Our first customer churn — and it hurts
One of our earliest customers — a large automotive retailer and recognised Aussie brand — has let us know that they won’t be renewing with Mentorloop in 2017. Signed on just as we were launching Mentorloop 2.0 in the middle of this year, they were with us for 6 months in total. They were running a new mentoring program, and were open to new and local tech solutions — one of the real changemakers needed in Australia to foster a booming local tech scene.
As part of our customer success plan we check in with clients every 3 weeks, report their engagement stats back to them, and provide a piece of content, a tip or a checklist that they can share with their mentoring cohort to prompt action or engagement. We never missed an update with this client, and had a friendly working relationship.
I suppose we knew losing a client was inevitable — after all there’s a specific term for it in the entrepreneur’s lexicon: “churn” — but until it happened we hadn’t actually thought about what it would mean to us. It hurts.
Potential and actual investors, fellow startup founders, and our mentors had asked us about our churn rate, and we’d happily reply “zero!”. We may even have started to believe that it would remain so as our product got better and better.
But a couple of weeks ago received this email:
I have followed up with the various mentors and mentees and they are not using the system or finding value in it. As a result I wish to terminate the arrangement with effect 31 December 2016.
Many thanks, for your assistance and I hope that in the future we may be able to resurrect this facility and get better traction.
I wish you well with the further development of the product and your company.
So polite, so fair, and so brutal.
So let’s break it down (easiest to stomach first):
Many thanks, for your assistance and I hope that in the future we may be able to resurrect this facility and get better traction.
I wish you well with the further development of the product and your company
Delightful — this person is a friend of Mentorloop and flagged for follow-up in mid-2017 when we have a few more relevant features deployed that we know will add value for these guys.
As a result I wish to terminate the arrangement with effect 31 December 2016.
Couldn’t be plainer — love a customer who communicates clearly. And finally:
I have followed up with the various mentors and mentees and they are not using the system or finding value in it.
Well, bugger.
It couldn’t be more damning — our users have had the very opposite of the experience they’re intended to discover with Mentorloop.
Mentorloop was first built for the mentoring program coordinator — to relieve the admin burden, uncover latent demand among employees for mentoring, and allow them to observe and report on mentoring program outcomes. The latter outcome depends upon mentors and mentees using the platform to communicate with each other — indeed a lot of our product roadmap depends on the data created in mentor-mentee interaction to create better, more nuanced reporting (the mentoring quality score), and to train “Loopy” — our chatbot AI that acts as a mentoring concierge.
We know that mentor relationships atrophy, and we know that mentors and mentees working in the same office will default to their existing methods of communication — face to face, email etc. We describe Mentorloop to them as the “online journal” of their mentoring relationship, with built in features and reminders to help them keep their mentoring fire alight. But we obviously haven’t gone far enough.
With our last two feature releases we have paid lip service to user engagement, but I realise now we were prioritising features that helped us sell-in to the program coordinator, over features that delighted our end users. When you’re servicing two user groups there’ll always be a trade off in focus, but we got the balance wrong.
So in 2017 we’ll be prioritising:
- Integrations — users will default to their existing communication channels, let’s ensure Mentorloop can speak to those channels. Starting with email.
- Loopy the chatbot — our mentoring concierge doesn’t have to start life as AI, it can be a simple set of if-this-then-that-like notifications logic that helps our users break the ice and foster great mentoring outcomes for themselves and their organisations.
- Training for why, not how to use Mentorloop — we’ve got a simple product tour because we’ve designed Mentorloop to be user-friendly — it’s obvious how to use it. We need to get better at showing our users *why* they should use it.
I have followed up with the various mentors and mentees and they are not using the system or finding value in it.
It still hurts. But this was only the starting statement — we’ve working with our ex-client to access feedback directly from their participants which we can analyse, digest and act upon.
And now we have a new metric to track and influence — our churn rate — a starting point for the next stage of Mentorloop’s development as a product and a business.
Thanks to Glenn Smith for making me write this article after I described the hurts in our board meeting. And a shout out to Paul Towers for his “transparency in startups” quest which inspired exactly how honest I decided to be here. Finally thank you to the client for allowing me to reproduce their termination email.
