So in 2020, retention is the goal, it’s the game changer, it’s all about mastering the hard data and the soft skills to personalize your communications and campaigns to match every customer’s unique and individual engagement preferences. And every day, thousands of brands across industries ranging from fintech to foodtech leverage CleverTap to automate engagement and deliver real-time customer experiences at scale.
So in this special mini-series, bi-weekly here on Mobile Presence, sponsored by CleverTap, we deep dive into the dos and don’ts of retention marketing and we lift the lid on how you can move the needle. So, to guide us on this journey, our premiere show, kicking it off is Sunil Thomas, Co-Founder and CEO of CleverTap. Hey, Sunil, great to have you here today on Mobile Presence. How you feeling?
ST Thank you, Peggy, feeling wonderful, it’s awesome to be here.
PAS And it should be because I know, you know, I’m out there in the industry, I go to the conferences, I visit with the companies, I’ve been to visit you on my last trip to Mountain View, a lot of things happening there at CleverTap, all of them good, I think you are in the process right now of moving into a new office, as a matter of fact.
ST Yes, in fact today, Peggy, is day one of our new office. We’ve been growing incredibly 2X revenue year over year growth for the past four years, obviously employees growing all over the globe. So today, we operate in six regions, five continents across the world and we are moving into our new office actually just about a block from where we are right now in Mountain View.
PAS Absolutely, and I love that simile to day one, all of us who know Amazon, we know what this is, this is amazing, so I love that description. Speaking of description, tell me a little bit about CleverTap, you know, we said at the top of the show that it’s focused on retention marketing but that can mean many things to many different people. What does it mean to you and how are you addressing it?
ST Yes, thanks, Peggy. So we take a holistic view of retention and our hypothesis right from day one is that you can retain your users by creating magnetic experiences for them, right? You create experiences that are relevant to when they are in your apps, relevant to them, I mean, and also you create experiences for them when they are outside your app using messaging and different other techniques that are available.
Now, experiences can only be good, can only be magnetic if they are contextual, relevant and timely. You, you know, have the ability to sort of keep measuring and iterating on your experiments all over, right? So we allow that sort of framework at CleverTap, we allow you to be data driven, we create the ability to sort of very deeply segment your users and all of this again is to be able to create contextual, relevant and timely experiences. The smaller you can break your user, the smaller groups or segments that you can break your users into, you know, the more chance you have of being relevant, being timely and all of that.
And finally, CleverTap also offers, depending on your MAU’s or how many users are in your apps etc, we offer massive scale so we send out billions of notifications literally every day, we personalize a lot of apps per minute, it’s just growing. You know, we are probably the only company in the world out there who takes this holistic view of retention, we allow you to create experiences for individualizing your apps, for very highly targeted relevant messaging across 13 or 14 different channels, be extremely data driven and provide you the ability to measure and iterate every day.
PAS We’re going to deep dive into that in a little bit but, you know, you’re talking about your approach and I remember reading a story not very long ago about you and your other colleagues, so you’re 3 founders together, and you got together and there was a light bulb moment because you thought, you know, work was too slow, you stopped having fun is what you’re quoted as in this article and you decided to join together and tackle the retention problem. What was that moment, what was that problem you were approaching? What was broken in retention that you felt you had to fix?
ST So, that’s an interesting theory. So we are, just to give you context, we are 3 co-founders all of whom are technical in nature – I myself am a computer science engineer, I’ve been sort of educated and trained in computer sciences all through my sort of professional life, so 3 tech co-founders, got bored of our day job, our regular job at that time because it’s a little slow is part of the story but also, more importantly, we always driven and led engineering building software, right, for our companies whether as all of us being CTOs before in our lives and have led engineering teams of different sizes and marketing, you know, always comes to you for solving these problems and Valentine’s Day just went by in Feb and then sure a lot of companies in the world were planning around what the app experience, what the website should look like on Valentine’s day, what experience should they surprise the user with almost when he or she visits the site.
And you know, engineers don’t like to do these jobs because they’re sort of one-off and, you know, they come and go, it’s not only you have to dress up your app for Valentine’s Day but you also have to go back to normal past midnight – engineering teams try to make these as platforms so that they can re-use it for the next event whatever is coming up, for Labor Day, what have you, but it never really works out that way and there was just no software for this, that at least we had found in our professional working careers and we just decided to create something to solve that problem.
Deep beneath us, we are solving the problem for engineers not required to do such things, of course, by giving full control and power for the customer, for their customers which is the growth marketers, the retention marketers and so on.
PAS It makes perfect sense because what you’re saying, and that goes back to what you said before, you know, it’s about what people are doing in the app, it’s what they’re doing when they’re not on your property, you know, on your website and it’s that personalization of that experience – and if you think about it, do it for Valentine’s Day, take it down, do something else, you want to have something that takes the work, the pain out of that really and we’re also seeing that retention is moving up on the agenda, it’s coming in as the top 3 challenge. Is this surprising to you that marketers are being challenged or is this even perhaps a little bit overdue?
ST I think this is very overdue, Peggy, we’ve been – CleverTap has been at this for almost 7 years now and, like, you know, this is our day one problem that we are solving, right? For us, it’s very simple and I think a lot of consumer brands out there realize this, I mean, it’s a very simple ROI game really, I mean, even Harvard Business Review says it’s 25 times more expensive to acquire a new customer instead of sort of retaining your existing base, you know? Bain & Company says that you could drive up to 75% increase in profits by retaining your existing customers if you increase your retention rate that is by just about 5%.
So it’s a simple ROI game really, fit first principles, if some user has already discovered your brand, discovered your app, has downloaded it, is using it etc, right, so you are started improving retaining that person is a lot better than trying to get somebody and then be stuck in the same problem of retaining that person, right. So if you think about it from first principles, it’s trying to hold on or keep or create experiences for people who already know of your brand and clearly the numbers show in the ROI.
So I think that’s why it’s important and it’s surely gaining popularity and we like it.
PAS Absolutely, I mean, you know, this is the era that people are saying, okay, the cheap money era is over, we have to focus on using our resources to show results, you show results when you keep users, when you keep customers coming back and speaking of that, great segue, we will also come back, Sunil, we do have to go to a break right now but listeners, don’t go away, we’ll be right back.
And we are back to Mobile Presence. I’m Peggy Anne Salz with Mobile Groove. We have Sunil Thomas, CEO, Co-Founder of CleverTap and before the break, Sunil, we were talking about the approach to segmentation, we were talking about trying to be very personal, very contextual – that’s not just about making customer segments, that’s about motivating them which is very different. I’d like to understand how you approach it, how do you make these segments actionable?
ST So again, it starts like you said exactly with the ability to segment. We provide multiple ways to segment, like segmentation can be based on past behavior, right, give me users that I acquired from a Facebook campaign in the month of January that were active in the months of February and March in my app and I have now not seen them for 90 days – very powerful but it’s all based on past behavior, a little manual in nature and so on, right? That’s the first segmentation type if you will.
We provide segmentation based on live real-time user behavior, so to speak, so somebody lands in the city of New York or you’ve added to cart but within 5 minutes not purchased the product that you added to cart. You’ve installed the app but within 2 weeks haven’t registered with the app and so on. So any action or inaction or lack of action, you know, within a specified time period whether it’s seconds or minutes or days is another very, very actionable segment.
And then the last type of segment and we talk about that is also future predictive behavior segmentation and this is based on intent – there’s so much data that is available in CleverTap today that we are able to predict next actions for every individual user.
So if you put together all of this segmentation and then use these effectively, then you can action it and CleverTap is the only product like we talked about that provides you two sorts of action – one action is with messaging, that’s pretty common and you can sort of message, reach out to the user like your Uber is 5 minutes away, for example, right, before the cab comes, that’s a good example of a message that users expect, users like, users will never turn off, right – like an airline telling you that your gate has changed from 75 to 87 – again, if you get it on time before you walk to your gate number 75, then you appreciate it and you don’t want to turn it off.
So these are examples of good real-time messages, only for those people, you know, who it effects, so to speak. That’s one action while messaging across channels.
And then you come to, you know, why should the home page of the app not be different for somebody who uses the app every day, for somebody who consumers sports news rather than politics news, for example, or for somebody who has not opened your app in like 3 months, for example, right? That person should get a different treatment even on the home page, so that’s an example of, like, home page personalization or individualization if you will if your bill is due in the next three days, why not have a pay now button automatically appear on the home page, right, that kind of a thing.
So you have to merge both these experiences with messaging and with app personalization and we provide both those actions for any segment that you’re able to create at CleverTap.
PAS It’s more than personalization, it’s individualization, it’s those messages I think many of us wish we could get if the companies were actually using all the information that they have about us, there’d be less of those messages that really aren’t on our terms or those nudges that aren’t on our terms and more along the lines of yes, I do know and understand what you need contextually and to make that valuable and I think that’s part of what you’re talking about when you talk about magnetic, correct?
ST Absolutely, I mean, messaging, you know, retention has this general team in many people’s heads that, you know, that all the users are trying to run away from your app and you’re trying to sort of throw a lasso and grab them back in, that is absolutely the opposite of what magnetic experiences are – magnetic experiences are those experiences that create a mutual attraction or a connection between you and your user so that they are incentivised or likely to come back and use your services.
So it’s about creating those kind of magnetic experiences with segmentation, with data as the foundation and with actions again with messaging as well as individualization – a great term, I think, because these things keep getting talked about but the reality is today’s segmentation is pretty blunt, people don’t tend to use it because of lack of tools to slice and dice it finely, to automate it, to iterate it, to experiment with it and so on.
PAS It makes business sense, you want to speak, you want to converse, you want to connect with your customers on their terms, offer something valuable because you understand the context because you understand and can predict the intent. But it also sounds like it could be a lot of work, a lot of teams are small as it is – is this something they can automate or partially automate, how does that work?
ST Yes, if you are starting afresh, the best way to start is by automating it. In fact, the best way to start is by using a couple of like the pre-built models that CleverTap even provides right out in the software, like a very popular segmentation model that a lot of our customers use is based on recency and frequency of use, RFM recency, frequency and monetization.
So based on the recency, how recently the user has come into the app and based on frequency of use, like how often in the last X months or X days or whatever that user has used the app, the user base gets automatically divided into 10 different segments from the most recent, most frequent, being your champion users, for example, and at the other end of that spectrum are your hibernating users, these are your least likely and least frequent users. So that spectrum divides your user base into 10 segments and you can automatically set up automated routines for people to, for your users to experience when they sort of fall in and out of these different segments.
So as a user grows up to become a champion user by increasing her frequency of use, her recency of use and so on, then that person starts getting a different experience.
And that’s just one model, Peggy, we just recently invented with one of our strong partners, in fact based out of Berlin where you are, we’ve invented another model of segmentation called the AIC framework, that’s the acknowledgement, interest and conversion framework – this is a simple method also where you break up your users into people who just acknowledge you, meaning they are sort of aware of you, they open your app once in a while, they do some basic stuff, that’s sort of the bottom of the pyramid, if you will, and they move up to – I mean, the next set of users is people who are interested in you, actually performing the core activities if you will that make up your service, for example, right.
And at the top of the pyramid is converted users, so these are people who’ve actually purchased or, you know, subscribed or done the thing that has monetarily benefited you in a way. And again, it’s a simple pyramid framework to break users into 3 stages, if you will, instead of what RFM gives you 10 and again the idea here is so that you can automate these lifecycle stages and as people move up and your idea is that you want to move up the people who acknowledge you into being interested in you and then move the interested people into sort of converting with you and so on as opposed to pushing hard in a non-magnetic way to push the new user to sort of try to buy your most expensive item off your shelf kind of thing.
Of course, you’ve got to have the mindset, Peggy, you cannot change that to be able to experiment, to iterate, to measure these things and to make subtle changes literally every day or every week or every quarter or whatever your rhythm is to try and keep improving. There’s nothing static in today’s mobile world.
PAS Absolutely, it’s always moving and we have to move actually to a break but listeners we are going to talk about that new skill set, that new mindset that you have to know more about and adopt to understand retention, become a retention specialist so don’t go away, we’ll be right back after the break.
And we are back to Mobile Presence. I’m Peggy Anne Salz. We have today Sunil Thomas, he is CEO, Co-Founder of CleverTap. And Sunil, you left us a little bit on a cliffhanger, I think, you know, you left us saying okay, this needs a mindset, this needs an approach – let’s talk about that, let’s talk about the mindset and approach. I mean, at a high level, would you say we need new skills, will there be new jobs, will we be talking about the retention specialist in the team? I mean, how is this going to play out in practical terms?
ST Yes, so yes, the first mindset change is really to become data driven, right, to almost eliminate your user data silos, if part of your user data goes into some legacy CRM system, part of it goes into, you know, 2 or 3 different analytics platforms, you’re just dealing with these silos and you just cannot drive the impact that you want to. So the first real mindset change is to try and eliminate your user data silos or put in other words, use as much user data as you can so that you can segment effectively, you can action effectively, you’re working on the full picture rather than on a little bit of that really. That’s the first thing, to eliminate user data silos.
And then the real mindset change is to adopt this sort of experimentation mindset, right, Peggy, we spoke about Jeff Bezos a little at the beginning but this is Jeff Bezos telling us literally long, long ago that if you double the number of experiments you do per year, you’re just going to double your effectivity and this is true for mobile growth, mobile retention today. I mean, you just have to have this mindset that you will experiment with it every day, every week, every month and you will only get better.
And then the third thing I would say is that you’ve got to know what your key metrics are, I mean, we can talk about that if you that’s the right direction for this but there are three metrics that we really force all our customers almost to do, to use and if you line on a few metrics, you can obviously experiment everything centres around all your measurements, all your data, all your experiments, all your actions, all your segmentation.
PAS So you know I’m going to geek out and what to know the metrics, right, Sunil, because I mean I remember – and we had this discussion, it was when we first met and it was just around the time when I was talking to food delivery apps and I was talking to healthcare apps and we had, you know, we’re away from the metrics that started with the pioneers of the gaming apps, I’m not disrespecting them but there’s a different metric if you have a casual game than if you have a food delivery app. So, you said metrics – what are the metrics that I need to be watching as a retention specialist, as someone who’s going to experiment and push the boundaries?
ST Yes, so we encourage or we really as strong best practices push down three metrics, Peggy. One is your retention rate, you know, whether it’s a monthly retention rate or a weekly retention rate or a quarterly retention rate depending on the speed of your business really, but we recommend a monthly retention rate and your retention rate has to be sort of metric number one, it is a leading indicator you will know it immediately as soon as these things change so it’s a pretty good one to have right at the top of your list.
The second is your key conversion rates. I mean, every app, every business really depends on, you know, 3 to 5, not more than that, key conversion rates. You know, people from an installer becoming the first purchase, maybe the first purchase to the second purchase, maybe a free subscription to a paid subscription, maybe even as low down the funnel as added to cart to purchase. Each app or each business decides these but there are not more than 3 or 5 at the most, I mean, really more like 3. And these are your key conversion rates and you’ve got to know that, identify that and through all your actions, try to move those forward.
Again, this is a leading indicator in the sense you make changes every day and you notice your conversion rates improving or not and so that’s a pretty good one too.
The third one really, if there was one North Star, it’s this third one, it’s the lifetime value and again different businesses measure this differently and that’s certainly on the top of our list. The only problem with the lifetime value is that normally it’s a lagging indicator. I mean, you come to know of lifetime values sort of increasing only after a long period, reasonably long periods of time and all that, so it’s a little hard to sort of drive everything off of lifetime value, you know, to keep things motivated or engaged and all that good stuff. So you’ve got to pin it down but, you know, track it more on a long-term basis.
And if you’ve gone through these 3 metrics, life actually changes a lot, you know, VAUs and MAUs and WAUs and things like that are a little vanity because they tend to be – you spend a bunch of money to acquire a bunch of new downloads or a lot of page views to your website, whatever, and you see those numbers increasing but it’s not the same users coming back and it’s sort of temporary because of temporary spends and it tends to cloud all those things because they are actual numbers but if you talk about your retention rates, your key conversion rates and your lifetime value, these things automatically take retention into account.
PAS Well, there’s a lot to talk about, I mean, I could go on, we do have to wrap it up but I think we will come back, Sunil, I think we have some things to talk about – we didn’t touch omni-channel which is amazing and very interesting and top of mind and of course the in-app and outside of your app – marketers are getting their head around what it means to market to users that aren’t event there and that’s a mindset change I think as well, so I’d like to have you back when I can.
In the meantime, it would be great just to understand more about magnetic CleverTap – where can our listeners catch up with you? I see you’re blogging and writing over at LinkedIn but what’s the best way to stay in touch?
ST The CleverTap blog is a great place to go, we create a lot of good content there right from our engineering teams to our data science teams to a lot about the games creating, there’s a lot of case studies there about our customers and so on. So, the blog at CleverTap, LinkedIn, @clevertap is our Twitter handle – these are three good places. Otherwise, Peggy, we also have offices across 5 continents so it’s easy to get in touch with our local teams there.
PAS Absolutely, and of course catching with you again I would hope, Sunil, sometime in the near future. Thanks again for taking the time to be on the show.
ST Thank you, Peggy, it was awesome to talk to you, thank you.
PAS And of course you’ll have more about this in the show notes, if you want to contact Sunil or find out more, you can always check out our show notes and of course if you’re looking to supercharge your retention strategy, as Sunil said, then contact CleverTap at clevertap.com.
If you want to keep up with me throughout the week or find out more about how you can be a guest or sponsor on Mobile Presence, then you can email me, email@example.com, Mobile Groove is where you can find my portfolio of content marketing and app marketing services.
Also, as always, you can check out this and earlier episodes of our show by going to webmasterradio.fm or you can find our shows on iTunes, Stitcher, Spreaker, Spotify and iheartRadio simply by searching Mobile Presence. So until next time – remember – every minute is mobile, digital, so make every minute count. We’ll see you soon.