So, you’ve just invested into a brand new custom learning management system and membership website. You’ve spent months planning the features and functionality your system will need to give your users everything they need and you’re confident you’re able to stand out in the market. So, why be concerned about churn rates?
According to Recurly, the average monthly churn rate is 6.73% with B2C companies experiencing more churn than B2B: 6.22% for B2B, and 8.11% for B2C. In addition to this, the majority of users leave voluntarily, typically after a bad experience or lack of communication and support (Zendesk).
GoCardless notes that companies with a high churn rate face a number of key problems:
Your system needs to stick.
By making your service indepisensible you’ll be able to reduce your churn rate and retain some of those users who might have left voluntarily. To do this you need a combination of great user experience and functionality that allows your users to have some sense of ownership about the experience and the content.
Kaine Shutler, Managing Director at Plume says: “When we’re in the Discovery phase we’re constantly thinking, ‘how can we improve customer retention by making the system essential to our users?’”
“It’s about ensuring we have a clean layout with an intuitive interface focused on our target user, alongside features and functionality that keeps users coming back. It’s more than just time spent on the platform, it’s about making the platform integral to the end-users entire learning experience.”
Take Spotify for example. If you’ve ever used the platform and created your own playlists we’ve no doubt you’ve relished in the ability to customise your own personal experience. If you’re anything like the team here at Plume, you’ve probably spent countless hours collating your collections and vetting other users’ playlists… so imagine being posed with the possibility of migrating away.
Firstly we’d ask you: why would you want to move away? Before being consumed by the unrelenting dread of what migrating away would actually entail if we tried to do that ourselves.
Putting the logistics aside, Spoitfy does an incredible job of becoming so integral that moving away from the platform and recreating our playlists/collection elsewhere becomes extremely undesirable.
Spotify sticks. That personalisation, the time and effort we invest into the platform is a huge contributing factor to limiting their churn rates.
When it comes to learning management systems and membership websites there’s not that much information out there of how you can reduce your churn rates. Mostly the content out there is all about the marketing and sales strategies you can employ after your system is built; such as notifications, email marketing campaigns and sales funnels. Marketing strategies are a great addition to an overall customer retention strategy, but they aren’t baked into the system in the same way features and functionality are.
Looking over some of our most recent builds across learning management systems and membership sites we’ve created a list of some of our most effective churn reducing features.
We’ve touched on this with our example of Spotify, but it’s a nifty feature that translates well into the LMS and membership website space.
With SchoolExams we built a playlist feature that allowed their users to save past paper questions that they could review, answer and get feedback on later. Taking this one step further, we even allowed each playlist of questions to be transformed into a custom past paper that could be printed out and practised under exam conditions.
Absolute Dogs also have a variation on custom playlists. As part of the implementation of a Netflix-style video library (featuring autoplay) we wanted Absolute Dogs’ users to be able to create their own playlists of doggy training videos for easy access on the go. These playlists could then be shared with the community.
Of course, leaving SchoolExams or Absolute Dogs means losing your curated playlists which creates an incredibly sticky service people won’t want to leave behind.
Shock. Horror. A digital agency proposing note-taking digitally *faints*
Seriously though, as a digital training provider in the legal sector, PCA Law’s users have been extremely receptive to being able to take their study notes in the system alongside their lessons. They can easily save and access their notes - all perfectly ordered alongside each lesson. The system automatically files their notes, bringing them up when they access a lesson to make finding and referencing back to them so much easier.
Now imagine trying to migrate away? Not only will you lose your notes, but you’ll lose the context that made the notes useful in the first place.
*For the record we are fans of notepads and whiteboards - we might be a digital agency but we love a bit of old fashion pen and paper.
We’re pretty proud of our Facebook-style Groups plugin for LearnDash (we’ve recreated this for other platforms too) as it gives our clients and their users all of the expected functionality of a Facebook Group without all the Facebooky distractions.
When you create an authentic community within your platform you’re offering something exclusive. What’s a membership-based platform without that community element? Digitally, it really can’t be replicated to the same extent elsewhere.
We’re seeing lots of clients taking advantage of this by creating communities exclusive to particular cohorts or intakes, communities giving users access to thought-leaders and experts, and even communities dedicated to mentoring.
Career Masterclass certainly stands out to us as a client of ours that have taken full advantage of the communities functionality and monetized it by making it part of their value proposition alongside their e-learning.
When you can provide mentoring or tutoring as part of your e-learning experience you’ll be standing out in the market. Imagine not only taking a course developed by a market-leading expert but also getting to pick their brains and share ideas with other enrollees - ain’t that the dream?! For Career Masterclass’ users - it’s a reality.
If you leave, not only do you lose the valuable educational content and conversations, but you lose the connections too.
Clients in the B2B space have a much greater challenge when it comes to reducing churn. Inherently deals in the B2B space are worth so much more as you’re selling to a client who has 100, 1000 or maybe even more users. So when you lose a client and it’s users, your revenue can really take a hit.
Here’s where you need to ensure your platform is absolutely indispensable. Your system needs to be all singing, all dancing alongside having great user experience and customer support.
The features and functionality you might want to bake in here aren’t necessarily applicable to B2C platforms, although we highly recommend you consider the B2C functionality suggested above for your B2B learning management system or membership website.
Whitelabelling is a term given to a product or platform that can be customised to any brand. When we talk about whitelabelling in the LMS space this usually means:
When you’re able to give your clients their own version of your platform, you’ll be offering them the value of a custom-built system without the hassle of them building it themselves. Yes, you’ll offer them the flexibility to migrate away, but your business-brain knows that you don’t really want them to do that once they’ve invested time, energy and money into making it their own.
This one seems a little cheeky - and no, it’s not about making the process of adding content a pain. Rather, this is playing into the investment the client is making into ‘their’ system supplied through you. When the client makes an investment of money and time, it makes migrating away from your system even more difficult. It’s why SaaS products have such long trial periods, once you spend 90 days faffing about with it, it’s very hard to justify the time you invested in it if you decide to leave.
Put yourself in the shoes of the client: You’ve spent hours speaking to providers, exploring different systems and content libraries. The board gives you the OK and finance sign off the deal. Let’s say you put down about £10k on a system and 100 hours uploading your users and adding unique content to the library; you’re not going to want to shop around for other options just to spend that same money again and undo all of your hard work after you just uploaded 100 slides worth of content just to have your own system. Chances are, if you run into an issue, you’ll be reliant on your current supplier to fix the issue or you’ll extend the functionality on the system you've already invested in. It’s easy to make systems stick when you invest so much time into them.
We can’t speak for everyone. But migrating away from a custom system is a pretty undesirable outcome on so many levels...so let them upload their own content into the system.
Further to the suggestion above, adding integrations and extending the functionality of their instance of your system will only make them want to stay.
We’re not going to go into all the details of why integrations make everything better; we’ve got a blog for that here. At a glance, some typical integrations include:
By integrating with their existing systems you’ll demonstrate how helpful and invaluable your system is. When you can boast about automating tedious manual processes and ensure your client’s data is updated simultaneously through your LMS and into their other systems you’ll only be increasing your value proposition.
As we build custom systems that can scale and grow with ease, we can build new functionality and allow you to deploy this to your clients’ sites. If you’re able to offer them all the freedom of a custom system without the hassle of reaching out to developers, planning and investing the £30k+ you’ve already spent on a perfectly robust system they can use, why would they go anywhere else?
When you build in features and functionalities into your system that will make your system stick, it’s going to make your system indispensable, reducing churn and reliance on the system you’re providing your clients with. Making your system stick is more than just engagement and marketing strategies, so consider this during the planning stage; it’s what we do with every client during Discovery.
