Do you fully understand the true cost of churn in your business? In this video, I'm going to teach you how to understand and fix churn, and why it's hurting and potentially killing your business. DOWNLOAD:Churn Buster Cheatsheet™ - Stop The Bleeding & Scale Your Marketing With Confidence -
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And it goes like this:
How much is it?
- It's not that bad…
Look, it's simple. Just give me a number. OK??
- It's 20% - not that bad, right?
WOW… Your churn is 20% monthly?
*issues a small prayer to all the SaaS gods*
The above is a conversation I recently had with a potential coaching client… GOOSEBUMPS!
Let me put this into perspective...
If your churn rate is at 20% and for one reason or another you fail to add any new customers... in just 5 months... you will churn through all of your existing customers and be left with nothing - simple math.
The worse part, it pulls down your Lifetime Value of a Customer so it makes it really tough to invest in growth and is usually the reason startups fail.
You should always know exactly where you're standing on your churn levels and you should be doing the best you can to fight these levels back and get that MRR up!
You should make sure you UNDERSTAND CHURN!
In this episode of the Growth Stacking Show, I give you the 4 things you should pay attention to and stay on top of to make sure you stop the bleeding and SCALE-UP!
At a high level, these are the 4 things you need to keep in mind:
1. Churn Flatline
2. Maximum Viable Churn
3. Moment of Churn
4. Fight the Impact
Now…
Where does it all begin? It starts with answering one simple question… What does churn mean?
If you cannot define it - you cannot measure it… and you absolutely need to define it!
You don't want to find yourself in a situation where your customer success team is measuring something else entirely that skews your data.
Start with something simple. Usually, there are 2 types of Churn - one is Cancellations and the other is Involuntary Churn.
Involuntary Churn can be 20%-40% of your Churn and a lot of times is quite easily fixable.
There will be times where it is caused by simple payment failures and these ones, as frustrating as they are, can be tackled with great tools such as ProfitWell or FlexPay.
Cancellation Churn's moment, on the other hand, is well defined - it's when a client doesn't renew their subscription.
Between the notice and the renew date, there is a period of time that you can really engage with the customer and save the account.
If you implement a strong cancellation process you can save 30%-40% of these clients. A lot of times it's up to downgrading, showing the solution, talking about their problems - SIMPLE, RIGHT?
You have to sit down and define the moment of churn with your team. Get aligned. There are things you can always do and improve and this is one of them. You need it to blast into space!
Don’t worry, it’s a solvable problem and I give you the strategy in my Churn Buster CheatSheet. I provide 9 strategies that you can deploy today to help you reduce your churn.
If you cannot find the solution for your business there - write a comment below with your question and let's get the answer your business needs together.
Dan “busting that churn” Martell
Don't forget to share this entrepreneurial advice with your friends, so they can learn too:
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ABOUT DAN MARTELL
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“You can only keep what you give away.” That’s the mantra that’s shaped Dan Martell from a struggling 20-something business owner in the Canadian Maritimes (which is waaay out east) to a successful startup founder who’s raised more than $3 million in venture funding and exited not one... not two... but three tech businesses: Clarity.fm, Spheric and Flowtown.
You can only keep what you give away. That philosophy has led Dan to invest in 33+ early stage startups such as Udemy, Intercom, Unbounce and Foodspotting. It’s also helped him shape the future of Hootsuite as an advisor to the social media tour de force.
An activator, a tech geek, an adrenaline junkie and, yes, a romantic (ask his wife Renee), Dan has recently turned his attention to teaching startups a fundamental, little-discussed lesson that directly impacts their growth: how to scale. You’ll find not only incredible insights in every moment of every talk Dan gives - but also highly actionable takeaways that will propel your business forward. Because Dan gives freely of all that he knows. After all, you can only keep what you give away.
DOWNLOAD:Churn Buster Cheatsheet™ - Stop The Bleeding & Scale Your Marketing With Confidence -
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