Most churn is unnecessary…and deadly to your business
By Jim Logan • Jun 22nd, 2007 • Category: Customer Loyalty
When I think about the number of services and subscriptions I've canceled or failed to renew over the years, my first thought is how unnecessary it should have been. In the overwhelming number of cases, the company I severed relationship with could have kept my business, if only they cared about my business and didn't take it for granted.
There's the phone company that lost my business who waited until after I called to terminate my service to offer me a package to lower my bill. And the news weekly which offered to lower my subscription price months after I failed to renew. I subscribed at the higher price for two years…and haven't subscribed now for over three. I'll never forget the 500 company ending a string of multi-hundred thousand dollar a year purchases in great part because a sales rep hadn't called on them in over a year. All were unnecessary.
Churn can kill a business. It's part of the customer acquisition challenge - the more customers you lose, the more the pressure to chase new customers. For many companies, you can't get new customers fast enough to make up for the one time buyers and lost customers you already have.
I've worked with and for a number of companies who missed the key message in this post and paid for failing to understand: You need customers and repeat business to have a business.
There are exceptions, but exceptions are just that.
Repeat buyers provide a base of revenue, level of protection against lean times and time to cash that can't be replaced and should never be taken for granted.
What do you think?
