I have often said that churn (the rate at which customers cancel their subscriptions or otherwise stop buying from you) is the most important metric for a recurring revenue business. Why?
- The longer a customer stays, the more they are worth.
- The more they are worth, the more you can pay to acquire them.
- The more you can pay to acquire your customers, the faster you can grow.
- The faster you grow, the more capital you can raise to further accelerate everything. It’s a virtuous cycle.
The question I often get then is how much churn is too much? Read More