Questions

Retention (aka churn). This is the most important because it drives all other decisions around sales, marketing and product. If churn is high it's because: a) sales people are not setting expectations properly (e.g. selling too much sizzle and not enough steak); b) your marketing is bringing in the wrong type of customer; c) your product doesn't solve a big enough problem/pain point for your customer.

It's also the key to forecasting; if you can accurately predict churn, you know how much you need to sell, how many leads you need to generate, etc. etc.

Don't wait, track this asap. And don't fake it (like Salesforce.com used to say, oh, we have less than 1% churn per year, when they were actually tracking the % of customers that don't renew contracts). That's not churn; people cancel or stop paying ALL THE TIME. As soon as you know you're not going to get money again from that customer, they've churned, track that end date right then and there.


Answered 11 years ago

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