Charlie Windschill, Director of Growth Marketing at Ortto, and Amy Farr-Jones, Principal Growth Consultant at Ikaros, delve into the fundamental elements that underpin a successful retention-first strategy, emphasizing the need for data-driven decision-making, alignment across teams, and a deep understanding of the ideal customer profile. From mapping out the customer journey to leveraging activation, onboarding, and ongoing engagement, they explore practical techniques that empower businesses to optimize customer experiences, drive value, and foster long-term loyalty.
Why it's time for growth marketers to pivot to retention
Charlie Windschill: Let's get started by talking about why we think this idea of a retention-first approach to growth is such a timely conversation to have. I think we're all seeing the changes in the market today and thinking about how we can drive growth when we're no longer in this "acquire-at-all-costs" space where money has been cheap and easy to find.
Amy Farr-Jones: Yeah, you put it perfectly in that, in recent months, there have been companies that thought they were going to have access to more capital, but they're no longer able to raise funds. We've seen this shift in focus from looking at the latest super sexy acquisition growth hacks and virality and top of the funnel to how we can expand using our current customer base and do more with less. So I think it's more important now than ever to be talking about retention.
But it’s not just in the current economic period—retention does need to be something that’s focused on from the get-go in any initial marketing strategy because retention is so important for sustainable growth. You really need to get to a stable point where every cohort of users you're bringing onto your platform is actually staying. From my perspective, it's great that people are now focusing more on retention, but it should always be a fundamental part of a marketing strategy.
Charlie: I completely agree, and I think we should acknowledge that a lot of really strong marketing and growth teams have had an eye on retention, but the call out here is to place a heavier emphasis on it if you've been in a luxurious position where you've been almost completely focused on acquisition.
Defining a "retention-first" approach to growth
Charlie: So let’s dig into what we mean by a retention-first approach because what we’re talking about is less of a change in skill set or resources and more of a mindset shift. A retention-first approach is really just thinking about what you can do from acquisition to make sure you're bringing in customers who have the propensity to stick around and grow with you over time, so you can create those really healthy customer lifetime value ratios (CLTV). This allows you to open up different approaches to acquisition. So I think this is a great time to talk a little bit about the fundamental elements that need to be in place for you to do that.
Amy: Firstly, it’s really important for marketers to understand what data is being captured, which they can use to create their segments and then personalize their campaigns. Having that data really lets marketers be quite self-sufficient because they’re not relying on reaching out to a data analyst or the engineering team to pull a list of a certain segment of customers. Beyond having the right tools in place to collect and analyze that data, I think it’s important to get alignment across teams about your ideal customer profile (ICP).
Charlie: I've worked in organizations where we've had a really clear definition of our ICP and we did a great job bringing those folks in. But what we found over time was there was a cohort within that ICP that retained terribly, and they brought down our overall customer lifetime value.
But identifying that did take quite a lot of access to data and analysis, so something else I’ve found useful is speaking with your customer-facing teams and understanding not only who your power users are, but also whether they are difficult to manage—for example, if they’re contacting support constantly. In that case, they might be very active, but it takes a lot of effort to help them, as opposed to groups of power users who are more self-sufficient or are asking more strategic questions about how to use your product. Having that extra layer allows you to refine where you want to focus our time because that's the name of the game.
Amy: In product-led growth, it's all about how you can get your customers to self-serve, to understand the platform, with as little hand-holding as possible. Yes, you are going to have these larger companies that might expect more account management, but you do have to think about whether it’s worth all of the resources to retain that company. It’s really important to keep asking those questions so you can continue to refine that ideal customer profile based on feedback from your customer success team and support, alongside that behavioral data you’re collecting.
Charlie: You're touching on something I feel very passionately about when it comes to any kind of retention-first strategy, which is having your customer journey mapped out. I have mine all mapped out—it's wild and wonderful and full of shapes—but I know all the core touchpoints the customer has right from the first touch, all the core channels, and how they all weave together.
I find it really useful because you can see where you need to move people from step to step to step, and it’s likely you're going to identify gaps in where you're not doing anything with these customers or prospects to move them through your funnel. From there, you’ll be able to identify the different types of campaigns and initiatives you need to fill in those gaps, depending on your industry and business.
Charlie: An example of activation I thought was really well done was from ClassPass. When I joined, they sent me a personalized welcome email right away. During the onboarding process, I had selected what kinds of classes I was interested in, and in the welcome email, they showed me classes that aligned with my interests to drive me to book a class, to have that “aha” moment where I'm like, “Right, this is meeting my needs.”
Amy: It’s interesting you say that because, thinking through that onboarding journey, we often try to reduce friction so we can increase conversions. But with ClassPass, they’ve actually added a few things during onboarding that I would call positive friction to get insight into who their audience is and be able to further personalize and make sure that experience caters to what they’re looking for. So you could have signed up for ClassPass and just given them an email and a name, and they wouldn't know where you live or what kind of activities you enjoy doing.
Adding in some friendly hurdles during onboarding serves a twofold purpose: you can weed out some of the users who aren't really interested and committed to what you’re offering, but it also makes users somewhat feel invested in the process as well. When you start going through an onboarding process and invest time in that, you want to make sure you kind of complete it.
Charlie: Another category of campaign that you should consider if you're taking on this retention-first approach would be ongoing product activation and engagement. Most of us, once we have a customer come in, there’s usually a particular set of features they’ve bought your product for, but there are additional features available to them, so we need to educate them on those. Product activation and engagement are all about helping consumers realize increased value out of the purchase that they've already made or perhaps even expanding into additional feature sets that will unlock more revenue.
Identifying promoters and detractors
Amy: It's really interesting you bring that up, Charlie because I think with product activation, we should really take a step back and look at users or customers that are already using a particular feature or product and dive into their customer journey and what their path to using that feature looked like. So, for example, if we look at the ten thousand users that are already using this feature, did they read a piece of blog content or did they go through our educational tutorial on the platform? Then we can look at how we can use those insights into the journey and the experience of that segment to then educate additional users.
Charlie: I think what you're touching on there is the idea of having a complete view of cohorts of users. How did we acquire them? What engagements and touchpoints have they had with our brand across all the different channels? Which groups are exhibiting the behaviors that I like and might be worth prioritizing? And then on the other hand, what are the cohorts of users who aren't doing what I want them to do?
Amy: I read a really interesting article about Superhuman trying to find product-market fit. The way they approached this was super interesting. They looked at their entire customer base and placed them in this quadrant. They asked them, "If Superhuman no longer existed, how disappointed would you be?"
The people who would be extremely disappointed fall into the product-market fit category, and then they have the somewhat disappointed category, and the bottom two quadrants are not really disappointed. So the bottom two quadrants probably consist of users that are not their ideal target market. They really wanted to focus on these two top quadrants. When they think about making feature enhancements and updates, they want to make sure that they equally balance these two groups because they want the group of users who are somewhat disappointed to eventually become extremely disappointed.
Charlie: That's a really interesting approach to identifying your ideal customer profile. So, we have touched on welcome and onboarding, activation, and ongoing nurture to provide value and focus on habit creation. Some of the other categories I would suggest focusing on are customer loyalty and appreciation, and not just when it's time for a customer to purchase again or decide to renew, but to make sure they're feeling appreciated. I tried to find an example of this, and I couldn't. I think the call out here is maybe this is a particularly underrepresented area that we all need to focus on.
Amy: It relates to that habit creation loop—we want to be celebrating those positive engagements and milestones with our customers. Sometimes that's in the platform, like the Mailchimp monkey that gives you a high-five when you send an email. But sometimes you don't have the ability to influence the product, and often marketers don't. We sometimes don't have direct access to engineering resources, so we have to do things through different channels.
Charlie: Yeah, I love that because it actually speaks to something we have done at Ortto where, in our own in-app onboarding, we have a point of celebration once you finish your onboarding checklist where we just take a moment to recognize and celebrate. If you can look for those points to surprise and delight, even if you don't have control over creating something new, that's a really great step in the right direction.
Amy: Absolutely, and if you can't put a checklist like that within your product, there are things you can piece together with your data to send within an email. So there's a way to work around that and achieve a similar outcome. Another initiative that I like to focus on with clients is around NPS and how we can use NPS to understand more about your customers—are they promoters or detractors? Then let's make sure we're getting in front of them and sending an email to understand what we can do differently.
Charlie: I love that, and automating that kind of thing takes so much more time off your plate, which means that then, rather than going out and asking for those reviews, you can take the feedback and, if there's a really rich piece of feedback, get in touch and have a conversation.
Amy: I think having those conversations with your customers as much as you can is so valuable. I remember in one of my first jobs, I had phone calls with about a hundred customers—mainly promoters. I asked them to tell me who they think this platform's for in their own words, which I then bucketed under different USPs. It was a really quick way to do your segmentation if you don't have things that are already set up. We also then used a lot of their words in our ads to speak to our target personas, and we saw much stronger conversion performance.
Charlie: I'm seeing this loop you're creating by speaking in the language that attracts the people who actually have the problems you can solve and are therefore more likely to stick around because they see the value of your product. That's such a great idea. I might steal that from you, in fact.
Key takeaways for marketers pivoting to a retention-first approach to growth
Charlie: Let’s wrap up with some parting words of wisdom, any "gotchas" that marketers should look out for as they are starting to implement some of the suggestions we've shared today.
Amy: I think everyone can agree that retention is super important, but it just needs to be prioritized and understood across the company for how much of an impact it has on the overall growth of a company. Because retention is further down the funnel, we often think it takes a long time to run experiments and initiatives and get significant data back. But understanding if there are any leading indicators that will tell you what your retention is will give you some good ideas and help you increase the velocity of what you're doing.
Charlie: I completely agree. I'd almost think of our conversation as a checklist for the things that need to be in place, so if anything we’ve talked about feels particularly tricky, like you don’t have that or you’re really unaligned, that's where I'd start. Tackle the biggest beast first so that you can start to create efficiency. I think you'll be well on your way to seeing some change happen if you do it that way.
Charlie Windschill is an agile growth marketer with 9+ years of B2B SaaS experience working in the NoAm, EMEA and APAC regions. She specialises in helping startups and scale-ups achieve goals by executing innovative strategies including product-led and content-led growth. A proud marketing generalist, Charlie makes data-informed decisions about which levers to pull and when to drive sustainable growth. Building and scaling channel footprints, creating motivated & engaged teams, and entering new markets – she's done it all for companies including Showpad, Mixpanel, Lattice and Ortto. Charlie's motivated by the joy of building something new and am passionate about marketing's role to contribute at every level of the business.