Churn as a Leaky Sink

Just like water entering a sink and then finding its way down the drain, your *aaS (SaaS, IaaS, PaaS) business will likely always have customers leaving and sales coming in.

While it doesn’t really matter too much (at least in the context of this post) whether water coming out of the faucet at high rate or low rate, what does matter is the size of the leak at the bottom… the water going out.

First of all, is the drain wide open?  If it is, your company is doing more to drive customers away than you are to acquire them.  Figure out an effective customer insights strategy and close that drain! Setup effective surveys, reporting, and a churn action committee to address the reasons why your customers are leaving.

The drain will leak. No matter what you do, you will always have a customer cancel due to death or other reasons outside your control.  Do you know how much your sink leaks?  Again an effective system of capturing data and listening to customers is important.

But, you can go one step further by simply investing in a dedicated analytics team.  Let them model churn and build predict future customers who are likely to churn. During this process, they will identify the key drivers of churn and the company can then build a proactive strategy to engaging and saving the customers that prevent your growth.

Before you know it, that sink is a little small for the water you’ve collected, so you have to upgrade to a bigger sink.  Just make sure you don’t buy a bigger drain with it.