Growth June 12, 2020

2 customers churned in the same week and now I feel like the world is ending 😫

Jon Yongfook @yongfook

I've been posting my Bannerbear milestones to the IH product page and so far it's been mostly positive news, especially recently hitting $1000 MRR:
https://www.indiehackers.com/product/mojosaas

Just days after I reached that milestone however, I experienced my first churn. And not just one customer, but two!

I'm in the process of finding out why and getting some feedback, also I'll probably add a little feedback form after the cancelation step so users can offer feedback directly after they cancel.

I know that churn is a fact of doing business in the SaaS world. It's going to happen. You just need to ensure your growth rate is that much higher than your churn rate... I know all the ways to rationalise this to soften the blow... but it still sucks.

It triggers an interesting cocktail of emotions. I think since as an indiehacker your life is so intertwined with your business, it feels much more like a personal rejection than it should. It almost feels like you've just been dumped by your girlfriend / boyfriend! You start thinking... why am I not good enough? Can I get them back?! Will I ever find love again???

Ok I'm going to stop being melodramatic. I just want to try and paint a balanced picture - although I've been making progress with my product, there are inevitably stumbling blocks along the way and you just have to deal with it and move forward!

  1. 10

    The first churn is always the hardest (kind of like your first million?). I remember my largest customer churned on me a few months after launch–I'll never forget how I felt but oh how insignificant that feels now. Unless it's something within your control, it's just the cost of doing business.

  2. 7

    Hey Jon!
    I agree churn sucks to deal with, especially as a solo-founder and when it suddenly spikes. Even though we "know" it is inevitable, knowing is one thing and experiencing it is another.

    The video that has helped me the most with this and other emotional issues related to running a business is this MicroConf talk by Sherry Walling, https://www.youtube.com/watch?v=M0YVJeighyQ.

    I can't do it justice so I highly recommend checking it out, but she talks about strategies for separating the Company's needs and "emotions" from the Founder's needs and emotions. I've watched a ton of MicroConf talks, YC videos, and others, none have impacted me as much as this one.

    Hope that helps! And I'm sure that in no time 2 customers churning will be just a minor blip for Bannerbear :)

    1. 2

      This talk resonates with me so much! Thanks for sharing!

  3. 3

    Churn hurts, but it sounds like you've done well to get this far without having any churn yet. You also don't know why yet, a lot of businesses are needing to cut costs right now. They might come back when things get better.

  4. 2

    It’s the same thing major stars experience on social media. The compliments feel good but the high is short lived. The insults or in your case churn are few and far between but hurt so much more and linger in your mind.

    Keep your head up. This experience is great. It will show you to be strong. Don’t let it steer you from your focus. Keep going your doing great.

  5. 2

    It does suck, I know the feeling.

    I usually go on an emotional roller coaster on churns or negative feedback. It hit me pretty hard.

    It is okay to feel this way and the hardest is to just turn it to something positive, something that pushes you forward.

    I still feel this way, but am trying to say "This customer was maybe just not the right fit for X right now" and "I will just make X better for next customer!"

    That usually helps me move forward.

  6. 2

    You've specifically got a product that's pretty cool and unique, but I don't quite know what to do with it. People sign up for products all the time they think are interesting but don't know what to do with.

    I would think they would stick to your free plan though, since it doesn't appear to have a time window. Many, many enterprise customers will actually pay for a month or two of service though to extend their trial without activating.

    --

    Think through your user journey. What do you consider your customer activation metric? One design? Two designs? Successful image generation via API? How many and how frequently?

    Once you figure that out, you'll be able to clarify: are these churned customers, or non-boarders?

    It's very rare to get churn so early in your customer lifecycle. It's usually much more likely that they failed to understand something about the product (fixable!), or they failed to properly activate (also fixable).

    1. 1

      Hey I appreciate the feedback / advice.

      I may be reading something wrong, but there's a contradiction in here that I don't quite understand.

      You seem aware that I don't have a time limit on my trial, it's a usage limit. So by definition if someone hits the limit and wants to keep using it, they have to upgrade to a paid plan.

      So when you say "are these churned customers, or non-boarders?" - would anyone who has reached this limit really count as a "non-boarder"? Clearly it would mean they have used the product quite thoroughly by the time they upgrade.

      I appreciate you taking the time to reply though!

      1. 2

        I left that in because I would say 5%-7% of my customers paid for a small quantity of product before their free trial was over, and before they had really successfully onboarded into the product.

        If you dig into your userbase and everyone exhausts their 100 free images before upgrading you can say they've activated to some extent.

        If I were really trying to dig deep into churn I would be thinking about each level of activation, from your users who create a single project to completion, to your power users, and get really in the weeds as to what happens there.

        You have a few different tools that work together, seems like a lot of moving parts to go from onboarding -> user -> power user.

        There's a simple design tool (maybe some users have trouble designing templates), a no-code tool, and a potential code integration.

        Lots of things to activate on.

        1. 1

          I left that in because I would say 5%-7% of my customers paid for a small quantity of product before their free trial was over, and before they had really successfully onboarded into the product.

          Interesting - it hadn't occured to me that people would upgrade without maxing out their trial, but I suppose they do exist!

          Yeah I'm aware there's a lot of moving parts. It's probably a good logical next step for me to start measuring the progress down the funnel (including turning a paying customer into a power user) which I currently am not doing.

          1. 2

            You can do this using a qualitative approach at this scale. For 34 paying customers I'd do everything I could to understand each day in their customer lifecycle, paying attention to things like when they first perform actions like inviting a designer, creating a project from a template they designed themselves, etc.

            Good luck, and nice work so far!

  7. 1

    I just heard about Bannerbear from a client this week, they love using your app!

  8. 1

    Keep going! @yongfook

  9. 1

    Bad news: more customers will churn.
    Good news: you have a good product and you'll gain many more customers, then learn from them to optimize retention.

    Embrace the suck, you will forget about this event in a few months!

    Happy to be a Bannerbear's user!

  10. 1

    Keep the fight on...! 👊

  11. 1

    My main question regarding churn was always, how am I doing compared to other businesses in retaining my customets? Just yesterday I received this very interesting newsletter regarding churn and retention benchmarks, which helped me to put retention into perspective:
    https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29

  12. 1

    You care about the product and you worked hard to make it. It's bound to hurt a little. Customer feedback is probably key, the most value there is finding out the "why".

  13. 1

    Thanks for sharing this side.

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