How to Re-Engage Churned Users — Caroline Walthall, Quizlet

David Barnard:

Welcome to the Sub Club Podcast. A show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors, and builders behind the most successful apps in the world to learn from their successes and failures. Sub club is brought to you by RevenueCat, thousands of the world's best apps. Trust RevenueCat to power in-app purchases, manage customers, and grow revenue across iOS, Android, and the web. You can learn more at revenuecat.com. Let's get into the show. Hello, I'm your host, David Barnard. Today's conversation is shorter than usual and will be featured in RevenueCat's state of Subscription apps report. Each episode in this series will explore one crucial metric, ensure actionable insights from top subscription app operators. With me today, Caroline Walthal, director of Product Marketing and Lifecycle Marketing at Quizlet. On the podcast I talk with Caroline about the importance of cancellation surveys, leveraging social proof and win-back campaigns and why making it easier to cancel can actually increase retention. Hey Caroline, thanks so much for joining me on the podcast today.

Caroline Walthall:

Thanks for having me. Excited to dive into this topic.

David Barnard:

So we're going to talk about your top tips for re-engaging churned users and subscribers, but before we get to those tips, I think it's really important to understand why people unsubscribe before you even think about and why people churn out of your app. So let's start with the top reasons you see of why people churn out of an app or churn out of a subscription.

Caroline Walthall:

There's three main buckets of why people might churn from a consumer subscription. First of all, they may have hit a natural breaking point with your product or your use case and they don't need it anymore, so that's acceptable type of churn in some ways. And Quizlet, the way that happens often is students might graduate from college and they don't have constant tests anymore, and so yeah, we may not be a amazing fit for them going forward unless they're in certain careers and career paths where they have a lot of ongoing tests. There's an acceptable churn that can happen and I think sometimes people forget about that. Not all churn is literally bad. Some of it is natural.

David Barnard:

We were hearing about this more and more in the dating space as well of like, Hey, people churning from a dating app that's actually good for them, maybe not good for the business, but it's like you got to understand the business you're in and understand those natural churn cycles as well.

Caroline Walthall:

There's also moments when customers didn't mean to churn, but something happened with their payment method, their credit card changed because of losing it or something else happened and they didn't update their information. There's a lot of things you can do to address that level of more technical problem, whether it's really active communication proactively before a renewal cycle comes up, but also dunning, you can work with specific providers to help get to the root causes and figure out how to make sure you're able to apply new credit card numbers to old credit cards, things like that.

One of the biggest categories, and the thing that I think we can zoom most into today is maybe they didn't see the value. We have to be honest, that's a huge bucket as well, and there's a lot of things that go into that. They may have felt that the value that was offered just wasn't meeting the cost of the subscription or maybe it didn't perform as expected. Maybe there were actual issues with app or with the product. There could have been cheaper or easier alternatives to access or maybe the problem itself at the time felt like a burning problem, but when it came to actually needing to have a solution for it, they realized it wasn't that burning of a problem or that big of a problem, which sometimes happens for certain segments and not others in your audience.

David Barnard:

How do you get at those things? What's the best way you've found to understand why people are churning and even with the billing and the natural churn, it's sometimes helpful to understand that so you're not sending them the wrong message or trying to win somebody back when they've already graduated college.

Caroline Walthall:

Trying to figure out how to get personalized information or personalized reasons why people are churning is great and cancellation survey is an awesome thing to apply. Definitely industry best practice. So when people decide to go through and cancel their subscription with you, you automatically trigger some several question survey that just has some main categories for the reasons why they're done using the subscription at the time. And that can be just really helpful in sizing and directing your churn prevention efforts in the future and win back efforts that follow. And so we found that really helpful At Quizlet. I would say that as I mentioned, we have a good amount of acceptable churn due to students aging out, but the challenge for Quizlet is that 1\3 of those no longer need users are just done with that more pressing test or need that they had maybe not actually done with college or high school. And so we have a challenge to help people think about their preparedness for tests and quizzes and things like that on a more ongoing basis. So that's still a group we should be targeting, for example.

David Barnard:

On a tactical level, do you only use predefined answers to those questions or do you actually have a text box and then are you seeing anything especially crazy in that text box?

Caroline Walthall:

I think we used to have a text box. We over time were able to really narrow it down to these buckets that have been pretty consistent over time. It's a good idea probably to every so often open that up and see if there's more specific feedback that you can get. We do get a lot of good feedback coming in to our user operations channels separately to our help center and the agents that work on support at Quizlet. So we're able to put together the pieces from a few different sources. But yeah, it is an option you can leave a write-in and I think especially if you're just getting going, probably a good idea to do, also a good idea to just do some interviews with churning users and understand more deeply what the story is behind things and then create your categories from there. If you create those predetermined buckets out of nowhere, you might be missing significant cuts that you want to be able to track over time.

David Barnard:

So once folks have a good handle on why people are churning, I know you have three top tips for us to reengage those users. Again, to reengage both the usage, but then also what we all want in this industry is also to reengage them as subscribers as well. So what are your top three tips to reengage those folks.

Caroline Walthall:

To make sure you're delivering value is one of the most important things you can do here. And that comes into a lot of different forms. If you are shipping new features and experiences that people churned because you didn't have them, you can reach out to those people and let them know, "Hey, you asked, we listened." Kind of message. But outside of that, I would say one of the best ways is just to figure out how to deliver personalized value through lifecycle marketing based on things that they've engaged with in the past. So it might be using segmentation or using dynamic variables of things that people have consumed before. So if your subscription is content based using whatever categories you use to break down content, focus on providing really useful recommendations for those people. Bringing the freshness factor to the table too of we've got new XZ, say you love dramas on Netflix or whatever it is.

It's like having that relevant sense that we know you we're not just sending you random things or anything and everything, but we're leading with what you've liked in the past. And so I think that can go a long way. At Quizlet, one of the things we're doing is building out a social graph that's based on the courses students are taking. That data lets us send the most relevant to date hyper local content that's coming from other students in your course directly or from your school. I think that's the thing that is needed to capture people's attention, especially if they have decided to cancel a subscription.

You need to win back and give them reasons to believe that you are invested and that you have enough ways to help them that maybe they haven't tapped into before. And it just helps signal this idea of maybe a little bit of FOMO. There's other students studying here, there's other customers, millions of people accessing this or liking it. See why you want to just keep things fresh at the end of the day, but you also want to keep things personal. So that's probably my top one. I think that works across re-engaging users who just churn broadly as well as subscribers who churn.

David Barnard:

And on that level of super hyper local content as you called it, being able to say, "Hey, there's 20 other people studying this." Or even more broadly, "Tens of thousands of students are using us for algebra and we know you were taking algebra or whatever, and then hitting them with that next test, you're going to score way better and you're going to land higher on that bell curve. You use Quizlet because so many other people are."

Caroline Walthall:

The social proof is big, I think, and especially if you have enough usage to actually make those claims, it's something to lean into and test.

David Barnard:

Awesome. Well what's tip number two?

Caroline Walthall:

Yeah, so tip number two, probably not revolutionary, but given consumer subscriptions cost money and everybody's got a finite amount to spend at the end of the day, a lot of people churn because they're price sensitive. And so cancellation discounts or other personalized discounts to win back prior churners is definitely something to be tried. You have to be careful in how you approach this and definitely recommend working with a data scientist as you do so. But essentially you want to make these offers highly targeted. You can tier them as well, so you can give a bigger discount if they were a subscriber for a longer period of time, consider a smaller discount if they were maybe only subscribing for a month or two.

And so that's one way you can balance cost-effectiveness a little bit, but you don't want it to be a blanket discount that you're offering because at the end of the day, a lot of times that's going to really cut into your overall bottom line in a way that isn't really sustainable. Or if people learn that triggering the cancellation flow always means they're going to get a 50%, even if they say it's too expensive, but it wasn't really too expensive for them, you want to be careful with that a little bit and you need to apply some level of model. Whether it's bringing ML into things you can do ML modeling or just testing out some tiering structure that helps you mitigate the potential lost revenue from over discounting.

David Barnard:

Offering discounts is super helpful and again, for a ton of apps it probably just should be the default, but as you said, "As you get bigger, there's more things you need to do." And so I think tip number three speaks to that. So what's tip number three?

Caroline Walthall:

If you can't afford a discount or you decide discounting is complicated or maybe layering it on with discounting, these aren't mutually exclusive tips here is to offer more control over the terms of their subscription. As I mentioned, value. Sometimes this is because there's value there, but it's more intermittent value. Maybe they only have that use case every so often. It's not a daily use case or a weekly use case. You can try to think about how to offer shorter subscription durations or give consumers the ability to pause their subscription when they are in an off season for whatever that use case might be. So examples might be like Quizlet decided to offer a monthly plan. We tested into offering that a few years ago. We heard feedback that wanted more flexibility, especially if they were starting their subscription with us partway through the school year.

They didn't want to necessarily subscribe for a whole year. And so definitely paying attention to the natural cadences for the use case can help. And you can just offer a new subscription duration that you didn't have before. You can also give people, as I mentioned, the opportunity to pause a subscription so you could pause it and not pay for a few months and then it makes you happier to re-engage with it. Because you feel like the subscription respected the fact that as much as it might be a monthly cadence for some people or even for you, sometimes there's dependencies that you can't always predict as to how much you actually need that at any given month. And so I think giving people control builds trust.

David Barnard:

There's a lot of talk in tech and even more broadly in society about subscription fatigue and another subscription or whatever. And giving people control really is, and putting them at the center and making them feel like they have control is one of the better ways to build that trust and to make them feel more comfortable with the subscription. And I mean, I feel the exact same way when there's a subscription that I know is going to be a pain to cancel or that I don't feel those are the ones I really avoid. Any other tips around this helping people feel under control?

Caroline Walthall:

You can offer bundled subscription links as a promo as well. So say a lot of folks use your product for a certain duration. I think about within the EdTech space, if you're studying for high stakes exams, oftentimes you have a three-month window, three to six month window or something like that where you're studying really intensely for something like an entrance exam like an MCAT or LSAT or something like that, or other types of professional exams that people study for. It's in that realm. And so you could offer a specific bundle that's like getting a deal for maybe not the whole year, but a half a year or a quarter or something like that.

And you don't necessarily have to merchandise that as part of your normal options all the time, but if you see that somebody is churning and that's a reason why is that the length is not right or something like that, you can offer it then. Or maybe there's a sub-segment that you know about. Like I mentioned, if we see you're studying for specific exams, maybe we can say, "Hey, actually come back and use us for this specific duration and get a little bit of a deal on it." So that's another way to bring in a little bit of discounting into the duration piece.

David Barnard:

And then you also mentioned free trials and offering a new free trial. That's an interesting one. How do you think about that? And then how do you think about guarding against abuse of people who will just use that free trial a second time just to get through that one exam and then not ever pay again. So do you offer refresh free trial more judiciously?

Caroline Walthall:

Yeah, we do it more judiciously for sure, but we've tested at different points in time and we've seen some success. But you'll see companies like LinkedIn I feel like is a good example because I'll get these fairly frequently where they're trying to offer that Thirty-day free trial again. And I've used it, I think I've used their re-up on trial before and I think it did cause me to subscribe at least one time. And so it's like a friendly on ramp for something like LinkedIn, I think for students where there is a bit more gaming maybe going on too. We do exercise caution on that a little bit, but it depends how long ago that was.

And if we see you come back and we see you maybe are showing certain signs of being an engaged user, again, we've really come back and you seem to be focused because whatever classes you're taking that semester are a great fit for Quizlet. Yeah, maybe we should be refreshing that trial for you because we also usually have added a lot of value maybe depending on how long it's been since they last subscribed. If it's pretty recent, I wouldn't really do that, but if it's been a year since they subscribed, oftentimes it's a nice way to say, "Hey, here's all the things we've added."

David Barnard:

That's great. Anything else you wanted to share as we wrapped up?

Caroline Walthall:

Yeah, no, I mean this has been a great conversation. I think the only thing I'd say is at Quizlet we're always hiring, looking for great folks who are passionate about helping students and teachers and supporting the learning process. We've got an influencer marketing specialist role that's open right now. If anybody has a skill set that seems to match that, and we will be hiring for some other roles on the marketing team coming up, likely a life cycle marketing analyst role. So keep an eye out on the Quizlet comm slash careers page and yeah, we'd love to have great smart folks join us.

David Barnard:

A lot of great smart folks in this audience, so hopefully that'll drum up a few interesting candidates. Quizlet, it's another one of those... I feel like there's several really cool big subscription companies. I actually spoken to several of them in this series with the data subscription apps podcast. They just aren't on people's radar. It's like everybody talks about Duolingo or Strava or those big ones, but then there's a lot of really cool companies like Quizlet and onX and others in the space that just don't get talked about as much. So if you're in the industry and you're looking for a new role Quizlet that's a fantastic company. Been around a long time doing a lot of really cool stuff. So great place to join. Caroline, thank you so much for joining me today. It's been so fun, and thanks for sharing all your great tips.

Caroline Walthall:

Thanks, David. It's been really great. Appreciate it.

David Barnard:

Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by, chat.subclub.com to join our private community.