HOW DOES CHURN AFFECT GROWTH?You work hard to win new clients, but are you prioritizing retention?
High Churn Rate Cripples Long Term Growth
A service business client was spending $1000 per month on advertising, paying an average of $30 per lead, and converting 20% of leads into customers.
Our models determined their average monthly churn rate is 3% and average monthly revenue per customer is $254.33.
We forecasted the long term outcomes for 3 monthly churn rates: 1.5%, 3%, and 4.5%.
Reducing churn by 1.5% increases Customer Lifetime Value by over 50%. In this example, that means losing 2 fewer customers each month.
In this case, the client realized hiring a customer service manager to improve retention provided a long term ROI.
Calculating accurate churn rates is impossible without KPI tracking.
Not Getting Accurate KPIs?
Sign up to speak to one of our implementation experts, spend 30 minutes talking about your business, and leave the conversation with a step-by-step process to save time and money with better KPI tracking.
No cost, no obligation.
HOW DO WE HELP?
questions we answer
- How do you anticipate when a customer might leave you?
- What lead sources are bringing you the types of customers that are a good fit for your business.
- Which customers are profitable enough to offer discounts or refunds when needed for retention?
how do we do it?
- We track your service logs and history so you can see potential problems with customer accounts before they happen.
- Our metrics dashboard organizes your service appointments in order of profitability so you can see your high priority customers.
- Our models calculate churn rate if you don’t have it measured accurately.
Customer Lifetime Value
The average amount a customer spends with a business over their entire lifespan. Increasing frequency and transaction size, and decreasing churn rate, increase CLV.
Profit per customer x Average customer lifespan
Cost per Lead
The average cost per new lead.
Total marketing spend/Total new leads
Leads Closed %
The percentage of new leads that become customers.
Total new customers/Total leads
Measures the rate customers cancel service, close their account, or otherwise leave your business. Improving customer service typically reduces churn.
Lost customers/Total customers