The 13th month: Product Management's impact on renewals
As CTO and Head of Product, I worried about the 13th month.
After an initial 12 month subscription, we wanted our clients to sign up for that 13th month, to renew for another year.
At PowerReviews, we had 1,200 clients in 20 countries. Every month, one or more client’s one year subscriptions were coming up for renewal.
Every renewal was important. We never wanted to lose any annual recurring revenue. But many renewals came with strings attached. With so many clients, it was difficult to agree to every client’s product feature requests as they negotiated their individual renewal.
Here are three actual client requests and how Product Management fielded the requests in order to get clients to renew for the 13th month and beyond.
A Canadian client wanted their customers to be able to toggle easily between French and English reviews for the same product. (Note: This is not a translation feature. This is for switching between reviews originally written in one language or another.)
A large client’s integration between our system and Salesforce had broken and data was no longer flowing back and forth.
A prominent electronics brand wanted product reviews showing on newly released TVs by having reviews from similar, older TVs copied over.
These were not only technical or product problems but involved strategic decision making.
Case Study: The Canadian language toggle
In the case of the Canadian renewal, we had to compare and contrast the long term impact on our system with the short term revenue loss of losing one or more Canadian clients. This feature had been requested for years and we felt they were finally at the point of not renewing due to this issue.
At that time, the “reading product reviews” action occurred 100 million times per month across our network of clients. Only a small fraction of users would click this feature, but the impact of this language toggle was much greater.
In our multi-tenant architecture, this new complexity would be shown in just ten Canadian sites but would exist in all of our 1,200 installations worldwide. This change, like all changes, would need to be tested and maintained forever even though it had a small user base.
We balanced the revenue loss with the engineering estimate to build and maintain the feature and we decided to build the language toggle and retain the revenue. It was a huge success with our Canadian clients and it achieved our goal of having them renew. As a bonus, as our European client base grew, more and more clients activated this language toggle.
Case Study: The Salesforce connector
In the case of the Salesforce connection, the answer was no. We would not fix the Salesforce connection. A year earlier in order to close a sale, we built a Salesforce connector for a client. At some later point, Salesforce had changed its technical integration framework and our connector no longer worked.
We assumed many of our clients would turn on this connection since Salesforce is such a popular platform. However, when we looked in our database, there were only two clients using it.
We were not Salesforce experts so it would take too much engineering time to debug and fix the connector. We didn’t see the demand in our client case so we made the hard decision to sunset, to turn off our connector.
In this case, neither client left the PowerReviews platform (but we didn’t know what would happen when we made our decision). One of them did without the connector and the other found another way to sync data to Salesforce on their own.
As CTO and Head of Product, I created a new framework for evaluating when and how to build connectors to avoid this dilemma in the future.
Case Study: Copying reviews from older TVs to newer TVs
Some client’s product requests have an ethical angle. For example, should we allow reviews for previous TVs to be copied to newer model TVs? Who would decide whether two models of a TV were similar enough to share reviews.
PowerReviews, like other product review platforms, has a responsibility not only to its clients but to the everyday customers who write and read these reviews. We also have to comply with the Digital Millennium Copyright Act and other FCC rulings.
This tension of wanting to have reviews on new products but not mislead consumers led to a lot of discussion with our clients, our in-house lawyers and our external legal counsel.
It was clear from discussions with our clients that other product review platform providers would build this feature for them as long as they switched to their service and away from ours. So the pressure to build this feature in order to secure the 13th month, the subscription renewal, was heavy.
In the end, our team came up with a transparent solution that worked ethically for customers, legally for the FCC and did not increase our manual work. We would allow companies to “copy” reviews from older products to newer products (not just TVs) with a web-based tool they could access in a secure, self-service manner using our client portal.
For every review that appeared on a different product, there would be a prominent disclaimer that indicated that the copied review was originally for a different product. The original product would be explicitly named and called out in the disclaimer on the newer product so consumers could compare the old and new product themselves.
This comprehensive solution threaded the ethical, legal and technical needles. It successfully led to these clients renewing their subscriptions. Product Management had again solved important issues to reduce churn and achieve that 13th month.
Summary
In supporting the renewal of the 13th month and beyond, Product Management was accountable to the business goal of avoiding churn, the long-term sustainability of the product, the ethical nature of its choices, and the applicable legal frameworks.
In all instances described above, Product Management came together with its colleagues in legal, engineering, sales and customer success to make holistic decisions about renewals that worked for the business, our customers and the consumers..
Jim coaches Product Management organizations in startups, growth stage companies and Fortune 100s.
He's a Silicon Valley founder with over two decades of experience including an IPO ($450 million) and a buyout ($168 million). These days, he coaches Product leaders and teams to find product-market fit and accelerate growth across a variety of industries and business models.
Jim graduated from Stanford University with a BS in Computer Science and currently lectures at University of California, Berkeley in Product Management.
