When it comes to customer churn, there are two kinds: avoidable and unavoidable.
But I guarantee that the amount you label as “unavoidable” is actually much smaller than you think.
I know, but…
“Most of our churn is out of our control, so it’s unavoidable”
“We sell to SMB and in that market churn is inevitable.”
Accepting that churn is inevitable since x% of companies fail every year is like saying why workout, you’re just gonna die anyway.
But the excuses continue…
“We have a low price, so of course we have high churn.”
“We sell to [a certain market segment] so of course churn is high. That’s just how this works.”
“We sell to a very transient market, so of course churn is inevitable”
To paraphrase a monologue from this Seinfeld episode:
“No matter how desperate we are that someday a better customer will emerge, with each notice of cancellation, we know it’s not to be; that for the rest of this sad, wretched pathetic quarter, this is who we sell to, to the bitter end. Inevitably, irrevocably; low churn? No such thing.”
The catalyst for this post was what Gainsight CEO Nick Mehta said on a webinar the other day on Budgeting for Customer Success in 2015 (check out the archive here), so I thought I’d invite Nick to elaborate on this a bit since SO MANY SaaS – and other types of companies – make this costly assumption.
Take it away Nick….