When churn keeps you up at night (your investors too)
Not all churn is created equal…except that all investors hate all churn. There’s little worse than working hard to get the right message in front of the right prospect with the right technology and close the deal, only to lose that customer 6 months later. Wasted time, effort, resources, reputation and opportunity cost. It’s no wonder investors are so bearish on customer churn and CEOs should be too.
Many customers don’t even realize what they bought in the first 30 days and that is often a reason for that early churn.
Understanding the “when” of churn is often an overlooked component. We’ve all seen triangle tables of churn by cohort, but how often do we really dig into the “when”? Customers that churn in the first 30 days do so for very different reasons than customers that churn after 12 months. Too often we jump straight into product functionality or our PLG process to figure out what was missing on our end and try and fix it.
I’ve been surprised how many times companies don’t separate even these two ends of the spectrum – the almost immediate ( < 30 day) churn from the longer term (12+ month) churn. Many customers don’t even realize what they bought in the first 30 days and that is often a reason for that early churn. If a customer has been using and paying for a product for 12 months, they clearly know what they have and there must be a different reason – functionality, price, etc that is driving their decision to make a change.
You still need to unpack the “why” of churn, but if you try and apply a single “why” without looking at the “when” first, you will spend a lot of cycles with limited success. Take a quick moment to look at the “when” and it will help your “why”.
