- The importance of the first 24 hours in user retention.
- The necessity of ongoing engagement to prevent user dormancy.
- Early-stage user drop-offs are a major challenge.
- Defining and measuring ‘active’ users is crucial.
- Customization of user engagement strategies based on detailed segment data.
- Effective CRM strategies can dramatically improve retention.
- The risk of high engagement reducing lifetime value in certain models.
- The pivotal role of customer lifecycle management in digital subscriptions.
TRANSCRIPT
[00:00:00] Mantas: At a certain point, you realize that you don’t even need to convert all of the customers, let’s say, or convert all of the leads, which you get because part of that leads will inflict you early stage refund or something like that. When you are increasing engagement of customers and increasing engagement basically kills lifetime value. It’s what I call disposable product, right?
[00:00:24] Exacaster: Welcome to CVM stories, the podcast on customer value management. Together, we explore how companies can be more successful and the customers happier through the use of latest customer value management techniques. Learn key commercial and analytical insights from telecoms, retail, finance and other industries that drive CVM forward. Hi, I’m your host, Egidijus. Today our guest is Mantas Ratomskis who is an expert and lecturer on user life cycle management. In this episode, we will discuss how to master customer value management in mobile apps and digital subscription businesses. Mantas will cover the optimization of critical customer life cycle stages, hidden retention strategies, and will share some secrets on user engagement and loyalty. So let’s dive in. So. Hi, Mantas. Uh, I know you are, uh, you have a lot of experience in customer value management, customer relationship management, and other, uh, kind of words related to the topic.
[00:01:31] Mantas: Buzzwords.
[00:01:32] Egidijus: Buzzwords. Yeah, many, many, many buzz buzzwords. Could could you do a brief intro of yourself or kind of. Where are you coming from in terms of, like, your professional part?
[00:01:44] Mantas: Uh, yeah. Very shortly. I started my career in digital, uh, back in the days when Forticom was live, actually. Okay. Uh, so that was the very first intro. And, uh, once Forticom was sort of disassembled, I realized at that moment there was very huge buzzword in the market like education on Facebook. So I launched, uh, launched a startup which was running for five years, and we worked with such brands as uh, Cinema Digital, Pearson Education, and so on, then pivoted to work in United Arab Emirates and so on. So, uh, you know, education, all the serious stuff. And then, uh, after it was closed down, I, I realized that, you know, I have a very, let’s say, urge to realize how the dark side of the internet looks like. So I so I joined, uh, online gambling, let’s call it, uh, uh, online gaming and gaming and spend their, uh, almost five years. And there I actually realized the the real power of CRM in general, how how CRM can impact your journal, your revenue. And that market was especially savvy for that. So they’re starting to deep dive into that. And that was fun, you know, to to see how it goes. Uh, then for a year I drifted to hosting industry into the same position, but then realized, you know, when when you have subscribers, a subscription plans lasting for, let’s say four years, something like that. So you can do anything, but your actual result will show off after four years. So I didn’t have so much time there.
[00:03:29] Egidijus: So your contract or contract renewal cycle. Exactly. Yeah. Oh my god. Yeah.
[00:03:35] Mantas: So that’s that was sort of a you do something but you don’t know how it works. Okay. And especially it’s very hard to work in an industry where your product is a part of an ecosystem and you highly depend on the actual value which customer will get not out of your product, but in that case, let’s say from WordPress site and so on. And you know, if, let’s say tipsy Guy walking from the pub on a Friday night realized that yeah, I will do affiliation. He jumps in, buys hosting, starts his WordPress site and suddenly realizes how how much effort it takes to launch a decent WordPress site and generate traffic. At that point, your product becomes irrelevant. So that’s that’s kind of, you know, interesting area. And uh, after that, uh, I joined kilo, uh, as a very first kilo health, as a very first person actually working with a retention. I don’t know how retention manager is a sort of a fake position, I would say, because the retention is the business metric. So more or less, I was always focused into, uh, CRM funnels, CLV and all that stuff. So I spent there almost four years and now I’m jobless. Poor guy hanging around, you know, podcasts and so on.
[00:04:59] Egidijus: So if anybody needs a great, uh, CRM specialist.
[00:05:04] Mantas: Yeah, but not this month. My wife told me that this month I still have to be on vacation.
[00:05:11] Egidijus: So, man, I really wanted to have you in our podcast because I am used to telco terms, you know, and telco processes and telco acquisition, etc. and you come from a digital perspective like digital subscriptions, apps, etc. and the words are the same, you know, customer value management, CRM retention, uh, cross-sell, upsell, onboarding, you know, but I wanted to deep dive into what actually customer lifecycle management looks like in digital subscriptions. Yeah. What does it mean, for example acquisition. What does it mean onboarding. And the app so that we could kind of link it those different worlds.
[00:05:57] Mantas: From the very first glance it looks like, you know, divine Divine Comedy in general. Okay, okay. But, how it looks like it is, uh, it has certain critical stages. In most cases, if you if, let’s say you are dealing with a subscription based product, uh, and it doesn’t have a very high stickiness rate. So it means that your sharp focus must go into the very first week, basically almost into first 24 hours, to avoid the early stage refunds, chargebacks, early stage cancellations, and so on. Because at that point you are, uh, you must re get those customers going, uh, for LTV, but in general, basically to to increase your possible recurring ratio and that’s it, recurring charge ratio. And then you’re focusing into, well, onboarding. Then you must activate the customer to reach that consistent frequency of usage. And then once it is engaged, then you can proceed with let’s say the same upsells, cross-sells and so on. Because in general, we both know that monetization is an outcome of high engagement. Yeah. Yeah. So and then I guess what’s different with the telco, uh, is that the very end of the like of life cycle, there are certain different points because customer can get dormant. So it means he has subscription, but, uh, he doesn’t use the product anymore.
[00:07:36] Egidijus: Okay.
[00:07:36] Mantas: And this is, uh, this kind of customer is really valuable because it is called forgotten subscriptions. You don’t you don’t have to work a lot, you know, to, to retain them. Uh, so this is why sometimes there are certain tips and tricks how to mute and unmute CRM, prior charges and so on. And uh, then customer. Once he’s dormant, he might appear. Uh, obviously you will start to wind back operations, something like that. Then he might appear in a secret stage of a Hail Mary.
[00:08:16] Egidijus: Okay. And what’s that stage?
[00:08:19] Mantas: Uh, that stage is when you realize that to get customer back on track will cost you more than he will generate from, you know, in a longer term. So it’s a we we call.
[00:08:33] Egidijus: So how do you how do you define this number? You know, uh.
[00:08:39] Mantas: In most cases it’s a kind of narrow segment. Uh, but, mostly these ones are first time buyers with a high probability of, let’s say, chargeback or cancellation in general. And then, you know, when you sum up chargeback, possible fines and all that stuff, you realize that, okay, if his probable lifetime value will be like 70 bucks or 80 bucks, something like that, and most likely he will not engage in a recurring, uh, charge. So it is better to leave him alone. So it’s a, let’s say, deep playing with this segmentation. Okay.
[00:09:24] Egidijus: So, uh, now let’s do, uh, one level deeper dive into the same life cycle, because for me, it’s it’s super interesting, you know, uh, because I want to, to map, uh, uh, kind of these two, uh, two different worlds, you know, uh, for example, in telco, we have two terms. So one term is customer acquisition. Another term is onboarding. Uh, usually uh, onboarding term uh is mostly used in prepaid uh subscriptions where here we have like prepaid customers as a subscription. And we have a mobile app and which is also a subscription. Yeah. Uh, but uh, what you mentioned is three terms, like one was the acquisition or conversion. Yeah. Another was onboarding and then customer activation. Could you go a bit deeper and define what does it mean, like converting that customer, like getting that, uh, first value, then onboarding and uh, activating. Okay.
[00:10:26] Mantas: So, so from, from, from the very beginning, we have, uh, let’s say awareness stage. So mostly it’s a mixed marketing blend. When you are acquiring customers through different channels, then we have a stage of conversion. Conversion mostly happens. Either it can happen in an app store. There also plays a huge, uh, part or it can happen in a certain funnel. Mostly it happens in a certain funnel. So your conversion depends on it, how you are, how you are going to convert the customer. Uh, not abandoned checkout there. Also you have a leads conversion part. When drop offs you have to convert through additional channels like email email and so on. Then after conversion you have onboarding. So it means that you have to get customer in a state where he will start to use the product flawlessly. For example, let’s say you convert it into a user of Tinder, right? Or any kind of, uh, dating dating platform if you won’t upload your photo, if you won’t provide a decent bio, if you want to list your interests and so on and so on. Most likely you won’t get matches. So if you won’t get matches, let’s. Even if you won’t allow to track your location, your probability to get a match will decrease sharply. Okay, so in this case, you will fail during activation. When activation is defined, a certain period of time dedicated to, uh, create a habit of app usage. So and habit and habit of an app usage can be defined as uh once customer reaches certain frequency of product usage during certain period of time, and it there is a constant battle between product teams and, uh, you know, uh, marketing teams and sales teams that okay, we we will stay that our customer is onboarded if let’s say he will, I don’t know, make six entries during first three days.
[00:12:47] Mantas: Mhm. But why why may maybe one customer can do that. But for another customer it might be like five entries during one week. So you have to stick to a frequency rather than to an actual, just a total amount. So once customer reached that stage, you can say that, okay, it is an engaged customer and engagement is defined. That customer is using on a certain frequency service or a product. Once again, you cannot define it that okay, he will he will use on a daily basis. No, it doesn’t happen this way. So once again, you’re you are sticking to frequency and recency rather than just a factual usage. And then you, you know, the same dormancy and dormancy is also uh, it can be that hardcore dormancy when you you just lose the customer and he’s completely idle for a certain period of time, or your engagement path can become distorted that he comes once while previously he used your product like three times a week, let’s say, right. So it shows tendency to go into dormancy. So you have to avoid that. Then you start then back to increase that frequency to get into the at least previous stage. If you fail, then you can cross sell, cross sell the customer to other product. Or he might appear in a, let’s say, the same Hail Mary.
[00:14:19] Egidijus: Yeah. Okay. So uh, if I understand correctly. So basically we have the acquisition stage when customer downloads the app, the onboarding is as much as you need to do some work before the app becomes helpful for you.
[00:14:34] Egidijus: And then the activation stage is when you moved, uh, kind of, uh, teach the customer to use the app on a regular basis for that customer.
[00:14:46] Egidijus: Um, okay. So and, uh, what are, let’s say, what are the normal, uh, drop off rates from every stage? Stage? So, uh, just giving you an example in telco and prepaid, if you, uh, have 50% or 60 or 70% of your customers still active after 90 days period, it’s very good. It’s like, uh, majority.
[00:15:14] Mantas: Sorry, sorry. Can you once again tell the number?
[00:15:17] Egidijus: Uh, 60, 70%. It’s very good. Okay, so. So this is kind of, uh. Well, you lose, uh, those 30, 40% because they are, you know, travelers, etc., etc., etc.. Yeah. And, uh, what are the, let’s say, rates in the, uh, from the app perspective?
[00:15:38] Mantas: 15% of acquired customers will remain active after first recurring charge. You are a magician. 15% okay. In most cases you will deal with a 5% something like that.
[00:15:56] Egidijus: And you get second recurring.
[00:16:01] Mantas: After after second recurring. And it is very interesting. Very interesting that if let’s say you open a cohort, that normal, you know, triangle. Yeah. And you see that okay. Let’s imagine three months subscription plan. Right. And you see decreasing usage. Yeah. And decreasing engagement when second recurring charge kicks in, suddenly your engagement rate on a 30 a week 13 sharply goes up.
[00:16:34] Egidijus: Okay.
[00:16:35] Mantas: And then it decreases once again.
[00:16:39] Egidijus: And why does it happen?
[00:16:40] Mantas: Because when someone charges you, you want to get in and see if. Do I really need this?
[00:16:47] Egidijus: Okay.
[00:16:48] Mantas: So they they immediately get it. And it works way better than any kind of push notification or something like that.
[00:16:55] Egidijus: Just ask us, uh, ask to uh, to pay. Yeah.
[00:16:59] Mantas: Yeah, yeah.
[00:17:01] Egidijus: Uh, okay. Five. 5 to 15%. It’s, uh, unimaginably small.
[00:17:10] Mantas: In most cases, uh, I saw, you know, uh, last year I was, uh, in, uh, conference, uh, product Product Marketing Summit in New York and spoke with the guys from the same Amazon, Spotify and so on and so on. So, so what they mentioned. And now I can clearly state that it’s a sort of a marketing market benchmark. Uh, during first two weeks, you will lose at least 60% of your engaged customers.
[00:17:42] Egidijus: During the first two weeks. Yeah. Okay.
[00:17:46] Mantas: If you are measuring the actual, let’s say I call it. How we were calling it, uh. Valuable actions.
[00:18:01] Egidijus: Mhm. Okay.
[00:18:03] Egidijus: What’s the definition of that.
[00:18:05] Mantas: The it’s a very artificial metric. Not not like metric. It’s a event. Uh, we just took all the actions customer can make in an app and stated that valuable ones are the ones which actually make data entry in our data warehouse. So it means any kind of entry I know. Track your wave. Right. Track the distance. You ran something like that. Apart from just casual opening the app or casual browsing and casual scrolling and so on. Because. And there was also a constant battle with product teams. And when they’re like, yeah, but you know, if he’s reading and so on. And what if he’s not reading but searching where to mute your push notifications or he is searching how to unsubscribe. So on. So you cannot measure if there are no click in general.
[00:19:04] Egidijus: So uh, if I understand correctly then uh, kind of CRM work, it’s all about uh, uh, making custom, uh, kind of enabling customers to be active in, in your app and uh, do every, uh, do everybody kind of act the same in your app? You know, it’s like, or is it like, what is the definition of being active in your app?
[00:19:32] Mantas: Uh, you can have sort of a standardized definition that, okay, active customer is the one who makes at least, uh, one data entry, uh, per week. Right? But when you start to measure through different segments, you realize that, okay, you have certain segment who are wildly active. Like, I know they are making entries once one once a day or something like that. Like like runners, right? They track each and every run. Uh, there. Then you have customers who are casual users. Then you have customers who immediately get the habit of a certain thing, and then product isn’t needed for them anymore. So, uh, let’s say that’s a constant game of segmentation.
[00:20:28] Mantas: Not not like in general segmentation, but constant game of audiences because audience is a bit different even thing as uh, as a segment.
[00:20:38] Egidijus: So how how do these segments then play a role in your, uh, customer activation stage? Uh, because when you, you got, uh, acquired those customers, you onboarded them. So do you start segmenting them from the activation stage or post activation stage?
[00:20:56] Mantas: What’s. It depends on an amount of data, let’s say metadata customer brings in. And this is actually a very interesting topic because uh, uh, as I told you previously, at a certain point you realize that you don’t even need to convert all of the customers, let’s say, or convert all of the leads, which you get because part of that leads will inflict you early stage refund or something like that. So but that’s a you know, that’s from black magic side. And if you see that okay, let’s say you have certain segment of customers coming from, uh, Mexico. And then with a kind of similar behavior, uh, you have certain segment coming from United Kingdom. Then you can be sure that guys from Mexico most likely will drift away sooner, or recurring rate will have significant drop offs just because payment differences and payment possibilities. So, uh, there you have to mix technically all the metadata customer brings in together with him. Basically definition of the customer that he is from a certain area, using certain payment method from certain channel and so on and so on. Then you mix up it with behavior and then you get pretty much a clearer view. But from the very beginning, you have to rely in general on, uh, definition per se of the customer. Apart from behavior.
[00:22:32] Egidijus: Uh, what is typically the data available that you have, uh, in the app. So from telco perspective, you know, you have quite a lot of stuff like the location device, the context that that you’re connecting, what you’re browsing, uh, etc. there are quite a lot of information available. Uh, what is on the table for the CRM guys in mobile apps? You know.
[00:22:59] Mantas: I. Frankly or not?
[00:23:06] Egidijus: I think let’s go. Frankly, you know.
[00:23:09] Mantas: Uh, it depends on the platform you use in general. Uh, I saw different platforms like killer. We used, uh, Earthship, uh, for an app engagement management. And then we moved to Optimove. So whatever you can imagine, technically, you define what kind of data points you need, and then it’s a tracking and attribution part where, where it works. Uh, starting from behavior in, let’s say, purchasing funnels. What kind of data they leave there. Then, uh, even you can merge it with, uh, data, which they generate in, uh, advertising funnels. So there are a lot of data points, a lot of and for, for example, if you use platforms who can immediately, uh, create. I call it monitor segments, right. Like they can define possible future value, possible churn and so on. So there with a certain accuracy, you can even get possible future value for the customer, which you acquired just today, and then you can divide them into that. Okay, this this batch will create this amount of value. This this amount of value. These ones will drift away. Uh, prior second charge. So you don’t you don’t even work with them anymore. But also there is one interesting thing that if you have a defined future value, uh, guys, sometimes they like to fool themselves and they immediately jump in to work with the ones who, uh, show tendency to generate the highest future value..
[00:25:08] Mantas: And they leave aside the ones who are in the middle, while actual focus must go into the ones who are in the middle, because you have to increase their future value. Because these ones there, they show already that okay, they will generate more money. So it’s a and when you work with a such segment which is likely to become VIP, it is easy. And it is a pleasing thing because you know, you’re like, oh yeah, I generate this amount and so on.
[00:25:34] Egidijus: Uh, can you get an uplift of people who, who’s already high, uh, lifetime value, you know? Yeah. It’s, uh. Okay. Uh, that’s an, uh, an interesting perspective. Now, how, uh, kind of how confident, uh, are you to work with those, uh, future lifetime value estimates? You know, it’s like, can you put, uh, your, let’s say, uh, bonus on that part? It’s like, uh, if, uh, if you say, oh, I improved, uh, the future value by 20% of my whole base. Is it something that you would, uh, give a bonus for the team for, uh, or uh, or not? Uh.
[00:26:17] Mantas: To answer your question, I’m never confident, actually, because I’ve seen various interesting cases, like with the one product I’ve seen, uh, actually, when you are increasing engagement of customers and increasing engagement basically kills lifetime value.
[00:26:39] Egidijus: Okay. How does that work?
[00:26:41] Mantas: Uh, it’s, uh, what I call disposable product, right? Product is created around a certain habit, around a certain routine. Customer gets in. He has kind of short subscription period, but that subscription period is way more than enough to get that habit. So it means that if I am engaged enough, I go through all of the details, I create that habit for myself. And then recurring charge approaches. Right? So why on earth I need to pay that recurring charge if I already know each and every detail of that certain routine?
[00:27:27] Egidijus: Okay. So, could you give an example that I could put my mental map with, uh.
[00:27:35] Mantas: Okay. Uh, let’s say, uh, you need to, uh, get familiar with a certain diet, right?
[00:27:42] Egidijus: Yeah.
[00:27:43] Mantas: Then for three months, let’s say you are using using product, which gives you dietary, uh, let’s say, advices for each day and gives you, uh, sort of a list of products which you can consume during the week just to know, to gain muscle mass or muscle mass or something like that. During three months you will know word by word that menu.
[00:28:10] Egidijus: Mhm. Yeah. Okay. Gotcha. That’s it. The job is done. You know the customer’s problems.
[00:28:16] Mantas: You are very engaged customer. You are very engaged customer. You are using it daily. But will you need it for like upcoming three months.
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[00:28:42] Egidijus: But, uh, from uh now I have a challenging question. Then from the business perspective, does it make sense to do a good job for the client? Uh, or, uh, sometimes.
[00:28:54] Mantas: Sometimes, no, you have to, uh, as we always spoke, you have to know when to shut up from a CRM perspective, just not to ruin the actual business outcome.
[00:29:06] Egidijus: Um.
[00:29:06] Mantas: Because sometimes, if you will be, as I call it, pampering the customer and you will, you are sort of a giving him a hand. And look, I will show you everything. Everything. You’re losing that angle, Which drives customer to be more proactive on his own rather than, you know, with a constant push. And, you know, we both work in the same, same area. And we know that with a bit more aggressive CRM, you can make customer do anything you want.
[00:29:37] Egidijus: Mhm. Uh, yeah. So now, uh, from the telco perspective, what is really interesting is that, you never stop needing data, you know, or browsing, uh, internet. You know, it’s like you always have this need. And, uh, they’re the key aspect is how do we constantly bring more value to the customers? Yeah. Now, from the apps perspective, especially if it’s related to certain habits, building, etc. and the need is basically temporal. So if you either have to have the next.
[00:30:18] Mantas: It depends. It a lot depends on a certain aspect on which product is built. Let’s say there are certain products which are as it called so-called disposable. They are short term life cycles. And you have to gain you have to squeeze the business value at the very, very beginning of life cycle. But there are products like let’s say, Strava as we spoke, you know, they are based around the.
[00:30:46] Mantas: Community.
[00:30:47] Mantas: And you know, you are running, you are tracking your progress of running. Why not for yourself? You are tracking that progress to show off for community that. Look guys, I managed to run you know marathon during you know just a month of training or something like that. And then if you would remove community aspect product becomes pointless.
[00:31:14] Egidijus: Um.
[00:31:15] Mantas: And there are a lot of different examples when uh, the more data you input into the product, the more you make that, you know valuable entries, the more you stick to it, I would say. So this is why engagement is critical. And, uh, if customer is doing something on a daily basis and leaving, let’s say a footprint there, most likely he will stay with the product And I for me it reminds a lot uh, flicker situation.
[00:31:47] Egidijus: Okay.
[00:31:48] Mantas: You know, I spoke with one one guy. We know him both. And he said he he told me that. Okay, I uploaded a lot of photos into Flickr. I created galleries, I, you know, tagged a certain persons and so on and so on. I put effort and if it will be monetized. I am sort of sure that I will pay that charge just to keep that effort, you know, alive. So the same applies for for all of the digital products, I would say.
[00:32:21] Egidijus: So, uh, am I correct, uh, by drawing a conclusion that customer value management or customer relationship management function for digital products. It’s only useful when the product itself has some continuous value. Otherwise, it’s basically acquisition function.
[00:32:43] Mantas: And yeah. Totally, totally. And, uh, you know, if let’s say if you want product marketers or lifecycle managers to create value, you have to be sure that your product will be relevant for for the customer. I know a year.
[00:33:04] Egidijus: A year that would be your definition for the need of this function.
[00:33:10] Mantas: Yeah. If I if I would have certain digital product and uh, uh, I would start to think about hiring, uh, a customer value manager or even CRM. Crm manager is is needed from the very beginning. But customer value manager. Yeah, I for me, I guess the stepping stone or sort of a KPI would be like if my product is will be relevant for a year.
[00:33:38] Egidijus: Okay. Wow. That’s uh, that’s a very, very interesting definition because my definition was something. Okay, if my app generates X amount of revenue or if my app has a certain amount of subscribers, you know, and this is a totally different point, which is a very new, uh, aspect for me.
[00:33:59] Mantas: It’s a very, very simple explanation. You can generate a lot of, uh, let’s say, uh, initial sales. Right. But what that customer value manager will do if, uh, a lot of customers, you know, generate, let’s say, 10,000 customers per month, and you see that after a month, 8500 just drift away?
[00:34:26] Egidijus: Yeah. It’s like, uh, yeah, maybe it makes sense then, uh, kind of retention initiatives, they, they just become obsolete.
[00:34:35] Mantas: Uh, and uh, retention in general, uh, especially in, in digital product side, these initiatives must be a joint initiatives between, uh, let’s say CVM and product because for you can do whatever you want with your communication files, with the CRM, with promotions and so on and so on. But if product in general doesn’t solve the real long term problem, or let’s say it doesn’t provide the real long term solution or help on your on a daily basis, most likely you won’t retain customers. Mhm. Uh and these and these let’s say short term, uh, uh products. All of them. They are mostly, uh, let’s say emotions driven purchases.
[00:35:32] Egidijus: Okay. That’s very interesting perspective. Uh, from uh, in telco part, uh, I am repeating a mantra that the best retention is epsilon cross-sell meaning for meaning that if family purchase, for example, a converged plan which means that they purchase the same services from for mobile broadband, internet, TV service and mobile services from the same telco, and they pay a single invoice, then, uh, kind of, uh, making these customers switch or churn, it’s pretty much impossible. You have you have to do a really bad job from experience perspective. Uh, now, uh, what is the best retention strategy in, uh, digital? You know.
[00:36:29] Mantas: You mentioned one interesting thing regarding regarding telcos. Uh, telcos, they are solving actual problem communication. You need to have communication with your relatives, with your family, and so on and so on. Uh, now I can tell you example of upsells and cross-sells. Uh, in a very easy explanation. Uh, when guys who start going to gym by the what is the exact time when they buy the highest amount of useless crap which most likely will end up in their, uh, you know, in the wardrobes once they sign a contract with the gym.
[00:37:15] Egidijus: Okay, so you buy new Nike’s.
[00:37:17] Mantas: You buy new Nike’s, you buy any all kind of trackers, beepers, all that stuff because you are like, yeah, I will do now. Now I will, you know, kick in. And suddenly after a week you realize the effort required to reach the goal. So when you take amount of or the same runners, yeah, running is a very popular and so on, but how many people out of that crowd, they will actually reach the good physique or something by running? Mostly we are seeing, you know, recreational runners and they are buying the biggest amount of that useless crap which will end up in a wardrobe while actual runner they start to run and then they buy something needed during the process that okay, now I will try. You know, uh, I know how is it called when they are running through muddy, uh.
[00:38:21] Egidijus: Tracks or these, uh, track? No, it’s like a off road, right?
[00:38:26] Mantas: Yeah. Off road running, different sneakers. So, yeah, it is a very rational decision. The same goes with the most of the applications currently applications for digital services, which are not if let’s say service or application is dedicated for your work, then your attitude towards it is completely different because you know that okay, I will need it. Um, good example Loom. I don’t know if you.
[00:38:56] Egidijus: I don’t use.
[00:38:58] Mantas: Extremely nice. Screencasting. Uh, service. I use it once in a month. Once in two months, something like that. But I’m paying a subscription because I know that I will use it while everything. What is related with entertainment, uh, lifestyle and so on. Like, okay, I will try and will I will see how it goes and that’s it.
[00:39:26] Egidijus: Okay. So, uh, these are kind of, uh, uh, really, uh, different challenges from, from what I see. So if we take the same room and they could somehow upsell you if, uh, uh, they identified the next problem that you have.
[00:39:46] Mantas: Yeah. Easily. Yeah.
[00:39:48] Egidijus: Uh, while, uh, uh, while we’re running, you will not, uh, upsell me if, uh, I stopped running. Yeah, yeah, yeah. Okay.
[00:39:57] Mantas: And most likely, I will upsell you at the just the moment you decide that. Yeah. Okay, I will cry, crash the marathon. At that point, I will upsell you with something you definitely don’t need or won’t need after a week, but afterward, most likely not.
[00:40:16] Egidijus: Okay. Now, if we would move to this, uh, further to that, uh, wind back in, uh, uh, area. So here you use this very interesting term, Hail Mary. Uh, and I don’t use this term in telco, but I wanted to deeply understand what does that mean? And why do you put this term, uh, into retention perspective?
[00:40:50] Mantas: Most of the win back, uh, you know, if, if we speak about purely just digital product. Uh, there you have, uh, sort of a high, high margin. So that’s good. You can go even for like, I don’t know, get back to use the products and you will use it for two months, uh, free of charge or something like that. If product is tied with, uh, certain physical thing, like, let’s say, I know, uh, any kind of device which is related with a, with an application, then you have certain, uh, ceiling of how much you can discount it.
[00:41:35] Mantas: So, so it means that while giving promo price for a customer who you want to get back. You cannot go lower. Mhm. Certain certain price. Because then you you will inflict just minus. Yeah. So if you see that okay I gave him 10%, I gave him 20%. And then you stumble upon that. Okay. I can give him 30% because then it will be a minus. So that’s a Hail Mary situation. If you see that nothing works until you reach that point when I can’t give any more.
[00:42:15] Egidijus: So you just kind of, uh, you’re just bleeding the, uh, revenue and, uh, you’re not getting anything, uh, back. Doesn’t matter how much you will spend. Yeah. Uh, okay. And, uh, so, uh, so, uh, how do you make this cut off? It’s just kind of, uh, estimate this future lifetime value in general.
[00:42:39] Egidijus: Yeah. Okay. Uh, then the other interesting part is, uh, managing renewables. It’s, uh, a very important topic for every subscription. Yeah. Uh, in telco, in prepaid we have like, you know, top up your account and kind of, uh, automating this part, uh, charge from the credit card, uh, etc. and postpaid, we have contracts and we have contract prolongation cycles and so on. How does it work in mobile apps and in digital?
[00:43:17] Mantas: In most cases, you will be on a recurring charge, like 99%. And then it’s a kind of common rule. As I mentioned, you are you are earning money from initial sales.
[00:43:34] Mantas: Like then you have to work to avoid refunds and so on. And then you are getting money from recurring charge.
[00:43:45] Mantas: Uh, in most cases customers, they are they even if they sign for a subscription, either they forget they. And in general when you get an email that okay, we will charge your card.
[00:43:57] Mantas: You get sort. Of angry and you don’t want that. So what is the solution. Not to send emails.
[00:44:05] Egidijus: Don’t send notifications. And then that’s why I say, oh, this, uh, app just charged me. And it’s like, oh my God. Uh, it’s like.
[00:44:14] Mantas: Yeah, you. Have to obviously you have to be compliant. You have to, you know, follow visa rules and all that stuff. But if you’re, let’s say price point is 999 or your pricing your product the same amount as a huge hipster ish Starbucks latte. Then you you are able not to send those notifications if you’re not sending those notifications. So it means that prior recurring charge just shut up a bit. Um.
[00:44:43] Egidijus: Okay.
[00:44:44] Mantas: No, don’t don’t be annoying and so on and then show how nice you are once recurring charge is completed to avoid refund for that recurring charge prior which you are silent.
[00:44:59] Egidijus: Okay. This is.
[00:45:03] Mantas: This is not for public. Yeah, this is not for public.
[00:45:06] Egidijus: It’s like it’s it goes totally opposite how you would manage this in telco. So for example, uh, your uh, like if you are in prepaid your balance is about to expire. Then you send a notification, hey, top up the account. You know we will charge you because you ran out of balance. Then it’s like you send another notification, then you do the top up, then send another. Like your balance is top, top, etc. it’s like all you manage this cycle, making sure that, uh, you know, customer is well informed and here we manage it, uh, slightly differently.
[00:45:46] Mantas: Basically it’s like, but, uh, it’s a extremely common practice in entire applications market.
[00:45:54] Egidijus: So, uh, if I understand correctly, uh, so this is my just pure judgment. Okay. Yeah. It’s, uh, kind of, uh, nothing. It’s based on my, uh, assumption. So, as a lot of, of the digital services they don’t bring, let’s say, uh, don’t solve a very, very important customers need.Uh, then, uh, kind of the value management perspective goes against the customer expectations. Let’s say you manage how much value you can extract from the customer, rather than how much value you are building for the customer to, uh, to make sure that the customer stays forever with you. So these are kind of, uh, uh, slightly different aspects and angles. How do you target that is it is my judgment kind of closer to the reality or not?
[00:46:56] Mantas: Yeah. It is. It is kind of close because when you compare, let’s say telco market versus all the applications and so on. So telco telco market solves the real problem and we have problem. And with all the digital products we have comfort I would say.
[00:47:20] Egidijus: Okay, you can.
[00:47:21] Mantas: Live without that. Without very comfort, comfort things. But you prefer to. So there is this is the biggest difference I would say that. Okay. The same room, right? Uh, I can make a screencast using that, uh, completely awful screen capture possibility, which isn’t built in max, but I use loom because it is. It gives me more comfort and I’m paying for that.
[00:47:49] Egidijus: Okay. Um.
[00:47:52] Egidijus: That’s a really interesting, uh, um, observation. Uh, one more thing, which, uh, I wanted to dive in is what are the communication channels available for the mobile apps? I know push notification obvious implications.
[00:48:11] Mantas: Nap module, in that modules SMS is an extremely powerful SMS channel.
[00:48:18] Egidijus: Let’s dive into SMS channel because in telco it says like yeah SMS is dying you know.
[00:48:24] Mantas: No it’s not. You’re using you basically if you have a certain CRM funnel and you see that Okay, uh, push notification for email works as a fallback for push notification, um, in apps and SMS works as a fallback for email. And you are using that only for, uh, uh, high feature value customers because it’s a pricey channel while, you know, push notifications and email like free of charge, own channel SMS is a bit different. Or let’s say you’re going with a huge promo like Black Friday or something like that. It’s a it’s a brilliant channel.
[00:49:05] Egidijus: Okay. Wow. That’s, uh, that’s very interesting. And what about other, uh, messengers like, I don’t know, WhatsApp, Viber, uh, Facebook Messenger, etc..
[00:49:15] Mantas: Uh, for e-commerce. Yes.
[00:49:19] Egidijus: Okay.
[00:49:19] Mantas: From product side to use the app to use the app to create engagement for another app. It’s a bit of a complex. I know that guys are, you know, they are trying that. They are unlocking that. For me personally, it’s a very complex thing because, you know, I’m a I’m a psycho who cannot stand even one red notification on, on a screen. And if I would see that red notification and then my WhatsApp tells me that, okay, now take a look into that red notification. I would go nuts.
[00:49:58] Egidijus: The I’m also that psycho who cannot uh, it’s like my email is always empty. My, uh. Same Yeah. Yeah, I understand clinical OCD.
[00:50:10] Mantas: It’s called actually. Yeah. Yeah, yeah. I’ve got a diagnosis.
[00:50:14] Egidijus: Okay. Okay. So now to to to to wrap up as you kind of uh, as you put a lot of hope on the Science Channel, uh, to, to wrap up, I always ask, uh, uh, our guests to share some moments from their career. And when you work in CRM or CVM area, uh, you you definitely have some proud moments. Uh, and could you kind of, uh, name what was your proudest moment in, in your career? You know.
[00:50:53] Mantas: That I stayed, that I managed to run away from customer department while I was working in online gaming, when I accidentally send out not existing promo for 20,000 customers.
[00:51:04] Egidijus: Oh my God, I managed to survive.
[00:51:08] Mantas: They were. They were nearly throwing chairs.
[00:51:15] Egidijus: This is very related to my next question. What was your biggest mistake? You know, because everybody sent something.
[00:51:23] Mantas: Yeah. Biggest mistake was actually in non-compliance with, uh, United Kingdom online gambling regulation, which nearly, uh, inflicted a huge fine just for one exclamation mark. So, you know, there were certain. But yeah, we, for example, with the team, we managed to increase, uh, uh, engagement of a one app like twice during three months.
[00:51:49] Egidijus: So that’s twice. That’s a lot.
[00:51:51] Mantas: But that, that’s a lot. But was it sustainable? No. Because once you start to reduce, uh, frequency of communication, once customer, he’s an engaged life cycle stage, suddenly engagement starts to drop off. So it when you’re working, you can write that okay, now go and do this. And customer will be like, yeah, okay, don’t shout at me. But uh, once if you want to create the habit. We even worked with an actual behavioral psychologist. How to form sentences, how to on what frequency you have to communicate and so on and so on. That’s tough game actually.
[00:52:33] Egidijus: Okay.That sounds, uh, very interesting part like, uh, taking real scientists to to change the behavior.
[00:52:41] Mantas: And with one medical app, we actually deep dived into this how to create the habit of certain, uh, diagnosis tracking and to make that habit very consistent. And then even, uh, one of such channels ran as, uh, as a test. And then one more test was applied to realize which will create a bigger behavioral change.
[00:53:13] Egidijus: And and did you manage to reach the result?
[00:53:16] Mantas: Yeah.
[00:53:17] Egidijus: Oh, wow. That’s, uh, super interesting.
[00:53:19] Mantas: And one one girl in my team, he was very into this, so she worked with an actual medical advisors, with the psychologists to just to find out the way how to do this. And, you know, it’s a rewarding, uh, structure of sentences, frequency and so on and so on. So that that was sort of astonishing experiment.
[00:53:39] Egidijus: Wow. Uh, but, uh, I assume, uh, that kind of in investing this amount of effort, time, money. It’s only makes sense if, uh. Yeah, if the product delivers you, uh, value. And, uh, maybe the last question, uh, for you, could you recommend a resource for the fellow, uh, fellows in the CVM CRM area for, to help them grow or.
[00:54:07] Mantas: Um, probably try internet. I don’t know. Atually, I don’t know because, uh, the most, uh, I guess the most experience mostly comes with the actual practice and especially with mistakes. Yeah. And, uh, from resources side, I personally go through various martech providers, blogs and so on because they are investing money, you know, to prepare business cases to show off how, what the dynamics and all that stuff to tell that. Yeah, okay. There is a book written. I didn’t see one. Mhm.
[00:54:47] Egidijus: Okay. Cool. So thank you Mantas. It was very interesting to hear about growing revenue and retention in mobile apps. Uh, topic to dive into and to see how these worlds are very different.
[00:54:58] Mantas: But at the same time solve the same problem.
[00:55:01] Egidijus: Exactly. Thank you.
[00:55:05] Exacaster: CVM stories is produced by Exacaster. We help companies take their customer value management to the next level. To stay updated on our latest episodes, subscribe to the podcast or sign up for an email newsletter at exacaster.com/cvm stories.
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