This document discusses how aligning internal team incentives can improve customer retention. It argues that most businesses do not properly incentivize retention across sales, marketing, and product teams. The key is to design team metrics around customer-driven goals like customer satisfaction scores and product usage, rather than just metrics like leads or sales. Aligning all teams to prioritize the customer experience can help make one major change to significantly boost retention.

1. Improve Your
Retention With
This One Change
David Cancel
SaaStock 2016

2. About David Cancel
• 5x Founder / 2x CEO
• CEO/Co-Founder, Drift
• Chief Product Officer, HubSpot
IPO: HUBS
• CEO/Co-Founder, Performable
acquired by HubSpot
• Owner/Founder, Ghostery
acquired by Evidon
• CTO/Co-Founder, Compete
acquired by WPP
• Investor/Advisor/Director to Various
Companies and VC Funds

3. One change can
improve retention.

4. Really?

7. Align incentives.

8. The most important rule in
management, ‘Get the
incentives right.’
-Charlie Munger
“

9. Simple, not easy

10. But …

11. Which incentives?

12. Two categories of
incentives:

13. 1. External

14. Align your pricing,
product, and promotions
with your customers.

15. 2. Internal

16. Align your teams and
departments to promote
customer retention.

17. There are lots of
talks about #1.

18. We’re here to talk
about #2.

19. Not what you’re
thinking…

21. So…

22. How do we align the
incentives of our
departments?

23. The best way to
change behavior …

24. … is to leverage
cognitive bias.

25. There’s only one bias
in this case.

26. But ideally you
should study all 25
cognitive biases.

27. (as described by
Charlie Munger)

28. “The Psychology of
Human Misjudgment”

29. http://cancel.im/25-biases

30. Today we are
discussing bias #1.

31. Reward & Punishment
Super-Response Tendency

32. If you would persuade,
appeal to interest and
not to reason.
-Benjamin Franklin
“

33. Incentives and
disincentives …

34. … rule everything
around me.

36. Few businesses
get this right.

37. How do you align
your teams today?

38. You are what you
measure.

39. But remember …

40. … there is a dark side
to metrics.

43. Are your metrics
aligned with your
customers?

44. (Most team
metrics aren’t.)

45. Sales?

46. Marketing?

47. Product?

48. Solution:

49. Customer-Driven

50. Design every teams’
metrics to incentivize
customer retention.

51. Examples:

52. Establish baselines.

53. NPS

54. eNPS

56. 1. Sales

57. Territories

58. Upgrades

59. 2. Marketing

60. Leads + Customer NPS

61. SDRs

62. 3. Engineering +
Product

63. Customer Service

64. Internal customers

65. Product’s Internal Customers
Sales Support Success
Engineer Tech Lead Engineer
Marketing

66. No product roadmaps

67. Product adoption

68. Usage frequency

69. Shipping to customers
daily

71. Monthly science fairs

74. One change can
improve retention.

75. Need help making
that change?

76. Check out what I’m up to at Drift.com