Speaker 2
That's interesting. And I guess it sounds like, so the product is just, it's one price. It's $30 per month. That's a dollar a day per user. So also, there's not a free version. So you're trying to get that commitment right up front. Now, I guess that this very heavy touch, I mean, you certainly there's a cost associated with that building out a team of, do you call them sales or what do you call these people that are doing the onboarding? On board
Speaker 2
Beyond boarding specialists. So there's certainly a cost associated with that. And that is going to increase your customer acquisition cost. But then the benefit is, of course, the greater lifetime value from lower churn rates. How much analysis have you done to weigh the pros and cons of bearing the higher CAC, but then having it be justified by higher LTV with those lower churn rates?
Speaker 1
Yeah, a fair amount of analysis. One thing I will add, we do have other price points for educators, students, charities, non-profits. It's considerably cheaper. 66% discount. So $10 per month instead. But yeah, $30 is the sort of list price. Yeah, so onboarding cost and lifetime value. Yeah, we've done a decent amount of analysis on that. You know, I can't give you the exact numbers here, but suffice it to say that there is a meaningful step up from what we've seen from having the onboarding in lifetime retention as measured by lower month zero churn, lower month one churn, lower month two, three, four churn, and to the point where the lifetime value is sufficiently high, that it makes sense, at least for this phase of the company for us to have the onboarding. I'd also add that the cost of acquisition might seem like it's quite high, but actually is relatively small as a percentage of typical marketing budgets in SaaS. Right. The way that that works is when you have an onboarding that is half an hour and you're asking customers to schedule using a tool like Calendly, you can actually do somewhere between eight and 10 or even 11 onboarding calls in a given day, which means that you can actually get up to around 40 in a given week. And so when you are doing that many calls and such a high number of those customers are not just retaining, right? We're not just talking about keeping them paying. They actually love it, right? They're going on Twitter and talking about how great it is. The cost of acquisition becomes small because it's a relatively efficient process and there's the bump to LTV. Now, is that the be all and end all? You know, am I recommending that every company out there should go and do this? No, you know, I think that it would be myopic to say that one way is the only way. I actually like to use the analogy again to Apple in this regard. I like to sort of point out the retail experience at Apple, in particular, the genius bar. You go in to Apple and if you don't know what you want, if you say, well, I think I want an iPad, they might actually ask you a couple of questions and they say what you really need is a MacBook Air and here's why and they'll walk you through it, they'll hand hold you, they'll guide you towards the purchase. So Apple is bearing the cost of, you know, I don't know how many thousands, tens of thousands of retail store employees, genius bar members, educators, trainers, etc. But they will add to the Apple experience. It's so different to the experience of another computer manufacturer or technology company. You don't have that from any one other than Apple, but it's part of their experience. But is it Apple's only experience? Well, absolutely not. You can go on their website, like I mentioned earlier and just buy an iPhone, right? Like, you know, businesses are purchasing MacBooks by the dozen for their new employees without needing to go and talk to someone. So my recommendation is to think about what are all the different kinds of customers you have, what are their needs, and setting up onboarding flows and systems that are going to work for those different customers. And you're going to have customers who will need hand holding and help and, you know, workflow migration, etc. You're going to have customers who are impatient and just want to get going. They want to make a purchase as soon as possible. And how do you find the right pathway for those customers? You know, I think Apple's done a really good job. And I think that's more companies should be thinking about this.