32% of the leaders of the biggest companies in the world don’t know their company’s churn rate. That’s millions of customers and trillions of dollars being lost every year that could have been preventable. This might not materially dent the finances of those big companies, but customer churn must be addressed for most companies.
Every business faces customer churn, as it is unlikely that all customers will stay with one company forever. But not trying to keep customers will fester into more significant problems eventually. It is also far simpler and less expensive to keep current customers than to acquire new ones. One Harvard Business Review article says that acquiring a new customer is actually anywhere from 5 to 25 times more expensive than retaining an existing one. And it is even less costly to persuade them to stay than to get one to return. The true cost of customer loss includes direct costs, acquisition costs, social costs, and operational costs. All these costs add up quickly against your financials and brand. So understanding and preventing customer churn is essential for a healthy business.
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