Churn is a drag on growth. Churn hurts company valuation. There is no good reason to have churn in your business.
I did an “Ask Me Anything” on Slack as part of the build-up for my “Building an Engine of Growth” Workshop and Keynote at SaaStock 2016 in Dublin, Ireland and it was awesome… until the last question, which started out like this:
“I’ve always felt like Lincoln’s recommended churn rates are, in many cases, unreachable.“
Oh no… and I’d been having such a great time until that point. He went on to say…
“Yes, I understand low churn rates are best for business, but realistically, how many companies actually do have 5% annual churn instead of what I more commonly hear which is closer to 5% monthly (painful, but technically survivable).“
Who starts a business to just “technically survive.” WTF?
Well, even though what I talk about is unrealistic, he still wanted to know how to lower his churn from 5% per month to, you know, 1 or 2% per month.
Okay, so I composed myself and addressed his question… and I thought it would be useful to you, too.
But first, let’s get clear on why so many people think near-zero churn is unrealistic; they’re trying to justify negative results by blaming the customer instead of owning their failures.