Earlier this week, San Francisco-based Brightback announced it has raised $11 million to fund its customer retention automation software platform designed specifically for subscription businesses. The software startup helps reduce customer cancellations and improve sustainability for companies like SparkPost Crazy Egg, Copper, GitBook and Mailshake. Brightbacks Series A funding round was led by Index Ventures. Point Nine Capital, Matrix Partners and Rembrandt Venture Partners also participated in the funding round.
As an industry, we’re hooked on growing through acquisition alone, even though retention, not acquisition, is the bedrock of successful SaaS and subscription growth, said Guy Marion, CEO and co-founder of Brightback, in an April 23 news release.
Businesses aren’t sharing that they typically see 30% to 60% of their customers cancel every year, which is eating away at growth. Brightback is the way out of the acquisition-at-all-costs mentality. Were here to help companies leverage automation to enrich the user experience at critical points in the customer journey and retain users at scale, added Marion.
Through its customer retention automation platform, Brightback helps customers to identify and segment at-risk customers, tailoring experiences such as personalized cancellation pages, to try to retain those customers. Within two months of using Brightback on a trial basis, pilot customers reduced cancellations by up to 20%. Six months later, 67% of those customers are still doing business with the subscription companies. Brightback was created in 2018.
In a testimonial, Suneet Bhatt, general manager of Crazy Egg, shares his companys experience with Brightback.
To win on experience today, you need to pay attention to customers throughout the lifecycle and be in a position to respond quickly to any opportunities to expand or save customer relationships, said Bhatt. With Brightback, we deflect one in four cancellation requests. More powerfully, we segmented all churn events and found that 40% are preventable. We restructured our team to jump on customers who never onboarded correctly, or need more time to learn, with a target of saving tens of thousands of dollars every month.”
Shardul Shah, partner at Index Ventures, also commented on Brightbacks competitive advantages.
Intensely focusing on the customer is the most durable strategy to building sustainable growth and long term profitability, said Shah. Brightback collects and analyzes data on why customers might cancel and automates processes to drive retention. They have an incredible opportunity to be at the heart of every subscription company.
Another competitive advantage of Brightback is that it integrates with other applications including Zendesk, Slack, Salesforce, Intercom, Segment and Zapier. This helps subscription businesses to create automated customer retention workflows. Brightback also provides metrics and insights in real-time to support subscription businesses in learning more about their customers.
Though the company is in its infancy, the concept behind what Brightback is trying to do is solid. Many subscription businesses focus on customer acquisition. While a key component of any subscription business, retention is an important long-term strategy. After all, it costs far less to keep a customer than to acquire a new one. Brightbacks technology helps businesses learn more about their customers and then uses automation and insights to help subscription companies keep customers who are at risk. Preliminary results are positive so far.