“Churn” isn't a metric, it's people rejecting you–grow from it
churnkey.co> The only platform that fixes every type of churn for you.
Imagine someone were to lose a family member and as a result they decide that meal planning has become too much of stressor in their daily life. So they sign up for HelloFresh (use promo code "HN" for 15 free meals). As time goes on, things slowly return to normalcy– life goes on. They no longer feel like meal planning is too much of a burden.
I wonder what churnkey's plan would be to retain this customer.
One user is a patron. A million users is a metric.
I don't want companies with lots of customers to senselessly fake some sort of meaningful relationship. I hate when companies do that. No, I'm not here because we're pals and you make me feel like a regular barfly and know my name. I'm here because you sell something I want to buy and you want my money.
I have a sense that I would completely despise whatever it is that Churnkey is peddling to businesses.
This is kind of a dramatic way of thinking about it. Then again this post is from a company who apparently “fixes every kind of churn for you”
Author here. You'd be surprised how many founders / operators I've spoken to over the past two years who work so hard to avoid discussing cancellations. At the core of it, they're hurt and scared by it. So yeah, it is dramatic. It's a very human phenomenon.
I think it's really interesting to look at what innate aspects of our humanity that made total sense 10, 20, 30k years ago (e.g being hurt by rejection) can negatively impact our modern lives, and how we can try to push past them.
Can we look past innate human characteristics? Isn’t that like saying we can thrive without a brain?
Do we avoid acting like animals or memorize shared memes that make it ok and help us ignore it; like believing confession erases all sin? Do we just chant “we’re not like those smelly apes” while piling shit into landfills and the ocean so we don’t feel like those apes?
The article starts off with what I believe is a faulty premise, that churn "is" rejection. Trying something new is such a deeply ingrained part of our DNA that there willl always be a segment of your users and staff who do so regardless of all of your attempts to prevent it. It isn't rejection so much as standard human behavior. Also, I thing "rejection" is far more inflammatory than "churn".
Yes, churn is a metric. It's not always someone rejecting you. It could be that they just needed your product to solve a problem and then unsubscribe. They are not rejecting you but you've served the need and so they stop paying you.
How is that different than rejection?
A hypothetical guy works at a hypothetical startup that publishes a lot of blog posts, and he's not the greatest writer, so he uses a hypothetical service that does AI-based editing for him. He loves the service and recommends it to everyone. The startup folds and he goes to work at a different company and that company has a professional copy editor on the payroll so he doesn't need to use the service anymore.
He's churned, but he hasn't rejected the service. He just doesn't need it anymore because his circumstances have changed. If he needs the service it offered, he could presumably re-subscribe to it later.
My personal take is that it's more of a service (ie Software-as-a-Service). So, you use the service for what you need then stop when you don't need it anymore. That's not rejection that's not needing that service anymore. Say for example, that I have car insurance. I sell my car and cancel the insurance. Does that mean I'm rejecting the insurance company. No, I just don't need that service anymore.
As this stuff scales you need for think of churn as a cohort and start looking at why. I don't argue that. But, framing it as rejection is incorrect. Guess it depends on the service you're providing though. If it's something highly personal where you, the person are highly involved, then it might be rejection. But, I think that's pretty niche.
That's interesting. I see your example as being rejection; you are rejecting the service and that's made obvious by canceling the service. What I suspect is causing the difference in perspective is the emotional association. But then we have to wonder, does rejection require negative emotion to be true? Which I'd say, no.
I'll tell you what I reject. The idea of paying for anything I don't need anymore. Haha. Guess it's all academic at this point since we're talking about examples.
Seems healthy
I've been thinking about this idea of rejection a bit. I never thought I'd talk about it in the context of churn, but actually it makes perfect sense. Because it's not just rejection: it's adaptability. Rejection is going to happen because, well, it's also a human thing. But the ability to adapt turns rejection into connection. In this case it's saying "hey, there's something not right here, let's work on it." And I think that's something more than "normal". It's adaptability.
admitting I didn't look at TFA, I have to say from the domain name churnkey.co, promising to sell me "churn-key systems" seems like a dubious promise, however admirably quite honest! Customers will start fleeing, right out of the box!
ok, now I took a look. I think the ideas they're talking about are actually well known in marketing circles, best summed up by the old aphorism, "the customer is always right." I think most people misinterpret this phrase, thinking that it means "you have a customer in front of you, engage in ass-kissing, tell them they're right" and I don't think that's the right way to think about (because then your inner child starts screaming "i don't want to kiss ass!") The right way to think about it is, here is a customer telling me their authentic experience, what they like, what they don't like. Can I change what they don't like? For every customer complaining, there are 10 more who were annoyed and swallowed it. "The customer is always right, because the customer is giving you free market research about friction they encounter."
I just think this is a more positive way to think, it's less scolding than this article.
It's even more funny than that. There is often no such thing as reliable market research, and VCs gambling their money want local monopolies or a fat check on sale. The churn to them means you're not a monopoly. Average number of paying customers making a profitable business? Does not matter, not funding. Unless it's a likely acquihire.
Churn greater than about 10% is a death sentence for a SaaS business. And it's a metric every investor will ask about and every potential employee ought to.
I assume you're talking about monthly churn. But I thought an industry average was higher churn than that.
I'm sure it depends somewhat on the type of SaaS you are running.
Translated from marketdroid: "We want to force lock in customers, or if that is not possible, annoy them to death with nags if they don't extend the contract." Asking customer who left you for feedback is generally an annoyance to the customer. My personal policy on this kind of thing is to instant spamlist the company doing it. Or if not possible, at least not respond.
Face it, either your service is not quite necessary, too expensive, not useful enough or you annoyed the customers to death. There might be no way to keep your particular product going because it just might be one of those pointless ideas that seem nifty but there's no market. It might even be the case of insufficient scope as often is with these funny SaaS things.
Framing it as "rejection" is blaming the customer (at least partly) for bad behavior. (to your business) Exactly one of the behaviors described as bad in the post.
A business relationship is not a marriage. You're not being rejected, but just, to put it bluntly, suck or cannot beat the monopoly.