PREPARING FOR GROWTH Keeping Customers Happy
by Darryll Gillard
W e have and will continue to discuss how gaining new customers and being able to manage that growth is critical to any business’s growth. But it’s not the only way to grow, and you can do more/ different things than investing in marketing and sales to grow your business. And what is the point of adding new revenue through the front door if more revenue leaves out the back door? The telecoms and other subscription- based companies started using the term “churn” in the 1980’s, and it really took off with the boom of Software-as-a-Service (SaaS) companies in the early 2000’s. A churn rate is defined as a percentage, being the percentage of customers lost from the total number of customers in a period (often a year). You can see the standard calculation below. Why is it important? Well, in a growth company, churn rate is the brakes applied to your acceleration. In a perfect world, we would only grow and lose no customers, but that rarely happens, and your growth
70 SPOTLIGHT ON BUSINESS MAGAZINE • VOL 25 ISSUE 3
BUSINESS • SPOTLIGHT ON BUSINESS MAGAZINE 71
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