it. If you're gonna propose, wear a suit or whatever appropriate garment would be in that scenario, you know, brush your teeth, it's not a bad idea.
Yohann: Never a bad idea.

Stage Four: The Rest of the Lifecycle

Samuel: And so if that is stage three, then I mentioned it feeling a little conflicted earlier, stage four is The Whole Rest Of the Customer Lifecycle. And it reminds me a little bit of the meme where it's like how to draw an owl and step one is draw a couple circles and step two is draw the rest of the fucking owl.
Where again, intentionally we're saying that the early part of the customer experience deserves disproportionate attention. But that doesn't mean that you can just totally, like once somebody converts to becoming a customer, that you can just assume that everything is fine from there or that they will even become a profitable customer from there.
That, you know, when you're looking at the economics of how much it costs to acquire customers, get them through your offering, have them take up time with customer support and so on and so forth. You've invested a lot of time and money and resources in just bringing that person into your ecosystem. And the very second that they become a customer, unfortunately, is not the very second that they become a profitable customer.
The whole basis of the business model of SaaS is that you spend more upfront to get people to become customers by making their first transaction, but that the nature of the transaction is that it sets up an indefinite amount of follow-up transactions via a subscription revenue model, and you really need to have those additional payments in place before somebody can even crawl out of the red that they wound up in because of how much it costs for you to acquire them in the first place. If all a customer does is pay you once, your SaaS is almost definitely underwater.
Yohann: And this is a place where sales teams sometimes drop the ball too. So far we've been talking about having your automated sales process match up to a human-led sales process. But one of the big conversation points in customer success today is how it should be more than just keeping accounts happy and then messaging them to upgrade every six months.
There is a lot that can happen to develop the relationship, especially how value changes over time.
Samuel: Yeah, absolutely. We talk about stage two as Finding Value. Really, that's just the initial outcome that somebody is maybe most immediately pursuing, but you need to continue unlocking outcomes for them over their lifetime in order for them to have a healthy subscription lifetime. I can't remember who said it, but I remember a really nice quote where they said, "if your company wants compounding revenue, are you providing compounding value?"
And I think that's very close to what we're talking about here, where, again, there are different, like, peanut butter jar sticker alignment questions and just are you just dropping the ball on the basics? But beyond that, if all roads do lead back to user outcomes, how do you identify those longer term, super healthy standout subscription outcomes rather than "somebody came in and, eh, maybe it worked out, maybe it didn't and they left after a couple months."
Because even if they pay you for a couple months, they probably haven't paid off their CAC, Cost of Acquiring a Customer. If you paid $800 to get somebody to convert to becoming a customer and they pay you $40 three times, you're out $680. And that's a lot of risk for a company to take on and to not want to actively have a hand in managing other than trying to make their peanut butter better.
And so, beyond just providing continuous preferably compounding value to your customer base, there are other more tactical things that you can be considering as well. Sort of like when we were talking about what's your end of trial experience or what's your customer conversion experience?
If you're in a position where you're trying to generate expansion revenue and if you want to get Net Revenue Retention over a hundred, you need to have expansion more than compensate for churn, for example. Where's that expansion coming from? Ultimately, you need to enable and not only enable like "provide them the capability of, of expanding," but provide them with a compelling experience that facilitates them expanding, and thinking about what are your upgrade flows look like? Or if you have usage-based pricing or seat-based pricing, how do you help your customers feel like they're in the driver's seat when it comes to being able to become better customers for you? And then conversely, there are gonna be times where people either downgrade or have some sort of contraction sort of activity or churn entirely. And how do you create a compelling experience around that? I remember infamously when, uh, Josh Pigford sold Baremetrics to the new owner. The new owner required that everybody who wanted to cancel their account had to get on the phone with them and tell them why.
And uh, it caused a little bit of a stir as I recall. People on Twitter were not super happy about it, but at the same time, I imagine that the new owner learned a lot about why people were churning and how to create systems that to better support people and things along those lines. So, not saying that you wanna put your thumb on the scale too much here, but there are different ways to generate goodwill by either putting some gentle guardrails in place that help people understand what is at stake in downgrading or canceling and what they might lose. For a long time, I had a lot of uh, videos hosted on Vimeo, and when I went to go downgrade my account, it was like, "okay, but you're gonna lose these 120 videos. Is this cool with you?" And I had to really take a minute to think about it: and like, do I have backups? Am I prepared to do that? They didn't have to have that step in. They could have just left me with the crushing realization that I lost a bunch of videos and couldn't download them ever again.
But instead they like helped me pursue my own interest and have a thoughtful experience about what I wanted to do. At the same time as letting me know in some sort of, I guess what you could call like a negotiative way, what was at stake if I didn't continue being a good customer for them too.
Yohann: Yeah. And they reminded you about how much value you were able to unlock with them.
Samuel: Yep, absolutely. And so just taking a thoughtful approach, like it's not that you need to, I think a lot of times when companies try to solve their churn problem, it's like they're just trying to plug holes in a leaky bucket. Which I'm not opposed to, but it can be an indiscriminate approach where you're, a lot of times if you're just, if you're taking the page out of the new Bearmetrics Owners' playbook, for example, adding a ton of friction and inconvenience and getting people to cancel is not going to build goodwill.
And so having a smoother process, even if it means that people are, that you're helping them churn, basically, it could still be helpful from a brand sentiment, word of mouth. Or maybe somebody's just canceling cuz they got hired at a different company and they wanna sign their new company up with the thing and create a new account.
There, there are all kinds of ways that you wanna be mindful of the relationship that you have in place, but there are also ways that you can put thoughtful, considerate points of friction in place that just at least help people pause and reflect on how much value they've generated and how much value they stand to lose.
Yohann: Yeah, I think that's very well put. Churn could be one of your biggest levers for learning about how your automated process is doing.
Samuel: Yep, absolutely. And so when we talk about drawing the rest of the fucking owl, like there is a lot that leads up just to having somebody become a customer. But in a lot of ways, becoming a customer is really just the beginning of their revenue production journey, and thinking about how to at least identify the biggest inflection points there and see if you can have some surgical changes made to your default automated experience to help people along in whatever direction they're trying to go and continue to be conscientious and supportive of them and especially be able to capitalize on...
I mean, especially if we're talking about cancellations in particular, I think learning why people are canceling and getting a clearer sense of how you might have had a disconnect there. That can be helpful. Like for example, a lot of times when people have a cancellation survey that people have to fill out when they cancel their account, a lot of times you get "asdf", but then other times you get helpful information, or something like, "I am switching to your competitor cuz they have feature X and you don't."
And that might be helpful in terms of thinking about competitive parody in terms of features, but it can be infuriating if you do have Feature X and the person just didn't realize it and you lost a customer because they thought you didn't have something that you do. So if you hear that kind of feedback when people are canceling, you can proactively go in and think of ways of how do we get people maybe through an earlier during their trial, there's a lifecycle email that goes out and mentions feature X more explicitly or whatever that might be.
A lot of times if you stem it off earlier, you don't have to deal with the consequences later on when it's probably too late and the person's already made up their mind.
Yohann: Yep. I think you've beautifully set up our next episode, which is going to be all about churn.
Samuel: Yep. Next on deck. We have one of my favorite people in SaaS, Scott Hurff, from Churnkey. They focus on churn 24/7 over there. Some really smart individuals. And you and he had a phenomenal conversation that I am excited for our audience to get in on as well.
Does that cover everything, Yohann, any other major points that, that, that needed to be considered?
Yohann: Uh, no, I think we covered the four stages of the lifecycle in a good amount of detail for now. There's a lot more where this came from. Like, we found it really difficult to not go into segmentation, to not go into how you break down outcomes, to come up with steps so that more users find value. Expansion is a whole can of worms to open up. So, there's a lot more detail to go into. Stay tuned. We are just getting started on how to put these kind of automated systems in place so that you have a more successful Self-Serve business.
Samuel: We're rooting for you and if you have any additional thoughts or concerns or questions, you can always let us know at
Yohann: Thanks for listening, and we'll see you next time.

Episode Discussion

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Written by

Samuel Hulick
Samuel Hulick

Co-founder: Self-Serve SaaS, prev founder of UserOnboard

    Written by

    Yohann Kunders
    Yohann Kunders

    Co-founder: Self-Serve SaaS, prev Airbase and Chargebee