Churn

For sales folks, churn is a bittersweet experience. On one hand, it is like watching all the hard work you do disappear like so much water through a popped manhole. On the other hand - for once it’s definitely probably not your fault and you can blame someone else instead.

Churn is when customers leave. It’s like your best friend leaving because their new exercise buddy throws cooler parties. Basically, if you see your friendship as a subscription service (please don’t do that, that’s terrible life advice), churn is the rate at which your friends dump you for the new hotness.

Naturally, to maintain social cred, you need to make friends faster than you can lose ‘em. Similarly, companies that depend on the subscription model also need more new customers than they lose through churn. However, even if you have buckets of new customers, it’s always good to minimize churn, because getting new customers will always be more expensive than maintaining existing ones.

So what do you do to reduce churn (besides muttering under your breath about “Those idiots in…”)? Not a whole lot, but not nothing either. Ensuring a good customer-product fit, rather than focusing on making a sale as fast as possible (see our entry on the old ABC mantra) results in long-term customer retention and less churn. Just keep calm and carry on.

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TL:DR - Churn is the rate at which customers stop doing business with you. Think of it like a leak in a boat. Can you survive by scooping the water out (that is, getting new customers)? Sure, for a bit. But sooner or later, you need to fix the leak or James Cameron will make a movie about you.

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