Mitigate churn to drive sustainable growth

TLDR;
1. Churn is more threatening than you think.
2. Use churn analysis as an opportunity to fix things, rather than getting dismayed.

Some facts.


Bottom line, take churn seriously. The most effective way to understand why customers are churning is by listening to them. Looking at historical data (cohort retention curves, core actions, etc) will help you understand what retained users are doing. This leads to survivorship bias. To truly sustain growth, you must understand non-survivors!


Survivorship bias illustration

Abraham Wald

Wald (1943) recommended that the Navy reinforce the plane where there were no bullets.

Illustrative example of a plane which returned home despite being hit by bullets at the red dots; non-survivor planes were hit in other locations!

How do you mitigate churn?

  • Segment customers and measure churn for the most valuable segments.
  • Conduct periodic churn surveys to listen & understand “the why?”
  • Build plans to fix problems which are in your control.
  • Reward teams who successfully manage churn.
  • If possible, build machine learning models to automate churn prediction and be proactive.

Some fun facts

1. This clay tablet is one of the earliest record of a formal customer complaint. Click here to read the full translationšŸ˜Š

A clay tablet from ancient Babylon reveals that no matter where (or when) you go, good customer service can be hard find. So it was revealed by the irate copper merchant, Nanni, in 1750 B.C. The merchantā€™s aggravation is evident, spelled out in cuneiform on a clay tablet now displayed in The British Museum.

2. There is no universal definition of churn rate. This was the basis for the judge dismissing a case against Netflix back in 2004!


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