Reducing churn in self-serve SaaS with Jesus Requena, VP Growth Marketing at Figma
On this FINITE Podcast episode, Jesus Requena, VP Growth Marketing at Figma, shares his incredible advice on customer retention, drawing on his experience in self-serve SaaS. He dives into the importance of reducing churn, why retention is more top-of-funnel than you might think, and practical ways to reengage waning customer interest.
This episode covers:
- How is marketing structured at Figma?
- What does the marketing funnel look like at Figma?
- Why do orgs need to retain customers in order to scale?
- Why should acquisition be about quality, not quantity of new customers?
- When should B2B orgs start thinking about retention?
Listen to the full episode here:
Hello everyone and welcome to another FINITE Podcast episode. We often discuss customer acquisition, tactics, channels, and strategies for growing B2B tech and SaaS companies here on the podcast. But today we're gonna be talking about the other side of things, which is customer retention and how to reduce churn.
I'm joined by Jesus Requena, VP of growth marketing at Figma, which you may know as a collaborative interface design tool. Jesus is an expert in reducing customer churn, specifically for self-serve SaaS companies. And we'll cover important points such as the importance of retention for scaling and the stage your company should start thinking seriously about retention, understanding why your customers may be churning and ways you can minimise churn.
It's gonna be a very tangible episode with lots of takeaways you can apply to your own marketing, so I hope you enjoy.
Before we continue with the episode, I'd like to give a quick shout out to our partner Terminus: The only account-based engagement platform built to deliver more pipeline and revenue through multichannel account-based marketing as the only native multichannel marketing platform. Terminus helps you convert target accounts through orchestrated campaigns using personalised advertising, email signatures, and chat bots. Visit terminus.com to learn why doing effective ABM at scale means better marketing.
Hello, Jesus. Welcome to the FINITE podcast. Thank you for joining me.
Hello Alex. Thank you for having me, excited to be here.
Yeah. Likewise. Excited to be talking. We have a really interesting one coming up, talking about reducing churn in the self-serve space, which I know you have a lot of interesting insights to share with our listeners. Before we do that, as we always do, I will let you tell us a little bit about your background and experience.
Yeah, so I'm Jesus and I spent the last probably decade working with companies that had some sort of freemium or bottoms up approach. And I've been over 12, 13 years in SaaS technology, trying to grow businesses and take them to market. So really specialise the go to market motion, sales-led product-led growth, and currently I'm at Figma, I'm the VP of growth market at Figma. And I'm really happy to be here with you today.
How is marketing structured at Figma?
Very cool job. I'm a big Figma fan. Tell us a bit about how marketing happens at Figma. What does the marketing team look like? How's it structured?
So at Figma, we have a really interesting setup because we don't have a CMO. We have a chief customer officer. Figma grew really rapidly, and I think the approach was to have anything facing the customer under one leader. So we had support, sales and marketing under Amanda, who is our chief customer officer, but we do have a marketing team. We have a pretty standard organisation, so coms, product marketing, brand design and growth marketing.
And then some international teams and communities, so growth fits under that leading the top of funnel effort and acquisition, helping the program and activation and conversion to pro and a big focus on the sales-led pipeline. So supporting sales-led pipeline, which a big portion of it comes from the existing user base.
Awesome. It's something we see more and more often. I think they're consolidating well, particularly sales and marketing under one leader often in the form of a chief revenue officer rather than chief customer officer, but actually chief customer officer sounds more, well customer focused, and a holistic approach than the chief revenue officer. I'm sure you've worked in all kinds of different organisations with different leaders at the top, from CMOs and others. But how do you find that structure of bringing everything under one roof?
I think it's very common for early stage startups. It's easier to manage on a scale cause you don't have bigger teams at the beginning and especially some of the POG companies bottoms up. Normally the growth on the human touch or sales lead is more upgrading customers.
So companies like Atlassian or others or Figma start maybe with more account managers or people that upgrade users until they mature to have a sales team. So I think it makes a lot of sense for early days as few scale it's hard to have such a big org under one. So as sales team mature and you want to have more outbound motions and things like that. So normally it's common to have a CRO or someone that leads that as the org grows.
What does the marketing funnel look like at Figma?
Interesting. As I mentioned, we're gonna be talking all about reducing churn in this self-service base. I realise that actually we're probably missing one obvious talking point before we dive in, which is maybe giving listeners for anyone that's not familiar with Figma, just a bit of a sense of the sales motion, the price points broadly, how you acquire customers first of all, cause I know we're gonna be talking about the importance of retaining them and how we reduce churn and stuff.
But I think obviously some of our listeners are in much more enterprise, thousands of dollars a month type sales motions, and some are in $10 a month type things. I think maybe that's an important framing for people to understand the Figma universe. So maybe you can give us a bit of a sense of what that looks like a Figma?
Yeah. I think Figma, like many other bottom set company, we have a freemium. So the whole go to market is driven by just acquiring users that see value on the free version and then they graduate and go from there. So the classic, I start with one user that is using it. They start to spread into a team, you start with the credit card, you start seeing real value.
And then within those, you have your classic, I'm just an individual that I'm gonna keep using the free. You have small teams that might stay with the credit card online. And then some of them, those that start with the credit card online might belong to larger companies that might be suitable for, or might be in need for some of the features of the enterprise product tier.
So that's where our sales teams and account managers jump into upgrading those into higher tiers, just to make sure that they're set up for success. So that classic journey of a company like, there's many, many like Figma, like the Dropbox of the world or the Slacks, but that's the way we go to market to be very centred into the user not the product.
Yeah. It's the best way. And I assume you see lots of people starting with, as you say, one free account and as you say, bottoms up. I've had someone describe it as the Trojan horse approach where one account gets you into the company and suddenly it's expanding outwards before you know it, so it's fascinating and I'm seeing more and more traditionally what you would think was more enterprise technology businesses trying to flip things around and go from very outbound sales-led set up and sell thousands of pounds a month or hundreds of thousands a year to the CTO and actually start adopting the bottom up approach.
Exactly. There's something really interesting about Figma, which is a really viral tool and there's not too many that has that virality. A user might start using it and they might create something on Figma, then share the URL or share the creation. And it's as simple as that, so that's really powerful.
And then what happened is that 20 people are coming in one, where the other tools that I work with in the past, maybe don't have such a massive virality, Dropbox and example, or maybe Slack. The group will be smaller at the beginning. Definitely other tools that work are like Algolia, they were more for reduces group within a company. So I think that variety drove a lot of the growth of, and it's a remarkable, beautiful growth.
I guess it's the advantage of being a visual tool that outputs something that probably by definition is going to be shared. And I assume people share stuff around and immediately get the question. How did you make that? And the answer is Figma and suddenly it's you get that viral loop, which is pretty cool.. Before we move on maybe you can give us a very quick sense of just growth at Figma and what the last few years have looked like, the overall growth of the team, company, whatever you can share. I know it's often one of those things that you can only share so much.
Well, Figma grew really rapidly. And I think the remarkable thing is that the user, because of that virality, we've been doubling on users for a long time, year on year and even faster in the early days. So the company grew from around three years ago less than a hundred employees all the way to today.
And we are like cross racing a hundred or something. So, very, very fast growth because of that community and that virality for the user and obviously similar trends on revenue and number of customers and number of paying users and whatnot.
Why do orgs need to retain customers in order to scale?
Cool. Well, let's talk a bit about this. This is probably an obvious point I think most marketers will to some extent understand, the importance of retaining customers in order to scale. But maybe you can tell us a bit more about the importance and how you look at things.
I think you and I talked before about the importance of making sure that you acquire and retain your customers. I think that's something that it's been pretty obvious to me seems like very early days when I started marketing and your company grows rapidly.
If you acquire the right customer, number one, especially if you're in more traditional B2B, but even if you're in a bottoms up, you just need to make sure that you acquire the right users and you manage the expectation of what the user is gonna do with the tool.
And then the second one is that you make sure that you match the expectation of those pain users, teams, or customer, whatever you wanna call them enable to increase the expansion rate. So that's something that you wanna keep an eye on, like are we expanding rapidly? Because the expansion really is equally important to the acquisition when it comes to growing a business.
So I'm fascinated about both understanding who the right fit is, even from the very early days. I talk to a lot of Series B companies and Series A, they get really excited about volume, but they, most of the time ignore the getting the right people in that they're gonna see the aha moment and really oh my God, this is a game changer for me. I went from all ways to the new ways with this thing. I think that's equally important.
If you understand those, then putting the teams and measures in place and data to understand are these people understanding the value in the first place? Are they sticking around? So retaining them both from a usage point of view on the freemium, but also from a paying point of view. So adoption of the features in the early days, and then be ready to renew and upgrade. So I'll love to explore that with you today, Alex.
Surely. Yeah. Yeah. And I mean, I think it is obvious when you say it that finding the right fit customer to begin with is the key to longer term retention. But actually I think in a lot of cases, that connection can be lost and that people view retention in, in isolation. And sometimes maybe that feedback loop to analysing who it is you're acquiring at the very beginning is sometimes lost. And a retention issue is seen as just purely a retention thing.
Like why aren't they using the tool or is it a problem with the product or is it a problem with account management or when is there a bigger, maybe more difficult, painful question that needs to be answered? Have we actually acquired the right customer to begin with? So it sounds like a lot of what you're doing is really completing the loop and going back to the beginning when you're analysing the data, which I'm sure we'll talk a bit more about.
Why should acquisition be about quality, not quantity of new customers?
Yeah, exactly. I made the mistake in my life where we were acquiring as many users as possible and upgrading them as much as possible. And then we realised that there was a return, it was a feed problem. And this is a classic also in sales-led companies where sales are just trying to sell sales, but they're not stopping to say, am I selling to the right people? Those are the people that are going to onboard properly.
You need to have the champion, someone that understands and is gonna see the value. And this is a classic in the growth stages of sales companies, where the sales teams don't truly understand who to go after. And they're just trying to hit their quarters and things can get messy really easily.
And then normally what you see is a symptom of low adoption of features and then starting to see the churn. And normally that's when executives come in like, why are we churning? And then you don't realise, is that an acquisition problem? So I would say the first thing to look is like, who are we going after? Are we selling to the right teams, user or companies?
That's the first thing that will probably mitigate the majority of your problem. And then the second one is to understand how to think, I think onboarding is critical. So if you sell into the right people, do we have an onboarding, whether it is human touch or tech touch through the product or through marketing touches as well? Those that really convey the aha moment.
So that first impression, which is I got it, I know what this is gonna solve for me. And then two that then you have a journey on the right users adopting the right features. So not every feature is for everyone and not every feature has to be adopted from the get go. So that's another thing that I see a lot where tools trying to onboard users to see everything and adopt everything.
I think it's better to break them down and say, what are the first three things these users should do in the first number of days? So almost break it down by number of days and maturity and feature that you should be adopting. That's sort of my thinking.
And then if you nailed that one and I'm trying to describe sort of high level framework, but if you nailed that one, the next step is some uses might need extra help because they didn't do that properly. So you want to have some sort of retention mechanism where you understand which ones are going from green to maybe in risk or gone dark, I call them.
Which is like, they got no usage or low usage and then to have reactivation mechanisms to bring them back. And that's normally sometimes overseeing where companies try to bring more in versus trying to reengage people that maybe are about to, or have disengaged.
When should B2B orgs start thinking about retention?
Right. That's interesting. We can talk a bit about some of those in a sec. I'm interested in the stage at which a company should be thinking about retention. Obviously we see B2B tech businesses starting marketing growth generally at different stages, depending a bit on the nature of their product and sales motions and stuff.
But is there a point where you think retention is more important or is it really something that should just be completely built into everything the marketing team is thinking about from the very start?
Assuming that you have nailed your acquisition from the very get go, and I'm gonna recommend you do this from your seat from the very beginning. I think the onboarding has to be addressed very early too. I think there's very little products that are so self explanatory that you might not need onboarding.
But as soon as your product has a bit of complexity, and I work with very complex products like Figma, I think Algolia was a complex one, was an API for developers. So it was hard to set up. It requires a group. Unity was extremely complex. You need to know C sharp and C plus plus, and you need to be a developer and there's a group of people working.
So as soon as your product is complex, you want to have a great onboarding flow in the product. Ideally, if it's a freemium and also outside of the product. So at Unity, we didn't have much onboarding of the product for many years and we had a massive drop of users and we couldn't solve it properly until we started doing some more templatised onboarding in the product, which is hard to get started.
So there's a lot of products out there where you get in, and it's a blank canvas. You might have a few tips here in the product, classic tip things, but it's a really blank canvas, I think, unless it's extremely easily to set up like Dropbox, we're just gonna drop some files in there and create some folders. I mean, how much onboarding you need with that, at least to see the immediate value I'm talking about, so unless it's really self explanatory, you need some sort of starting point where the user might through templatize, or guided onboarding, understand how to see the value very quickly.
And I guess, again, that's one of the advantages to a visual tool. That's got visual output and designers that you can build lots of resources and templates and all the different assets that people might be signing up to Figma to create. Part of your marketing is focused on that kind of thing, right?
Yeah. I think we are doing it. We have a bunch of collections for users. With our new product FigJam, we spend quite a bit of time, the last six months developing a lot of templates for the user to get started with the templates. And most of our acquisition journeys are now these days guiding through that template environment versus a blank canvas. But Canva is another company that has nailed that one.
So you have a lot of companies out there that really have nailed it. I think Twilio did a good job too on having sort of that code exchange for the developers so they can see a lot of examples that they can start with. There's a lot of companies that have great examples out there where you bring in users from a starting point where they can understand the value very quickly and then build their own from there.
Yeah. And I guess it becomes like an SEO play sometimes too. If people Google like business cards template or something, and suddenly a design tool has one and they can get started and you've acquired a user through organic search or something and given them an asset and onboarded them, those resources can be pretty powerful.
Absolutely. And I think the beauty of it, Canva is a great example. We do it at FigJam. There's a lot of companies out there that if you nailed that as your point of view, and you really understand that acquiring a user with an intent to do something is better than just acquiring a user, your acquisition engine becomes way more powerful.
So all the time you can do campaigns around a specific persona, a group of personas that want to start with an intention already to do something in the product. I think that's really powerful. Because then you immediately allow the user to understand the value faster and then maybe build from there.
Yeah. It's very cool. I imagine you've got case studies probably somewhere deep within the data where someone's Googled like a poster template. And one user has signed up to design a poster and suddenly there's a year later big enterprise license and the whole company's using Figma or something. It's pretty cool when you think about it like that.
Yeah, exactly. And the word of mouth, I think the virality is a really big one too. So part of that is you must start with a little temporary collection or something, and then you immediately share, and then you grow from there. I think Figma is one of our main core growth engines.
Where should B2B marketers start with reducing churn?
So if a marketer thinks that they've got a churn problem for you, what's the first step to understanding kind of why customers churn that you probably touched on a couple of bits already, but I think anyone listening that might be feeling like churn is potentially an issue, where's the best place to start?
I'll do two things. I will start making sure that your onboarding, as we mentioned, is solid. So maybe start understanding why users are not seeing the value in the first place. And then could start from the new user acquisition.
So you have a freemium tool, make sure that when the users come in, just ask them in the product or ask them outside of the product, do they see the value? If not, why didn't they? And there's many ways to ask that to a user. And then if you nailed that one, and let's say that you are getting a lot of people seeing the aha moment and understanding the value and then turning it into paid. But the second point I will start questioning is are they adopting the right features? And if not, why?
So I'll start making some surveys or pulses again in the product to understand how that data can help with the behaviour. And I've done this in my previous companies as well, where you look into the patterns of a champion user and see the actions that they take to adopt the features. And then you compare that with the ones that they're not adopting the features, and you might see missing gaps that they're not doing.
So, there might be a step that they're not completing or actions that they're not taking, and that might help you understand where to boost them. I think Wes, in the PLG book, he talks a lot in the onboarding of your champion uses and your rookies. So there's always gonna be a little percentage of those champions that they're gonna spend any time needed to nail your tool, but there's gonna be a cohort that they might give up easier if you don't give them a little push.
Those are the ones that you want to focus on and you want to understand what are the behaviours that they're not doing to boost them to do that through onboarding on the product, onboarding outside of the product. So we'll nail that one. Again, questioning the user, understanding through data and building some onboarding flows. And if you have nailed that one, I'm gonna assume that you've nailed those two.
Your churn should be pretty reasonable at this stage, but let's say that those are nailed and then your customers are paying and then churning, I will do the same with the paying onboarding. So you might have features on the paying stage and you want to do exactly the same as the freemium tier. If you don't have a freemium tier, you just wanna do it there.
But once you have nailed that, I think it's a matter of understanding the way we did at Unity for example, was we haven't got yet here at Figma, but we did some modelling on where were the actions that indicate that someone might come into an activity in the next 30 to 90 days?
So we almost identify like, if I used to start having this behaviour, most likely it's gonna start decreasing activity. And normally the decreasing activity leads into churn. So you don't wanna mitigate the churn when it's done. You wanna start mitigating the lack of activity to then avoid the churn.
And if you get to understand what things they're not doing, or what things lead to inactivity, you might wanna put programs in place to mitigate that. So we have a lot of reactivation flows where if I start doing these things and then the client will try to bring them back into the product to incentivise them to do either the feature that they didn't adopt or come back into something that didn't finished.
And again, you can play all the content that you wanna do in there, like templates, example invites appear, whatever you have to do to get them back into the product. Normally that will mitigate a lot of the churn. And then the last resort is obviously going back into already inactive users or churn users, but I don't recommend you start there. A lot of companies start directly there and probably you're gonna move the needle very little compared with the other early stages that we just described.
And I mean, hearing you say all of that makes me realise just how much data is involved in this and how actual product usage data is so key. And I guess again, depends a bit on the organisation, but marketers and product teams in certain environments as marketing generates leads and hand them over and that's in this environment, you're really looking at how the product is being used on a regular basis to build the picture of when usage might be dropping off or, as you said, what the most engaged users do, how they behave.
I assume you're using some sophisticated products, analytics type of stuff to do that, but are there other tools that you use or any other tips you've got for gathering churn data generally, beyond just product usage data?
Well, I think you should start gathering your product behaviour data. So all those events, collect them and use your segments and your customer data platform understand that at a granular level. It is important to map the right themes in the product.
So what are the actions that we really want to monitor, whether that happens or not, and create some sort of milestones. If you have that data correctly, that plus the qualitative data that we mentioned before is important to have some sort of tools that you can ask people in the product or outside of the product. And there's many out there, from the Pendos of the world, to there's actually specific pull tools that you can use in product.
And if you have that, then the second thing you wanna start probably doing is collecting some sort of that survey data to understand like, you didn't complete this or you didn't do that. Like tell me more about what was stopping you to do that, to start gathering that, and then analysing that in different dimensions. Like what stage in the journey were these people, the action that they took in the product or not. And then if you want to get more sophisticated, I think having a data analyst from early days helps a lot.
So probably a data scientist that can help you start modelling things from early days. So the best companies I've seen out there have the behavioural data map in the really early days, collected accordingly in some aggregated level. And then they bring data scientists to model that in from very early days, not just to map and report, but also to start modelling like what is happening. They don't wait to be like a 200 million company to do that.
They start from very early days. And then on the churn data you mentioned, I think again if inactivity happens, I think it's important to start asking the users what happened, right? And I start collecting that data to start giving you some sort of insight. So I'm a fan of doing that when at two points are an activity point and at the paid churn or complete user churn point.
So if the user has becoming inactive for a period of time, go and ask them, if the user has never come back, maybe ask them if the user is paying and churns for real or not downgrades or upgrades or anything, like literally gone, you want to ask them immediately, what happened? And probably the best way to do it is not after the fact, it's at the time on the paid churn, at the time they want to cancel the subscriptions.
So have a little pull on your tool that says like, sorry to see you go, tell us the reasoning behind something simpler, you can collect data. I think that, plus the behavioural data, will give you a really good understanding of what is happening. And then obviously, like any company, it doesn't matter if it's a bottom up freemium or whatever, talk to your users.
Do you have any practical examples for re engagement?
Good advice. We talked a lot already about some of the solutions you found for reducing churn. And we've talked about the importance of the onboarding process. Maybe you can talk a little bit about some of those win back programs, the ways of reengaging, any practical examples, that kind of thing?
Yeah. I think that I learned over the years, and two might be different, but I learned over the years that if a user doesn't see the value, so if they're paying, the pricing becomes a problem when the value doesn't suppress the pricing, right? The example of I might be paying for a storage solution or a tool, I don't use it much and I'm paying this bill and I'm like, well, is that worth it? Cause if you're using it, you're gonna keep paying.
So the best win back or retention program that I've seen is to either, one reinforce the value, so give them love, give them additional resources or things that they might value to them. So this might be a free paying template, might be a free asset. So at Unity, we did a lot of, one of the best assets we will give them for free is like, here's something to incentivise you, giving you for free this paid asset for you to get started on a new project.
So those types of things, incentivising them, work really well. And I'm talking about people that might have gone inactive or might have churn. And on the paying churn thing, it depends on your tool, on your internal policy, but some sort of incentive. At Unity, we tried a lot of things like incentives at our pricing level. So stay with us and we'll give you a couple of months for free, but the best ones will actually give you then a bundle of resources. So like a continuous subscription.
And you give an additional set of resources that you can pick from. So again, we let them pick up a bunch of visual assets to start a new game or improve their game analytics or whatnot. And they could pick from a list of them and say like, this is great. I can keep going. It's almost like an incentive. Imagine that you are a game and you're going, and they send you an email and say come back, we'll give you a free lesson with a trainer to get you incentivised again. I think those are the best incentive to bring people back. But again, each product's different. Each company has different policies around where to use a discount, where to use free stuff.
I guess we could, we could probably do a whole other episode on pricing theory, but the interesting perception of reducing costs and maybe reducing the perceived value by reducing costs and then adding value by sharing resources and assets and to completely different perceptions of value potentially. As you said, it's almost more effective than the other... Interesting.
Maybe to wrap up, I'm conscious of time, but there's a balance between the technical stuff and the human stuff. And you know, the data, obviously there's quantitative data, qualitative data, how much of this is about human contact and obviously you can't scale that beyond a certain point. And any valuable, for bigger accounts, but how do you find that balance between the more manual human quality of stuff versus the more data driven automated stuff?
That's a great question. I think it depends on the average lifetime value of the user. If your tool has a really low lifetime value, meaning it's in the hundred, couple of hundred a year, it's hard to put a human on the onboarding or the retention side. But if your tool is made by teams and the average value is in the low thousands of dollars, it works really well to have both in the onboarding and reactivation or retention.
I call it a tech touch plus human approach, which you might automate the onboarding, but there might be a human behind it. And that will be for selected teams or customers that have LTV potential. And literally what you do is you allow them to talk to a user, to a human if they need to, so they can reply an email or chat or some tools actually do it in the product. I've seen some tools that allow you to talk to your buddy from the company directly about the product. I think those things work because it brings the human part of it to the company.
So a human can reply very easily to say, actually have a look into these and it could be templatised and whatnot, but have a look into these. What about we give you these? And that normally has better traction than just the fully automated.
Yeah. Yeah. Good advice. I mean, I think there's nothing worse than getting an email from a no reply at company name, email or something. So there's ways of automating this stuff so it feels human. And if they respond, it goes to a real human and a real human then responds, but equally you can achieve some scale with automation.
I think we're getting to a point in the world that I think we are a bit tired about dealing with bot automated stuff.
Yeah. We've covered a lot. It's been fascinating. I feel like we could go on for another two hours, but we have to draw a line at some point. So I'm gonna wrap things up there and just say a big thank you for joining the podcast and for sharing everything. So, thanks again, Jesus.
Thank you, Alex.
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