What the FUCK is churn rate?

What the fuck is churn rate and why is it so important for your company?

Wikipedia tells us:
"Churn rate (sometimes called attrition rate), in its broadest sense, is a measure of the number of individuals or items moving out of a collective group over a specific period. It is one of two primary factors that determine the steady-state level of customers a business will support.

The term is used in many contexts, but is most widely applied in business with respect to a contractual customer base. For instance, it is an important factor for any business with a subscriber-based service model, including mobile telephone networks and pay TV operators. The term is also used to refer to participant turnover in peer-to-peer networks. Churn rate is an important input into customer lifetime value modeling, and can be part of a simulator used to measure ROI using marketing mix modeling."

When you look at your churn rate you know how is your retention performing. How many clients are still purchasing your products after their first purchase. The less drop off the better retention you are doing.

For example lets take a look on clients that deposited for the first month in January 2017.

January: 1000 FTDs (no drop off)

In February only: 500 continue to make purchases (50% drop off)

In March only: 250 continue to make purchases (75% drop off) and so on.

This is one of the most important keys when measuring your retention!

Don't forget retention means to exceed or meet your customers expectation!

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The innovators and the early adopters, can you spot them?

Before I start this post. I would like to thank TED talks for helping me enrich my world of marketing and more. One of the best talks I ever heard was made by Simon Sinek and was about how great leaders inspire action. In this post I would like to emphasis the change in my approach towards contacting customers and in which way to do it. Simon presented the following diagram: We need to talk to our customers from the inside to the outside. Conveying why we do things, how we do it and at last the what we do. As Simon said, people follow the why you do it and not the what you do. Then he spoke about the innovators and the late adapters using the following diagram: Where he brakes down your customers into groups, where the innovators pass your story along with the early adopters. The 80/20 rule also can be adjusted according to this diagram: 1. The Innovators - 2.5% - your top VIPs 2. Early Adopters - 13.5% - 2nd level VIPs 3....

Meeting summary, how to make sure everything is working according to plan!

When it comes to meetings the most important thing in my opinion is how we implement what was decided. In order to do this right, we need to be organize and assign people with tasks but most important is to assign head of implementation - the person that makes sure everything is going according to plan (i.e Execution Manager or just EM). Every meeting that requires a follow up needs an EM. So what do we need in this Meeting Summary Template: 1. Project Name/Meeting Title 2. Date 3. Time 4. Attendees 5. Non-Attending Invites 6. Agenda Items (what we spoke about in the meeting) 7. Decisions Made 8. Issues Identified 9. Follow-up Action Items 10. Most important: EM You can download the template here

Customer Life Cycle

Simple and easy way to understand your customer's road map (also known as customer's life cycle) As you can see I separated the customer's life cycle to 4 stages. 1. when he gets to your site 2. when he signs up 3. when he makes his first purchases (retention only starts after four* purchases) 4. retention stages * you can define different quantities and also change it to days/months of activity. I just think you need to understand that most customers will purchase only once - twice with you. So you need to treat them differently and show them the way to become loyal high value customers!

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