In today’s episode of The Startup Chat, Steli and Hiten talk about how to stop your customers from churning during COVID-19.
During a crisis like the COVID pandemic, it is to be expected that a lot of your customers will cancel their service with you. However, there are some things you can do to reduce the rate at which your customers cancel.
In this episode, Steli and Hiten talk about why you should always be working hard to improve your retention, what you shouldn’t be doing during this crisis, what to do to stop churn in this crisis and much more.
Time Stamped Show Notes:
00:00 About the topic of today’s episode
00:27 Why this topic was chosen.
01:10 Why churn is to be expected.
01:24 Why you should always be working hard to improve your retention.
01:34 What you shouldn’t be doing during this crisis.
03:00 Why you shouldn’t be lazy about trying to stop churn.
03:21 What to do to stop churn in this crisis.
04:10 The importance of talking to your customers.
05:43 Some practical ideas to help you stop churn.
07:58 How people’s feeling has been changing over time.
3 Key Points:
- We have to expect that some amount of churn is unstoppable.
- You should always be working hard to improve your retention.
- You shouldn’t be lazy about trying to stop churn.
Steli Efti: Hey everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah and today on the Startup Chat we’re going to talk about this idea of having a sense of urgency in your business and instilling it across your business. The definition of this is basically people in the organization, you as an organization, thinking of urgency of execution, urgency as like a sort of either a framework, a mantra, a way of being, that I think is necessary in business and it’s something that I strive towards in my own companies. And there’s usually no better time than like when there’s a pandemic or a crisis to really think through how you can have a greater sense of urgency because you’re kind of forced to at this time. But how can you do that more regularly in your company, in your business, and why is it important? It’s kind of like, I think what we can unpack.
Steli Efti: I love it. I just had to think, what a weird statement that’s totally normal to be like, “There’s no better time to think about urgency than during a pandemic.” And it’s like, “Yeah, of course this is [inaudible 00:01:12].”
Hiten Shah: Sounds about right, right?
Steli Efti: There’s an old business saying that, thy shall move fast during a pandemic. I get it.
Hiten Shah: Yeah. I mean, come on. Okay, go on.
Steli Efti: So I’ll challenge this, because this episode is actually inspired by our last episode around being a wartime CEO, and I think I know how to act with urgency during crisis. I had been told that I’m particularly effective when things are tough and-
Hiten Shah: You know why, right?
Steli Efti: Tell me.
Hiten Shah: You’re steady, that’s why.
Steli Efti: That is true.
Hiten Shah: You’re steady. That’s it. You’re just steady, and when you’re steady and everyone else might not be steady or needs that steadiness, you’re there. That’s just who you are. And I think that that’s different. Different in the sense of like, that would be you being able to be calm under pressure. That would be my read on it.
Steli Efti: Yeah. So, so there’s some truth to that. I think there’s also something to be said that during a crisis, I know how to make decisions under fire and had creed clarity and execute, not freeze when there’s uncertainty, not freeze when the stakes are really high. I know how to kind of keep moving when the stakes are high, making decisions, making adjustments at focusing people and I’m calm. I’m not somebody that panics in a way, that would ever panic in a way that screams at people or loses mind or acts funny. I have high intensity but I’m pretty calm. But the thing I am struggling with is when there isn’t a crisis or a global pandemic or things aren’t, there isn’t a threat of some kind that I can detect. I don’t keep the same level of intensity and I think that we are at close, we’re very good at moving fast, but I’ve seen so many, I know many companies that are much better at cultivating and instilling a sense of urgency. That’s just part of their DNA. Part of their culture is just to move really fast with real intense urgency at all times and we don’t have that. And I wonder and ponder what makes a company able to do that? What makes a leader or founder or CEO good at maintaining intensity during all times? Right. So let’s unpack that a little bit. Let’s try to figure out how do you do that? How do some people and some companies, how do they get good at this stuff? When I would say most companies aren’t.
Hiten Shah: Yeah. It’s something I struggle with. It’s something I’m looking to figure out for myself I think. You don’t want to create an organization, ideally, where everybody feels like they’re on their toes all the time and they have to just move fast just for the sake of moving fast or they have to just be constantly in motion. Some cultures are like that, but that’s not, to me the best way to think about whether a company has sense of urgency or not. For me it’s more like, are they able to react under changing circumstances, which is in a way the definition of a market. Markets are always changing. A business is in a market or a set of markets and the sense of urgency would mean that you’re able to react appropriately as things change and this is why the thing like a pandemic is a massive change and your ability to react can determine what happens to your business during this time. Your ability to react fast, your ability to react calmly. When it comes to sense of urgency outside of that, it’s, to me, this idea that markets are moving. We are one business in a market and are trying to take and get as many customers as we can, as much of that market share as we can and having a sense of urgency to do that and figuring out what that means for you. It doesn’t matter if you’re self funded, doesn’t matter if you believe in what DHH and Jason Fried at Basecamp say, or would you believe someone like Travis from Uber, now CloudKitchens would say. It’s not that. It’s this idea that if you’re in business, you’re in business to make a profit one way or another. You’re in business also to get as many of the right customers for your business as possible, as fast as possible. And even the folks at Basecamp would probably debate it, but they’d have to agree with the fact that if they can’t make money, they can’t build things that people need, they don’t get to exist. And, and so to me it’s about getting as many people as possible to adopt your product, buy your product, do business with you. And it’s, to me it’s a sense of urgency towards that and what is whatever it’s going to take to get that. I almost feel like sales as an area in a company probably has the greatest sense of urgency out of any other part of the company. On average, that would be my opinion based on just the way sales works inside of most companies.
Steli Efti: Yeah. I think that a lot of that has to do with the incentive in place. It has to do with the competitive nature of salespeople, what drives them and what kind of incentives the company puts in place. You know, in sales it’s always kind of a chase to hit the quarter number, to hit the monthly numbers, to hit certain numbers to get certain commissions to hit certain targets. There’s always competition within the team. And so that competitiveness and that clear scoreboard, alright, this is your number and you know what you need to accomplish. That causes a different level of urgency than in other teams where it’s like, this is our goal, but our goals might be much less directly and personally tied both to your finances and to the impact of your performance. Right. We as an entire team might be working on something and we hope it’s going to help with whatever retention or this or that or the other, or improve our branding or, but, but it’s not like if I don’t improve retention by X percent, then in something, my revenue goes down, my income goes down, everybody else sees that number. I could see how much somebody else accomplished. It’s not that directly tied. The impact is not as directly tied to me personally. So it makes a big difference. You know, I wonder if part of the challenge of this for me is how to maintain a level of urgency while maintaining a level of relaxation around it. Because I cannot just to keep them, to use a metaphor, a physical metaphor. To me, urgency comes with intensity, which means tenseness to some degree. Even if I’m calm, I might be more tense and tenseness is a place I can be at and I can stay at for long periods of time, but not indefinitely. No. Inevitably after a sprint of tenseness, I need to relax, or I feel at least the need. And then I see some people where I feel like for 20 years they’ve been running, they’ve been sprinting and just, they never stop and they just had this never ever ending fire that burns with the same level of intensity in them every single day. I just don’t feel that organically and naturally. So I wonder how to create or how to generate the benefits of that without the burnout that it would cause for me, which is why I think I don’t naturally just stay in that mode forever. I don’t know. Have you ever, who is somebody that you know most intimately? So it’s not like Steve jobs, right? We read some books and saw some interviews and heard some rumors and some stories about him. But is there somebody that you know personally that you’re like, “I have one founder or CEO that is a role model in this or that I think is amazing at this.” And if you had to analyze what makes that person good at this, how do they do it?
Hiten Shah: David Cancel from Drift.
Steli Efti: You mentioned that before to me. Why do you think he’s good at that?
Hiten Shah: I think that he is able to appropriately detach from almost anything when it comes to his business and determine what the best possible path in the least amount of time is. And that takes, I think for him, the way he does it is he has a lot of detachment and can detach from almost anything really instantly and take a different view on it. I don’t mean change his mind, I mean take a different view than most people would, but it’s a detachment. He doesn’t feel like he’s tied to the outcome. And I think just like other folks, he probably has a very healthy level of paranoia that helps him do that. So it’s almost like being able to see things almost like with fresh eyes is the skill set. And with fresh eyes with the filter of urgency basically, which I think is something that I don’t know anyone else that can do that but him that I personally know. And I don’t know everyone, so I’m sure there’s people that are very good at that. But from a firsthand standpoint, if I were to have to pick somebody, he’s the only one I can think of right now where I can be like, oh yeah, sense of urgency is there. The closest second would be my brother-in-law Neil. I think he has a very similar way of doing the same thing, and it’s almost like when he’s on something, nothing will get in his way. He will figure it out. He might even do things that you think are crazy in the process of figuring it out. I think they’re crazy.
Steli Efti: Yeah, I agree. I know some things,
Hiten Shah: Yeah. It’s just like, “What’d you do?” But if you understood why he was doing it and what urgency he felt around that thing, you’re like, oh, that makes sense. You know? You would do that if you have a sense of urgency and don’t give a crap about anything else but that sense of urgency and what you want to do. So I think he does it through brute force, like find the thing that I need to do now and then he just goes and does it. I think he’s more on and off on it. Well, he’ll do it when he really feels like he sees something and needs to move. It feels like this happens actually once a month, once every two or three months for him. And you know, I think it used to happen more often earlier in his career, so to speak. With David Cancel, I feel like it’s very steady. It’s like all the time. It almost feels like he has a sense of urgency and the people around him know it too.
Steli Efti: How do you improve on this? Like you said that this is something that’s been on your mind, that you’ve been pondering how to get better at? I have also thought about this a lot, but I don’t have a plan on how to improve it to be completely honest. This is not one of those items that I’m like, this is what I’m going to adjust or try. And maybe you’re not there yet either of like having decided already or having maybe recently changed something. But if you do, I’d die to hear it.
Hiten Shah: I’m still working on this, but I think it has a lot to do with what do you consume your thoughts with and trying to figure that out and figuring out how to make your thoughts more consumed by whatever makes sense for you having a greater sense of urgency. So like in Neil’s case, I think he’s just trying to figure out how to succeed and find the right problem to solve right now that just needs to be solved. But once he picks it, the urgency is uncanny on solving it. It’s just like literally, he’ll go in about 50 different directions at the same time towards that one goal until he finds the right path for him. That’s how he does it. I think David Cancel is a lot more on the paranoid spectrum of that where his lens feels like looking at the world or looking at these things and saying, well, this is a healthy exercise, but it also could be unhealthy for a lot of people. I don’t think it is for him, but I almost feel like he’s constantly asking himself what would kill us? What would kill this business? And then going after that with a sense of urgency, which I think is how he does it. And I’m making it up. I don’t know. I don’t know what goes through these people’s heads. I know both these people pretty well. I know obviously my co-founder Neil, who is my brother-in-law, in a lot of things. He’s my co-founder, but I know him really well. I’ve known him since he was 11 and I was 15. I’m pretty sure I know his method there. David Cancel, I’ve had to compete with him in the past, even had a company called Compete, and these days I’m more of an ally to him. And so yeah, I think that’s, that’s a contrast of approach. But they both are the pinnacle of sense of urgency to me, but they do it in different ways. And I think it’s about what you consume yourself with. Cause both of them get consumed by whatever they’re going after, but they have different ways to get to it.
Steli Efti: It’s so interesting. Have you ever… I’ve never read Only the Paranoid Survive. I have to admit, I’ve not read both books from the legend. High Output Management and Only the Paranoid Survive. What’s his name again?
Hiten Shah: Andy Grove.
Steli Efti: There you go. But I have been thinking about reading Only the Paranoid Survive just because I was curious, it popped up in my head. But anyways, we’ll wrap this episode up here. Obviously we’re both students of this, still trying to figure it out, still trying to get better at this. If anybody’s listening to us and you have an interesting book, an interesting article, an interesting story about somebody you know or something you have done to get better at creating a culture of urgency and really excelling with that, we’d die to hear from you and learn from you. So send us an email. Hnshah@gmail.com, email@example.com. And until next time, stay safe, and we’ll see you very soon.
Hiten Shah: See ya.