If there is an unheralded internet success story, there’s a good chance that ClickFunnels would be atop the list of nominees: just 5 years old, it is a bootstrapped software company out of Boise, Idaho (!) generating more than $100M in revenue per year. And it has helped thousands of others build successful online businesses.
I am not a ClickFunnels user, but have remained fascinated by its transcendent success for a while, and wanted to dig in more.
Moreover, ClickFunnels and its CEO/face of the brand, Russell Brunson, take a different approach to retention with their churn funnels that it definitely merits a dedicated investigative look.
In this post, we will deconstruct the strategy and execution of the ways that ClickFunnels leverages to keep customers from churning, right at the point of cancellation. These are strategies that are immediately applicable to your own subscription SaaS business, which you can mold to fit your customer needs and business offerings.
What Is ClickFunnels?
ClickFunnels is a sales funnel builder that you can use to market, sell, and distribute products online. You can build landing pages, host webinars, membership sites, process payments, and much more. Part of the selling point is the ease-of-use in building funnels, and how it is an all-in-one software solution for online entrepreneurs.
The promise of ClickFunnels is certainly alluring: “”Quickly Create Beautiful Sales Funnels That Convert Your Visitors Into Leads And Then Customers…” (Without Having To Hire or Rely On A Tech Team!)”
There are pre-made templates for everything, from an easy-to-swallow $97 per month. Here are the numbers that ClickFunnels showcases on its homepage as far as customers:
The Financials Behind ClickFunnels
ClickFunnels is a private company, so revenue figures are not readily available, but this interview with Russell Brunson and Nathan Latka state about a $60M revenue per year, this 2017 Forbes article pins revenues at $90M revenue per year.
And churn numbers? The same 2018 interview with Latka revealed customer churn at 10% per month, mainly weighted towards those churning out in the first two months. The cohorts of customers between 2 months and 1 year churned at 4%, and after 1 year, virtually no one churned according to Brunson. That’s right: churn at 0% according to Brunson!
So clearly once customers have onboarded, set up funnels and gained value (in the form of selling digital products with sales funnels), then churn is very low.
With that context, we can understand how Brunson and the ClickFunnels team constructed their retention funnels to help customers bridge the gap between their goals and the ClickFunnels product.
A Deep Dive Into The ClickFunnels Retention Funnel
If a user clicks the button to cancel their subscription, they are directed to this page (you can visit it for yourself here):
These are options that are likely the most quoted reasons that their customers cite for quitting. In fact, the reasons listed here encapsulate the reasons why most customers will cancel their software subscriptions.
But keep in mind that the majority of the people that land on this page are within 2 months of signing up, and have not yet onboarded properly or reached their first Aha moment with ClickFunnels.
But they can not actually cancel until they self-identify for the reason that they are canceling.
This creates two opportunities for ClickFunnels :
- Keep The Customer
- Learn From the Customer Before They Actually Cancel
This is fun choose your own adventure, with each answer leading down a different path and offer. And each landing page reveals a compelling pitch and offer that would certainly make a customer think twice before actually quitting the ClickFunnels service. Let’s dig in to see how this works….
Urgency & Accessibility of Support
My guess is that missing features may be the most common reason for cancellation, and thus is listed first among reasons to cancel. And not coincidentally the landing page for those who choose the option “Missing Features We Need” is the most robust and convincing:
Now I am not so familiar with the intricacies of the ClickFunnels platform, but looking at this product comparison chart against other apps, I start to get dizzy and say “mercy, you win ClickFunnels, I assume that the feature is somewhere”.
What I like about this page is the immediate availability of a ClickFunnels expert via live chat. This is definitely not common, as 24/7 live support chat is a significant cost center. However, retaining customers on the verge of quitting is so important that it is absolutely worthwhile to help users get the most out of the product. Questions can relate to Technical Questions, Non-Technical Questions, VIP Support (all of a sudden I am VIP? that’s cool!).
But Brunson and ClickFunnels are not just trying to play defense here. They intrinsically believe that they have the best product on the market, and take the bold move of upselling you as you are trying to find the exit:
If he is able to convince the user to upgrade with the 14 day free trial, I’d consider that one hell of a come-from-behind victory. And I’m guessing that they get a significant portion of expansion revenue from that.
A Complete Counter Argument
Brunson covers all bases in the video on the page, with his counterargument for those looking to cancel:
- Feature requests can be added to the development queue
- Upgrade to products that have the desired features
- Integrate with Zapier to get the features via 3rd party apps
Another powerful subliminal message is the power of the voice of the customer in the ClickFunnels organization and product road map. As a user, if I am looking for a feature and actually feel empowered that my needs are prioritized by the CEO, then I am emotionally seduced to stick with this company as I feel that i have ownership over the direction that the company is going. This is a powerful sentiment that is not often conveyed with companies of this size and scale.
Playing Up the Fear Of Missing Out
ClickFunnels has adopted the brilliant catchphrase “One Funnel Away” — a statement broad enough to appeal to its wide range of customer profiles and use cases, yet specific enough to create intrigue. What is on the other side of that one funnel? It is really whatever you desire: more money, time, freedom, status, etc.
But the point is that ClickFunnels is the bridge between your current situation and your biggest goals.
Cancelling your account burns that bridge and leaves you to fend for yourself. That is quite an effective way to bring up self-doubt at the moment of cancellation.
Additionally, each of these cancellation pages includes the option to Pause an account for $9.99 a month. That is a small amount to pay in order to maintain access to your subdomain, customers, leads, pages, funnels, etc. Basically everything that you have done with ClickFunnels would be deleted.
If we remember that a majority of the customers on this page are customers who signed up within the past 2 months, this is not a huge decision. But if you have gained some traction with ClickFunnels, and started to build a system of generating revenue online, then this is a big deal. And grows in magnitude as customers get more invested in the platform.
Live Training and Q&A, for FREE
For those that identify that they are leaving ClickFunnels for a different company, surprise surprise: Brunson makes a clear case that there is no alternative on par with the offerings of ClickFunnels, in terms of product offering, price, or support.
Judging by the options on the landing page, the ClickFunnels team believes that product education and training can get customers to maximize value from the platform. This is an effective offering as it diverts the user from their initial intent, which was canceling their subscription.
This offering underscores the importance of onboarding as it relates to product engagement and retention. If customers are not onboarded properly, or not brought to that moment of value, then they are far more likely to churn. And those users end up at this page, where they acknowledge that they are quitting in order to sign up for a different product.
Product education and re-onboarding is at the core of those who are churning for “Not using it enough”, “Shutting Down Business”, “Too Expensive”, “Bugs or Support Problems”, and “Other Reasons”.
In the interview with Latka, Brunson notes that some of their North Star Metrics that drastically improve retention are linking to a custom domain and setting up email autoresponders. While I have not seen any of these educational trainings, I imagine that part of the training is geared towards building inspiration and excitement, and the other part about the tactics of setting up and launching live funnels.
Takeaways From ClickFunnels
Listen To Customers
This is a painfully obvious statement, almost like a reminder to eat more vegetables and exercise. Listening to customers is good. However, there are statements and examples throughout these retention funnels that demonstrate that ClickFunnels values and acts on customer feedback.
This is a positive indication for customers, knowing that they are truly valued, and not with just lip service.
But Brunson’s connection and continuing conversations with a range of customers has played a critical role in the company’s success.
In his interview with Latka, Brunson acknowledges that his conversations with customers has allowed him to stay ahead of the curve with product development. So while the list of features that ClickFunnels has is enormous, it is thoughtfully cultivated to deliver value specifically to the needs of the customer. This is the underlying premise to their near 0% churn rate for engaged customers.
Be Personable And Accessible
The customized videos on each landing page are powerful. Brunson comes across as personable, genuine, and fully dedicated to helping users succeed. The videos are informal yet well-crafted.
It is hard to verify as an outsider how effective they are at actually reducing churn (do those who watch the videos churn less than those who do not?).
However, the way Brunson speaks does highlight what ClickFunnels stands for, which is seeing customers achieve success. Whatever your medium of choice is, you can take a page from the Brunson playbook of creating a “personal” connection with users by being genuine and accessible.
Take A Second Chance to Make a Good First Impression
ClickFunnels has a steep learning curve. The target market are entrepreneurial folks looking to build and grow an online business. If customers don’t meet their goals, who is that on–the ClickFunnels platform, or the individual themselves?
There is enormous proof, to the tune of 65,000 customers, that the ClickFunnels product can produce hugely successful outcomes. Of course there are numerous variables differentiating those who succeed from those who don’t, but Brunson wants to eliminate the possibility that onboarding is a cause for failure.
To that end, there are the weekly webinars, live Q&A sessions, live chat, educational resources and much more to get people fully onboarded. Reaching the Aha! Moment is so critical to getting customers past the 2 month learning curve that it is well worth the investment of ClickFunnels to provide all necessary training to customers.
Add Value And Be A Thought Leader
ClickFunnels has reached breakaway success based on their track record of helping others succeed.
One of the unique and revolutionary concepts that ClickFunnels has introduced to the marketing and SaaS world is the notion of negative customer acquisition cost.
How does this work?
Brunson has produced a variety of books and courses to teach people how to become a successful online entrepreneur. He sells these resources. And each of these resources promotes ClickFunnels as the necessary tool to achieve success.
So you buy a book upfront, consume the content (which is legitimately good, in my opinion–actionable and insightful), and get so fired up that you buy ClickFunnels.
There is no better example of thought leadership than this. And it has paid outsized dividends to the growth of ClickFunnels.
How can you create fresh and unique value for your customer base that also ties in your own product?
Hold Your Customers Accountable
One new strategy that ClickFunnels has rolled out is a paid course, called One Funnel Away. This is another example of thought leadership that people are happy to pay for, in exchange for the training on building funnels.
The price tag of $100 is a bit more steep, in fact it is more than the cost of the monthly $97 basic plan. But it is enough to have skin in the game for customers, so that they don’t quit when they hit challenges in the learning curve.
But more importantly for ClickFunnels, it is a means to get customers deeply engaged in the product and beyond the challenge of setting up their initial sales funnels. Once customers hit this Aha moment, they have successfully onboarded and their likelihood of churn decreases dramatically.
This One Funnel Away is a brilliant combination of driving negative customer acquisition cost and getting users incentivized to onboard and succeed with the product.
Get Affiliates To Support Your Retention Efforts
As you may imagine by now, ClickFunnels has a devoted fanbase, self-proclaimed #funnelhackers. And many of these people are also affiliates of ClickFunnels, who get paid for any customers that they refer.
There are different ways that software companies compensate affiliates. ClickFunnels opts for 40% recurring for all ClickFunnels monthly accounts.
This is a generous commission percentage, sure. But more importantly in regards to driving customer retention, this is a recurring pay out, which means that affiliates are financially incentivized to make their referrals successful and engaged with ClickFunnels.
If you have an affiliate program of your own, you can learn from the ClickFunnels model by considering a recurring monthly pay out, and ensure that your affiliates have all the resources and knowledge they possibly can to help their audience succeed. Affiliates can be a powerful channel for growth, and partnering closely with them can also have positive impacts on customer retention when incentives are properly aligned.
Need help with a retention funnel of your own?
The strategies that ClickFunnels employs to improve customer retention are smart, yet underused by many subscription software companies.
Too many companies do not collect important feedback from canceling customers, and even worse, do not have a concerted effort to save these customers at all costs.
At Retainable, our sole purpose is to help B2B SaaS companies reduce churn. And building retention funnels is one way that we can help. These are done-for-you funnels specific to the needs of your customers and seamlessly integrated within your app. Email us at firstname.lastname@example.org to learn more, or set up a consultation to get started today!