It’s a lot harder to fill up a sink when the drain is open than when it’s closed.
The same thing applies when you’re trying to grow your customer base. The higher your churn rate goes, the more new customers you need to acquire—just to stay even.
To make matters worse, it costs five times more to acquire a new customer than to keep an existing one.
You’re forced to increase your marketing budget if you want to see any growth at all. You continue to lose the same high percentage of the new customers, obliging you to spend even more to add additional new customers to offset the ones your losing and see any net growth in your customer base.
It’s a viscous cycle that can spiral out of control before you realize it.
Your bottom line suffers
Because you’re forced to pay more to acquire new customers to maintain the same level of gross revenue from your customer base, your net profit shrinks—cascading down to a weaker bottom line.
Unfortunately, a lot of companies have given up trying to fix the problem and decided to merely manage the decline.
That’s a shame.
A better solution
We have found that simply implementing the right strategies can reverse this downward spiral by reducing the number of customers who are leaving.
On average, companies that bring their customer churn under control see a 53% increase in revenue.
If your business collects recurring revenue from repeat payments on a subscription basis, the benefits are further multiplied.
Not only are you needing to acquire fewer customers to see net increases in your customer base, you are also accumulating more money from the customers who are now sticking around to make additional purchases instead of leaving.
If you’re having trouble growing your customer base, there’s a good chance that your customer attrition is too high.
We know how to recognize the symptoms, identify the underlying issues and create a customized customer retention program that will break the current cycle and put you on a path to real, sustainable growth going forward.
Send an email to info@turnaroundtwins.com or give us a call at 214.414.9014 to set up a free, no-obligation, one-hour call to discuss what’s going on and how we may be able to help you change the trajectory of your company.