The 3 Steps to Near-Zero Customer Churn

September 20, 2016

4:30 pm

In the startup world, everyone wants a low churn rate. But everyone has a high churn rate. Like plenty of other holy grails of starting a tech company, like rapid growth hacking, a healthy culture and fast scaling, keeping a low customer churn rate takes a lot of hard work. Here are the three goals to keep in mind as you work at it, thanks to a recent post from Lincoln Murphy on the myth that no company can consistently hit a low churn rate.

1: Get Good-Fit Customers

Get the audience that loves your product and care about it. Like I said last paragraph, these steps take a lot of work. It’s not exactly a secret that you want customers who are a perfect fit for you. However, what some people forget is that getting only the good-fit customers means intentionally rejecting the bad-fit ones.

People hate turning away customers even when they’re terrible. After all, it means inflated numbers. But you still should. Think of it as the pre-churn. If you get rid of potential bad-fit customers before they get rid of you, you’ll more than make up for it with the energy you’ll save by not needing to attempt to convince them to stay with you.

2: Clearly Explain the Desired Outcome

You’ve got the customers. Now you need to tell them what they should expect from your relationship. This can be broken down into two sections, as Murphy explains:

“The Desired Outcome of your Good Fit (Ideal) customers […] is made up of Required Outcome, or what they need to achieve, and Appropriate Experience, or how they need to achieve it”

3: Tailor the Experience Towards That Outcome

Streamline the whole process, from the marketing and sales funnels to onboarding to customer support. It should always be clear and deliver the value you know the good-fit customers will want. Rely on feedback for this step and constantly reevaluate to ensure you’re up to snuff.

In the end, Murphy asserts, the amount of truly unavoidable customer churn is likely far lower than you think: near-zero churn is practically never entirely unattainable.

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Adam is a writer with an interest in a variety of mediums, from podcasts to comic books to video essays to novels to blogging — too many, basically. He’s based out of Seattle, and remains a staunch defender of his state’s slogan: “sayWA.” In his spare time, he recommends articles about science fiction on Twitter, @AdamRRowe

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