This article is part of series on how you can kill churn and increase Enterprise Value and is related to our other posts, “The Hidden Cost of Churn to Enterprise Value” and “How Much Enterprise Value Did You Lose to Churn in the Last Year?”. In this this article, we’ll talk about why customers leave and what you can do about it!
Why do customers leave?
Countless studies opine on why churn occurs with at least 58 different reasons identified for why customers leave. “There Are Only Two Reasons Customers Churn”, “The Big 3 of Customer Churn”, “Eight Signals to Watch”, “The Ten Reasons Customers Churn”. It seems like everyone has useful insights, but none of them can agree.
When I reviewed the research in detail, I uncovered some important findings.
- 86% of Churn is Controllable and Avoidable. This is customer churn that was within the organization’s sphere of influence and could have been mitigated.
- 12% of Churn is Uncontrollable and Unavoidable. This occurs when a provider leaves the market or the customer leaves due to a company issue.
- 2% of Churn is Unintentional. This is when a customer cancellation occurs unintentionally, most frequently due to automatic billing issues.
What does this mean?
The Good News is 86% of Customer Churn is Within Your Control. And, more than half of all churn has one root cause and multiple contributing factors.
The #1 Root Cause of Churn on which You MUST focus is: Customer Value and Return on Investment.
The #1 Root Cause of Churn on which You MUST focus is: Customer Value and Return on Investment. This is when customers not only achieve the value and return for which they purchased the solution, but they confirm they have.
The lack of achieved value and return is why 46% of all churn occurs.
The lack of achieved value and return is why 46% of all churn occurs. Contributing factors are lack of adoption and utilization; poor implementation and onboarding; poor customer service and support; and, lack of relationship, trust, and chemistry, and more.
Focus like a laser on ensuring your customers achieve value to expand your business and grow your Enterprise Value. Unless you get this one thing right, nothing else really matters.
In my next article, I’ll share the strategies you can immediately implement to increase Customer Value / Return on Investment.
In the meantime, it’s imperative that you stop your customers from kissing you goodbye and start growing your Enterprise Value! Set up a 30-minute meeting or check out our Customer Success Assessment to get started today! What do you have to lose?
Infographic: It hurts! Why your customers kiss you goodbye
Questions? Comments? Please share your thoughts below!
Bob Dunn is the CEO of Dunn Growth Experts, an industry leading consultancy and online consulting provider. With 35 years of experience growing revenue, they offer fast turnaround and high-quality consulting for businesses and individuals. With a mission to help their clients meet and exceed revenue growth and value creation goals and expectations, Dunn Growth Experts has helped US and international organizations grow their success.
For more information about Dunn Growth Experts, please visit: www.dunngrowthexperts.com
Keywords: Enterprise value; consulting; churn; customer acquisition; customer retention; revenue; Dunn Growth Experts; customers; revenue growth; SaaS; technology; cloud; managed services; subscription; renewal; expand; expansion; onboarding; adoption; utilization; advocacy; customer journey; customer experience; growth; retention; infographic