Building Your Company's Retention Strategy & Measurement with MongoDB

While we're waiting for people to join, I would love it if everyone can just post in the chat and just share, like, tell me a little bit about where you're from, like where you're located. Awesome. Feels like it's pretty late in India. I see someone from India.

We have global representation here today, which is amazing. All right, I'm going to kick it off and continue to let people in while we're doing that. So welcome everyone. Welcome to SaaStr Scale. I'm Lindsay Lagan. I'm part of the team SaaStr. Thank you so much for joining us today. I'm going to go over a few quick housekeeping items before we actually get into the topic of discussion for today. So as you will see, housekeeping items. So this is an interactive conversation. We really designed these roundtables to encourage interaction, discussion among the group. So we really do encourage you to keep your camera on, you know, join the conversation, whether that's by unmuting yourself and asking a question, sending a comment, submitting a question or a comment via chat or the reaction button on Zoom. There's a lot of different ways to interact, but we really do encourage you to do so. We really want these sessions to be as dynamic as possible. So thanks for, thanks for joining us today. These sessions will be recorded, so you do have access to these recordings after the session. They'll be sent in a few days' time. And last but not least, we have great one-on-one networking opportunities throughout the week. And so what I'll do is I'll send in the chat a link to our networking platform, and we encourage you to take some time and connect with those that are on this session or other sessions that you're attending throughout the week. It's a really great way to, to get to know other people and peers within the business. So without further ado, it's a pleasure to introduce Fenglin Wu, the Director of Retention Marketing at MongoDB, and she'll be talking about building your company's retention strategy. So I will pass it over. Thanks for joining us today.

Yeah, thank you for having me. Just so for people who just joined, I was asking if everyone can just post in the chat where they're currently located. I'm based in New York City, so it's about just after lunch over here, which I do see a lot of people from Europe and India, which is very impressive given the time zone difference. So for today's chat, just briefly tell you a little bit quickly about myself. I've been at MongoDB for about 6 months now. I'm helping the company to build out their retention marketing strategy. Prior to Mongo, I actually started my career more in top of funnel, more in acquisition marketing. But for the last like 2, 3 years of my career, I have kind of pivoted and moved towards more lifecycle and retention marketing strategy. So what I will say before I get started is I would just love it if anyone has— just jump in with any questions. I'll try to keep an eye on the chat, but I do appreciate just any questions, any dialogue, discussions, even if there's like agreements or disagreements. Feel free to just chime in at any point of this presentation. With that said, so what I had in mind to talk, to just like share and discuss as a group today was One, why retention matters. I think it touches a lot about why I kind of pivoted my career to be more towards— more focused on lifecycle marketing. But also, if you are just building out a retention strategy for your company, how you should start, like what's a good starting point, what you should think about, how to build out that strategy. And then finally, just what are some of the general metrics that we tend to look at when it comes to retention marketing. So I will start by saying these are— I actually read a lot of articles that relates to retention marketing, and there was two quotes from Harvard Business Review that really jumped out at me that I really wanted to share with everyone in this group. The first one is, acquiring a new customer is 5 to 25 times more expensive than retaining an existing one. And I think this should be pretty This should be quite self-explanatory, but when you're acquiring a customer, it is extremely, extremely expensive. The amount of money you put into paid marketing dollars, the investment you put into your organic traffic, and just the amount of time it costs the company, both from a marketing and sales perspective, to find the right clients is extremely expensive. Second, this is a second quote that really stood out to me is, Increasing customer retention rates by 5% can increase your profits by 25 to 95%. Obviously, just 25 to 95% is a huge range, and it really just depends on what type of industry you're in. But ultimately, repeat customers will always spend more than new customers on average. And if your customers are happy and they retain with you, they are the most likely audience or users to refer your own company brand to help you develop that loop to keep bringing in new customers at a very cheap rate. And finally, if people know your brand, it is much easier for you to sell them new products or even cross-sell products of yours. So think about— I think about just my day-to-day spending when it comes to even within retail, like once I'm familiar with the brand, they launch a new product, it is that much easier for me to buy into the product. And I think about like companies like Apple, right, or Amazon. Like those are companies that's very intuitive to think about why retention is so important. Next, I really want to talk about how to develop— well, how I think about getting started. In my current company and in my last company, I was very focused on building out this retention marketing strategy and really thinking how we can really start to optimize our funnel. And this is where I would love for anyone just to chime in, tell me what you think, if it makes sense or not. Just share, also even to share your own experience and what you've seen. So when I, every time I join a new company, I think through this funnel. And I think in the past, and I feel like in the past in marketing, the whole funnel was very focused on how do we get people from awareness to registration? And it was only more recently that there's this like huge shift of focus that's about once someone registers, how can I get them from registration and expand and get them to become my strongest ambassador of my product? And that's actually where I think you as a team, you need to focus on your strategy on. So whenever I, the way I do it at MongoDB, for example, is One, I try to be very granular. I try to be very granular about the customer journey, right? So I try to think about— in this slide, I have it pretty simple. It's registration, activation, retention, expansion, and then advocacy. But within every single— everyone's company, you have to think through as detailed and granular as you could be within this funnel. Can you think about what are the steps that goes between registration and activation? What are the steps between activation to retention, etc.? The more you map out your customer journey, the better, the easier it will be for you to find those areas of opportunity. Once you find what your funnel looks like for your company, you should really work with the data team and understand what conversion rate looks like at each of those stages. Right? Is your registration to activation a 60%, like 60% of your users activate after registering, right? Once they activate, how many— what does your retention rate look like? Like, what does your 30-day retention rate look like? Is it in the 80%, 70%, etc.? But when you can map out where my, like, ready stars are, or diamonds, or whatever shape they are, but if you can find out where your conversion rate is at each of these stage, that will actually be very telling for you because you can then compare those to industries very similar to yours. and you can instantly tell where your areas of opportunity is. So for example, for some companies, activation is usually defined as either you enter a credit card, or it means you activate when you take that first action in getting started with a SaaS product. So at MongoDB, for example, it can be once someone deploys a cluster. That's how we would define activation. And We know what our registration to activation percentage looks like, and we know that it is above industry standard. And given that, that means that my first priority when I joined the company was not to focus on this registration to activation piece. Then the second stage I look at is then I look at retention, retention, right? And I, I worked with my data team. I figured out what my 30-day retention rate is, and I was able to then segment within it and realize that different cohorts of users have different 30-day retention rates. And that is also very— that helps me know which segment of my users should I really be optimizing that retention strategy for. And retention for me is, can be anything on their first 30 days of onboarding, right? Like how can I, how can I set expectations correctly within their first 30 days with me, within 30 days with the product so that I can set them up for success, set up their expectations so that they are really going to start leveraging our product and become very engaged users. So I hope this all makes sense. I'm gonna pause maybe for like a quick 10 seconds just to see if there's any questions coming out of this.

Uh, how do you pronounce your name?

You can call me Phong.

Okay, Phong. That's, that's fun. Okay. So if, if 1,000 people are at awareness, generally speaking, what percentage could you expect to get to advocacy?

That's actually a pretty good question. I've actually, I actually don't know if I've ever looked from awareness down to advocacy. Like, I actually don't know if I ever, because sometimes when I think of advocacy, I think of like, you start to have an expansion, right? Because You can also look at these in a dollar sense, like revenue sense. And if that's the case, it's not like, oh, if 1,000 people join, you're only going to end up with like 2 people in advocacy. So I actually don't know if I have— I guess the short answer is I don't know if I actually can tell you the actual— what I think is like industry standard. What I can share is like generally like what I see within like registration to activation, right? Like usually you want that 70% ballpark. And it also depends on if you're freemium or like a free trial product. So the standard, like the conversion rates really varies heavily on your product and also what, how your company monetizes. And actually, John, thank you for speaking. John is saying he usually sees like a 22%.

Do you ever sit around thinking about how to create more advocates?

It's interesting because I've worked for B2B in the last few years, and I will say advocacy in B2B, in my experience, has been a little harder only because in some of my past companies, we've really tried to figure out what incentivizes B2Bs to refer us, right? Because giving, giving people like a $10 credit that they're charging the company isn't a big incentive. So I will say advocacy is something that I think a lot about, but I also think is harder in a B2B space.

But last thing, like for example, someone signs up, you ask them if they'd like to be an inspiration to others and potentially participate in a documentary of how they transform their business, they check yes, You record elements through the process, then they become an advocacy story you've made for them. They share it, and then you have more advocates.

Yeah. And actually, so advocates can be either like in the sense of like referral. I think of it, it can be either like referral programs, right? Like refer us or refer a different company, um, or refer a friend so that that company can use us. But actually, you bring up another good point because in my last company, one of the things they also do is they have an idea of a developer community. So I work for companies that target developers, maybe as a, just as a background. But a lot of the companies I've been working for has the idea of they built a developer community. And they actually asked developers to help publish articles. And a lot of developers will actually do it because it helps them build up their own portfolio, but it's also something they're passionate about. And that, in a way, is advocacy, because you're having other people essentially help promote your own organic and SEO traffic over time and building your own content. So I think advocacy can work, or can— it can show up in a different way, like a bunch of different ways.

Thank you.

I've never thought about how to turn more customers into advocates, and it, it seems like a very nice flywheel.

Yeah, and I think about it in like in consumer markets, it's very apparent where I always refer my friends to, I don't know, the newest pot and pans that I just like, literally Thanksgiving, I bought a bunch of pots and pans, right? And I referred my entire family to it. So I get that $10 off. But I think the same can be applied or should be applied in a B2B. But it probably just has to be a little more creative and it can't be in the form of I think money might be less of an incentive when you're spending company money.

Yeah, thank you.

Yeah.

Yeah, I might chime in. Sorry, my name's Bill. Fascinating topic. I was at a company, I had a guy work for me who was extremely good at doing this. It was B2B. And what he had mapped out was a very sophisticated customer journey, to your point. What we were very thoughtful about was you can't get somebody to an advocacy stage until they were ready to get there. So we started off by just trying to understand where they were, like how long has it been since they first purchased, have an assumption if we had metrics is how far along were they in using the product. And then after they had used it, what services of the product were they using or not, and started to educate them about other services that they had already paid for. That they weren't using to try to just position ourselves as being, we want you to get as much value out of the services you've already bought, and then provide them successes and videos of customers that had gotten value out of that. And then after a period of time, we sort of felt comfortable after they engaged with the content, we could measure that. Could we approach them to be, quote unquote, an advocate? But we were very careful not to assume that they were an advocate until they had gone pretty far down in terms of timeline. And consumption of the services that we offered because we didn't want to put them off to think that all what we were trying to do was just to be yet another, you know, another sales— another salesperson, right? It was sort of like we were very consequential that you've already bought the product, our job is to make sure you get as much value out of it, and then if we're really good at doing that, the advocacy should just organically happen. Like, they'll want to be an advocate. And so I've never been able to do that since because to your point, it's really hard and I think companies don't think that way. And that was B2B, by the way, but it was a less than $7,000 sort of ACV product that went through a channel. So it was very, it was very transactional. So it was high volume kind of a thing. So it was, I've never been able to do it. I'd like to do it at the company right now, but I've never had a chance. So anyway, if that was worth anything to anybody. It was well done. I inherited the guy who built it. I didn't build the program.

Yeah, I would say advocacy has always been, if I were to look at my own career, I feel like advocacy has always also been the hardest for me because especially in B2B and then depending on who your audience are, your audience by default might not be the type of person that likes to be an advocate, right? So you have to, it is very careful because you also don't want to, make them— once you retain them, you don't want to drive them away. No. Because that would be the worst thing you can do is you've upsell them, you've successfully like cross-sell them, and the last thing you want is to drive them away because you're forcing them to take more actions.

So does anybody have any experience with tools? I used Influitive back in the day. You know, I don't know if anybody's using any tools. That was a tool to try to get people to become influencers, but it's been a long time. But I'm curious if you are— put it in the chat and not bother this, but I'm just curious. Curious if people have used any tools along the ideas of building advocacy. And I know I used Influitive, but it was several years ago. So if anybody has any tools, I'm interested.

There are a couple new ones like Warmly and User Gems, which are more focused on kind of bottoms-up SaaS. And they're really about advocates who leave your— they're your customer. And then you can use them as advocates for future customer base. But there's tons of them kind of out there.

Actually, even for my sake, would you mind putting that in the chat? I'm actually— I would love to look into those companies too. I think it's like— I do think this is such a great forum just to hear other companies and what tools they use. And in the meantime, I'll jump onto my next slide. Which is kind of a continuation of the slide prior, but it's, it's just to say, when it comes to retention marketing, there are tons of channels you can think about leveraging. And based on where your biggest drop-off is, that you should, you should really understand your customers and think through which channels is best in influencing them, right? So if your biggest drop-off is like no one is advocating for your product, right, then maybe you think through How do you build a more successful referral program and loyalty program? If onboarding is your biggest drop-off, then think through using in-app product tours or leveraging email marketing, which is a very— email marketing, I would say, is probably the most common channel for people to get started when it comes to retention marketing. And in the next slide, I'm just going to share some of the metrics that I tend to look at when it comes to retention. And I'm going to bring us back to this funnel because I think what's interesting is in every step of this funnel, there should be a metric you should be looking into to monitor. And some of these are as simple as like the activation rate or the retention rate. And in our company, we actually will look at, we actually have like 30-day retention rate, 60-day retention rate, 90-day retention rate. But we do— I would say, I would imagine most companies, most SaaS companies are probably similar, that your 30-day retention rate is probably the most telling, because how successful you onboard a customer will probably tell you, will probably be most indicative of how likely they are to retain with you.

Can I ask a quick question about that? You mentioned that you kind of are working with your data scientists to pull these numbers. I guess in MongoDB, you kind of work hand in hand with the data scientists to measure these, or you have a dashboard, or kind of how does this work on a practical level for you guys?

Yeah, so it originally started as more like an analysis with the data team, and then what happened is it is built into a dashboard for us. So we do have like activation rate, retention rate, and churn rate as a dashboard. NPS, like Net Promoter Score, we also have it. That's not in the dashboard, that's just through like the NPS site that we use. And actually, multi-product adoption rate and net dollar retention is numbers that we don't have yet. But, or that's not in the dashboard form, but I think we generally know the number when we pull it every quarter or once a year.

Got it, thank you.

Yeah, but I do highly recommend like some stuff like activation rate, churn rate, and retention rate. You should know it. You should know what it is on a monthly basis. I mean, depends on how your company, but for most SaaS companies where you have a monthly recurring, you want to know that number on a monthly basis. Madeline, you asked about how to measure net dollar retention. So I think the general way, and I actually have a very quick link on this later on, but I think the general way people think about measuring it is, You look at what your starting MRR is, and you add your— I think you add expansion, and then you deduct all the churn dollars, and then you divide that by your starting MRR. And your net dollar retention, what it's really measuring is what percent of your revenue from your current customers do you retain. So say if you have over 100% net dollar retention, then that means you're getting growth from existing customers, and that growth actually offsets all of your losses in churn. But there's a— in my last slide, I actually have a website that I use that I think describes net dollar retention pretty well. I'll go into the next slide. So that's kind of the end of the presentation. I know we have— we're pretty much at time. Before I just see if there's any more questions or discussions, These are 4 of the websites that I think is very helpful for anyone to read through. So the first one is the Harvard Business Review, where it really emphasizes the importance of retention. The next 2 is a, it's a program called Reforge Program. And there they develop a lot, a lot of great courses that can really teach you everything about any product-led growth type. So they can teach, they teach you about acquisition, experimentation, retention, etc. And then the last one is, I'm not sure how many of you are in startups, but I used to work— I've worked for startups in the last 5 years. And this was a Medium post that I think is very interesting. And I actually use these a lot when I'm evaluating startups. And one of the metrics it does talk about is like net dollar retention. So I'm going to end this roundtable just with these final thoughts. I think the first one is most companies, especially within marketing, always starts off focusing on acquisition. And I think that makes, that makes a lot of sense, right? Because you need to get customers into the door and prove out a product, like a product-market fit. However, when the right time comes, it is very important that the company starts to invest in retention. And in order to invest in retention, it is important to know your own data and realize what your conversion rate is for every single, for every single drop-off stage. And I would say the third one is, I feel like retention has only just become a hot topic, maybe in the last like 5 years. So I think it's actually, I think there's more, there's only more and more content now about retention marketing. Even I myself still feel pretty new to this space. So the one thing is I try to join a lot of different Slack groups just to keep myself engaged and continuing learning about retention strategies and what I— just to learn about what I don't know yet. So I hope this roundtable was helpful. I'd love to just see if anyone has any last-minute thoughts or questions that they want to ask this group.

I want to just interject real quick, you know, I took a company from $0 to $80 million in less than 5 years, and the way I did it was by building it into the product. So retention, just like your pot story, you're a user, you used your pots, you decided these are so amazing, I got to share them. So retention is two things really. I mean, this is a great topic, but it's not going to be covered in 30 minutes. The thing is, is You build that into your product as much as possible, and if you don't, it's on you. You're, you're totally screwing yourself because if you build it into the product in some way, then the user experience will be so magnificent that you will build advocacy all day long with every, with every customer. So if you go about it that way, I think you're better off and take two steps back and reevaluate your system or your service or your product. And also, this, this subject per se, it can go consumer and go to B2B. I happen to have 10 years in B2B, and then I have about 7 years of B2C.