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10 Quick Tactics To Reduce Churn

July 8, 2015 Amity Team

For recurring revenue-based businesses, quickly reducing churn is one of the critical drivers of success.

Churn is a fact of life. But the amount of churn is not. By adjusting key customer facing processes and leveraging state of the art tools, companies can reduce their churn down to the optimal level.

The economics of reducing churn tell a compelling story.

According to Pacific Crest Securities, SaaS businesses spend an average of $1.07 to acquire $1 of new revenue. The cost to upsell an existing customer is 16 cents, while renewing an existing customer is 12 cents.

The bottom line: take care of the customers you already have. You can quickly calculate the ROI associated with expense focused on customer retention. Companies, especially fast-growing companies, can get so focused on the next new customer, they forget to manage their current customer relationship.

What is the impact of churn?

  • Churn can be indicative of a problem you need to solve that is being masked by growth.

  • Churn hurts the bottom line, it hurts employee morale, and it hurts company reputation.

However you do the math, it costs significantly less money to keep a customer than land a new one.

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About the Author

Amity Team

Amity provides the world's most powerful Customer Success software. Amity, senses changes in customer health or rhythms, recommends the right actions and measures effectiveness. The combination of real-time playbooks, intelligence and automation helps customer success organizations scale quickly and efficiently.

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