Tip 11: Churn
In this episode, our experts explore effective strategies for reducing churn, which in turn leads to lower Customer Acquisition Costs and increased revenue. Learn how to identify the root causes of churn, implement targeted retention initiatives, and create a customer experience that fosters loyalty. With practical tips and real-life examples, this episode will help you tackle churn head-on and set your business on a path toward sustainable growth. Don't miss this essential guide to combating churn and maximizing revenue!
Welcome to 20 days of pricing tips—part 11. I’m Alexa a member of the pricing team and I’ve worked on over 36 pricing projects. Today we’re covering Churn.
SaaS companies should analyze churn frequently and accurately as increased churn leads to higher CAC & reduced revenue. It's not surprising that acquiring new customers is considerably more expensive than maintaining and upgrading existing customer relationships.
The more customers you churn, the more money you must spend to recoup the loss of business by finding new ones. CAC eats away at essential revenue and fundamentally works against financial growth - the lower you can keep it, the better.
There is one good kind of churn, however, and that is "negative churn". Negative churn is when your expansion revenue from all existing customers outweighs the revenue lost from existing customers over the same period. Negative churn means that every month, high yields will be coming in consistently from your customer base because it's a hugely powerful growth driver.
Thanks for checking out our pricing tips. If you want to connect with our pricing team email me Patrick@profitwell.com and we’ll send over the intro.
