00:00:0022,265,736 total users on Skool as of today and to get that big we had to know how to retain users
00:00:11and one of the biggest places we learned this from is the communities on the platform itself
00:00:15and so in this video I'm going to break down what we've learned so far that you can use to retain
00:00:20your customers longer in any recurring revenue business and this is a special shout out to Skool
00:00:25and Sam I'm taking all the learnings that he put into Skool News and I'm trying to make them public
00:00:29because I think they're awesome so number one is think of churn like a leaky bug did and then
00:00:34diagnose what's actually happening so your MRR meaning your monthly recurring revenue grows when
00:00:39new members are greater than churn members so for example if you sell five people and you lose four
00:00:46your MRR will grow if you sell five new members and five churn your growth will be flat you begin
00:00:53declining when you have fewer new people than people who leave and so tactically what you want to do is
00:00:59track those two numbers on a monthly basis joins versus cancels and then force yourself to label
00:01:04the businesses growing flat or declining based on that that's thing one thing two you want to use
00:01:11retention benchmarks and so this way you can know if you're good and so I'll just give you the Skool
00:01:16platform averages now to be clear this isn't churn for like an insurance premium or an alarm system
00:01:23but if you sell anything that is I would say a traditional you know a consumer service that's not
00:01:28like a home service but just like a weight loss service or anything that you'd help somebody
00:01:32or remote service anything that's like an online service these metrics will probably be much more
00:01:38correlated to what you're at and so the platform average across Skool is 80% monthly retention so
00:01:44said differently is 20% churn so 80% say 20% that's the platform average now the best groups have less
00:01:51than 10% churn aka 90% retention month over month the not good groups have less than 70% retention
00:01:58aka 30% or higher and so tactically if less than seven out of ten people want to stay on a monthly
00:02:03basis you probably need to work on your retention more than anything else it'll be the highest ROI
00:02:08lever now to put this in context if you take your turn from 20% to 10% or said differently you take
00:02:14your retention from 80 to 90 you didn't just get a 10 or 12 boost you got a double in the LTV per
00:02:22customer meaning customers stay twice as long when you make that change and so one of the big things
00:02:26that people get confused about these small numbers is that the smaller the number the bigger the
00:02:30change by percentages when you make these small tweaks and to be clear this is all monthly in
00:02:36comparison to others not in comparison to have like a sellable business or anything like that
00:02:41real quick i'm going to show you the exact 10 stage roadmap from zero to 100 million plus that less than
00:02:47one percent of companies finish i've now done multiple times and so i can say with a lot of
00:02:50confidence that these are the stages as headcount increases that you need to get through and i broke
00:02:56each of these down by eight different functions of the business what the constraint feels like like
00:03:00what are the symptoms of it when you're going through it and then what steps we actually took
00:03:03to graduate and we've done this across software physical products service businesses brick and
00:03:09mortar all of this and it works and it's my gift to you it's absolutely free and so the link's in
00:03:14the description but you just go acquisition.com roadmap just enter your info and it'll spit it
00:03:18right back to you all free so number three is the biggest rule is that churn drops dramatically with
00:03:25time all right so this is like this is a very cool inference that that sam shared with me that i
00:03:30thought was really really interesting so it it's very easy to think okay my average churn is call
00:03:36it ten percent a month but when you actually look at cohorts of churn meaning people who are at their
00:03:41sixth month versus people are the second month versus third month etc the averages across platform
00:03:46are also very different by month and so for example month one to three are the highest churn so they're
00:03:5320 plus during these months now if you keep someone 90 days which seems to be the first kind of big
00:03:58churn drop-off point it drops to around 10 or less and you're like huh that's kind of interesting
00:04:03basically drops in half if you get people to day 90 now by month six so another 90 days after that
00:04:10churn gets extremely low so it goes from like 10 percent to two percent all right so a 5x decrease
00:04:16or a 5x increase in ltv depending on how you want to see it and so the implications of this are huge
00:04:22because a lot of people will obsess myself included about like how do i get my my monthly turn down you
00:04:26know over and over again an easier way to think about decreasing your turn is not how do i make
00:04:30this number go down but how do i get someone to stay past day 90 how do i get these people to stay
00:04:34past month six because those become much more tactical in terms of like this is what i can do
00:04:39now to be clear if your community your recurring revenue thing is less than 90 days old then your
00:04:42turn is always going to be inflated because you haven't even gotten those customers who've made
00:04:46it past that point that would over time decrease your monthly turn if it's less than six months old
00:04:51it's the same thing just a little bit less and so to be clear don't overhaul your entire business
00:04:56because your month one churn sucks that's normal for it to be higher than the other months unless
00:05:02basically everyone's leaving in which case yes you should go fix that all right so that's number three
00:05:06and i think that one's like really really big and i want to like hit on that like i would say if you
00:05:11had to focus on three tactics have a very specific strategy for getting people past the first month
00:05:16because that's the biggest month of churn so that's going to come from activation onboarding expectation
00:05:21setting selling the right promises on the front end showing up every day making sure that you're
00:05:27providing content in that in that environment day 90 is probably have to deliver some sort of
00:05:32outcome some sort of change in behavior for them month six it's usually them connecting with other
00:05:37people within that community all right and so this is kind of as these things develop now number four
00:05:42ask people why they cancelled and then look for the patterns so i would say earlier in my career
00:05:47i would just like when someone says oh it cost you much i would just ignore them i'd be like ah they
00:05:51just don't understand the value but over time i've learned to appreciate that like i'll tell
00:05:54you a cool little thing sam has the head of customer support sits right next to him in the
00:06:02whole office and the reason for that is because he wanted a very tight feedback loop between the
00:06:06problems that customers are experiencing the reasons they're canceling and the things that are getting
00:06:10built and that's why school is such a strong platform is so good and so tactically message
00:06:16people who are canceling and say hey why are you canceling and don't knee-jerk you know on one
00:06:20response to be clear i'll be like oh this one person canceled like look for patterns collect
00:06:23enough feedback to see them and so tactically you can create a simple dm script and then you can tag
00:06:30the reason that people have in an excel sheet so it could be like price overwhelmed not using it's
00:06:35missing a feature it's not what i expected and you can look at that and for every 20 cancels or so
00:06:40review the top one or two reasons and then fix those really tactical advice please do this number
00:06:46five ask your best members why they stayed so we're asking the bad people why they leave we're
00:06:51asking the good people why they stay and then do more of that so identify the longest tenured people
00:06:56aka the most engaged members and then ask them like what made you stay what's the number one value
00:07:01that you get here and so then tactically whatever shows up repeatedly becomes your kind of retention
00:07:06engine and so everything else after that is really optional i want to emphasize this point
00:07:11if you can only do one thing that gets people to stay why would you do five and this is a lesson
00:07:16that took me too long to learn because oftentimes we believe that in order to fix things we need to
00:07:21fix them through addition when oftentimes we need to fix them through subtraction and amelioration
00:07:25aka making it better rather than adding more stuff because if you were to simply fulfill the promise
00:07:31that you originally made they probably stay so if you think about how do i improve the quality of a
00:07:34product you make a promise and then you remove all friction associated with getting that thing and so
00:07:40the businesses the products and the services that win are the ones that simply make all the things
00:07:44that suck about achieving the good thing go away school fundamentally helps people get started
00:07:49online and so all we've done is try to optimize to make it as easy as humanly possible and that
00:07:54doesn't mean adding more features it means making everything in the background just vanish so it just
00:07:59works which leads me to number six price objections you don't want to guess you want a tier based on
00:08:05evidence so at school so us eating our own dog food we had a bunch of people canceling saying
00:08:10it's too expensive and so what we did is we created a lower tier while still keeping the higher tier
00:08:16available with some additional uh you know metrics and you know additional admins things that you know
00:08:21unique urls you know no no sidebars of competitor groups kind of advertising the same area we kept
00:08:27that for the high level people but the people who are lower level who are just kind of hobbyists
00:08:31are just getting started we created a 11 times cheaper tier from 99 to nine dollars right and so
00:08:38this was important for school because a lot of hobby groups are people getting started and maybe
00:08:45they're not necessarily making a ton of money they got to figure out a few months and the difference
00:08:48between a hundred dollars a month and you know nine dollars a month is pretty huge and so that allowed
00:08:53the people who were like still figuring it out to still be able to use the tool and stay and then
00:08:57ultimately be successful longer term now tactically if your ideal customers this is a very important
00:09:03point if your ideal customers say the price is the issue then you can add a lower tier or a standard
00:09:10plan if non-ideal people say it's too expensive just ignore it that means that the price is actually
00:09:15acting as a good filter right like if you if you're like i want a community for a million dollar plus
00:09:19business owners and people who are not a million dollars plus say this is expensive then it's like
00:09:23great bingo it's working all right um same thing with whoever your avatar is which leads to number
00:09:29seven overwhelm so let's talk about this the number one reason people churn outside of price
00:09:36is overwhelmed it is the churn driver and this is why doing less can often retain more and so the
00:09:42core idea behind this is like i don't have the time i can't keep up i can't utilize it and usually just
00:09:48means there's too much stuff so i want to break down a real world example of this outside of school
00:09:52that applied the same concept so planet fitness uh is a ten dollar a month you know gym subscription
00:09:58they have some upsells whatever and they were able to enter the market in a place that there's
00:10:02already tons of gyms there's only tons of health clubs etc but what they realized when they surveyed
00:10:05customers was that people joined health clubs they were paying 59 a month or whatever and they had
00:10:09basketball courts and racquet courts and cardio and pool and all this other stuff right and when
00:10:15they surveyed people the vast majority of people just used the cardio equipment and a little bit
00:10:20of weights and so they were like wait so these have these massively built out things but people
00:10:24are only using 10 or 15 of the facility and so what they did they said what if we just took out
00:10:28that 10 or 15 put it over here and then charged way less for it and by doing that they had a superior
00:10:33value proposition now here's what gets really interesting when you have five things that you
00:10:39pay for but you only use one you feel like you're only getting 20 of the value if for the same price
00:10:46you just offer that one thing people feel like they're getting a hundred percent of the value
00:10:50so someone is more likely to churn in this scenario because you added more stuff because now they feel
00:10:55like they're using not enough of it wild so us as business owners a lot of times we're thinking oh
00:11:00i'm gonna i'm gonna add this you know i'm gonna add all this extra stuff but the reality is all we did
00:11:04is we gave them more reason to cancel because they never used it and so we had a community on school
00:11:08where they found out about this they deleted content that they had and they took their turn
00:11:13from 30 percent month over month to five they had a 6x increase in ltv by simply having fewer things
00:11:20all right a simple version of this is and i'll give you a tactical uh i'll give you a couple tactics
00:11:26for this so you can make a little form and just simply ask your customers hey if i were to delete
00:11:31everything what one thing would you fight for and on the inverse if i were to keep everything and
00:11:36just remove only one feature which one thing would you not mind seeing go and then if you chart those
00:11:42on a graph what you'll find out is what the number one and number two most valuable things are often
00:11:46times it's really outsized and most of the time you just need to do those things and basically forget
00:11:51about everything else because one of the big things we have to remember is that people who are using
00:11:57your services are not full-time using your stuff they have lives and so we want to think about value
00:12:03per second not seconds of value and in the digital world that might mean just one post one call
00:12:08recording or just one single action that you need to take that's valuable for them that's it if
00:12:13someone just gets that every week from you they're in which leads to number eight design for the
00:12:18extremes have a busy path like the person who's just kind of like a dabbler dipping their toe in
00:12:23the water and also have kind of like the power user depth and so a busy member should be able to
00:12:29get value from a distance they should be able to keep up and not feel like they're left behind
00:12:34on the other hand a hardcore person should be able to go deep all day and so tactically make an
00:12:41explicit start here slash weekly cadence flow for the busy people while leaving optional kind of like
00:12:47side quests in depth for the kind of like heavy users or heavy yeah the heavy users nine move the
00:12:53ladder closer to the front so front load the thing that people love so we use snakes and ladders as a
00:13:01concept so you want to remove the snakes aka the friction the confusion the overwhelm and if there's
00:13:06a long ladder the thing that makes people stick put it in the onboarding so tactically if the
00:13:10calls are the stickiest thing or this specific service or this specific implementation or
00:13:15onboarding or activation the best call replay whatever it is the pin post put that sticky
00:13:21sticky thing up front and you want to pin this is now a school specific thing but it still works with
00:13:26any onboarding is you want to pin the fast one up front so new members hit that value ideally with
00:13:31in the first 24 hours and this works for any recurring business whether you're teaching someone
00:13:34how to sell teaching more work leads teaching them how to pickle pickle jars whatever like as long as
00:13:39you have a way to get people a win fast they will like you more ten show up daily and care so this
00:13:47is something we saw across all communities is that the owners who showed up in the community on a
00:13:52daily basis had significantly higher retention than the people who didn't big surprise now we've
00:13:59basically never seen this fail and so if a member feels like the owner isn't active or doesn't care
00:14:04they leave and so a tactile minimum would just be like put an alarm make it part of your daily
00:14:08routine and so on a small level you can clear notifications dms you know uh report whatever
00:14:14content or you know deal with content that people might have reported now this is talking about
00:14:18school but you can apply this to your own business which is like what am i doing every day to show up
00:14:22for my customers and can i make that a repeated action that i do that's high value and high
00:14:26leverage this also means like read the complaints every morning of customers who are dealing with
00:14:31issues because if you if you want to hide your head in the sand uh you will be well i guess your
00:14:37head will be in the sand that will suck because then you look in your ears and your nose and it's
00:14:40like you know how you're gonna live right so that's a tough life and so so you know encourage the good
00:14:46behavior that you that you have the people who follow what you want people leave nice reviews
00:14:51people leave nice testimonials you want to tell people and say good job on the other hand delete
00:14:56bad stuff and delete bad people i cannot tell you how powerful deleting cancer is like if they do it
00:15:02in your body you should do it in your community or membership which leads me to number 11 which is a
00:15:08weekly call and a recording and so live voice slash face deepens relationships and so recordings kind
00:15:15of just like let busy people keep up there's very often that there's like weekly podcasts that have
00:15:19tremendous retention it's just like it's just enough like and think about tv shows like obviously
00:15:24netflix created the binge culture but the vast majority of shows are like once a week it's enough
00:15:28that people can keep up with it and too many of these kind of like extra add-ons people kind of
00:15:34revert to that one thing and you want to make sure that the one thing they're consuming is the best
00:15:38one so if you're unsure what kind of communication cadence to stick with just default to like one big
00:15:43thing per week uh and then like a best of post very simple so it could be like weekly call and
00:15:49weekly post that's all you have to do very very simple within a community structure let's go number
00:15:5412 so you want to add an annual plan with a discount so the reason this works is that annual
00:16:00always has lower churn than monthly and it's because you only need to decide one time rather
00:16:04than 12 and so annual buyers churn less and even beyond the they can't cancel effect right so like
00:16:11because they can't cancel because they already paid is one element of that but the other element
00:16:15is just that like typically those people are also more committed they also got a lower rate
00:16:19so there's a lot of it they're also more qualified because they paid more upfront so there's a lot of
00:16:22and and so having that is valuable now a common practice here is 16 or 17 percent which you
00:16:28usually buy 10 get two all right so if you're not doing this within whatever service you sell
00:16:34have an annual component that you should implement like today like right now first thing you do after
00:16:38this announce it and expect a meaningful chunk of people to take it and what that does is it
00:16:42stabilizes retention 13 you want to build belonging via 101 relationships and 10 true regulars now this
00:16:49isn't a digital community but from a a business that has any kind of uh community that's involved
00:16:56real in person etc fostering one-on-one relationship which is thinking like what are
00:17:00the unique aspects of these people who are coming in and can i pair them with other people who are
00:17:04like them because if people find i think there's um leyla shared this out with me this is on the
00:17:09employee side but it totally transfers which is if an employee has a friend that they're friends with
00:17:14outside of work they stay five times longer at their job think about how wild that is just one
00:17:20friend outside of work or one person that they're like really good friends with and so like hack of
00:17:26hacks like get them to make one real friend now that's easier said than done but the nice thing
00:17:31that you should have hopefully everyone should have one thing in common which is that they're all
00:17:35uh patrons of your business so they always have that interest some way in common and so uh the
00:17:41fastest way to do this is also introduce some of the true regulars to the new members and i used to
00:17:45do this at my gyms like otherwise everyone just feels brand new they feel like in-group out-group
00:17:49like you don't want to have people feel like they're walking in on someone else's conversation
00:17:52so if somebody's new to a party right and you're holding a party and someone walks in what do you do
00:17:56oh this is john john meet tina meet you know meet jesse meet me trish uh you know john's really good
00:18:02x y and z trish is great john blah blah blah right and so it's just like just help them build rapport
00:18:06which building rapport just comes down to like what things do they have overlap over it that's all it
00:18:10is all right um but within the digital community so going back down to school you can anchor engagement
00:18:17in community with 10 regulars that's it you just need 10 regulars the the tactical piece of this
00:18:22is that identify the top 10 people these are your model citizens the best customers your best avatars
00:18:28dm them figure out their goals spotlight them meaning give them public kudos invite them to
00:18:33contribute not just like watch them do it and if you can again publicly recognize in any way possible
00:18:38it further reinforces the behavior and you want to introduce the new people to them aka matchmaking
00:18:44sometimes tactics can be very overwhelming uh but sometimes they're exactly what you need
00:18:48uh if you have a recurring revenue business don't expect to implement all the stuff at once
00:18:53just take one thing off the list do it add it in consistently and then once you get consistent
00:18:57with that one add another one off the list and so conquering churn or you know trying to have
00:19:02an alliteration for retention like mastering retention but i need an r something retention
00:19:08uh remastering retention um just comes down to doing a hundred small things consistently over a
00:19:16very long period of time and so most people think that growth looks like this when in fact growth
00:19:22really just looks like a flat retention curve and then what happens is it just keeps growing and so
00:19:26So I hope this helps.
00:19:27Keep crushing it.