When Is It Acceptable To Have Churn?

Marketing School - Digital Marketing and Online Marketing Tips

Eric Siu and Neil Patel

Business, Marketing, Careers

4.6 • 1.4K Ratings

🗓️ 7 March 2023

⏱️ 6 minutes

🔗️ Recording | iTunes | RSS

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Summary

In episode #2390, Neil and Eric asked, “When is it acceptable to have churn?” It’s normal to lose a certain number of subscriptions at the beginning of the year, especially if you’re just starting out. But if your level of churn is affecting your monthly recurring revenue, you may want to consider finding ways to reduce it. Join us as we talk about when it’s okay to have churn, the times you’re more likely to experience it, and what you can do to bring down your churn rates. TIME-STAMPED SHOW NOTES: [00:20] Today’s topic: When is it acceptable to have churn? [00:23] An overview of what we mean by churn. [00:51] Why it’s acceptable to see high churn rates when you are starting out. [01:41] How to reduce churn, especially when you’re new. [02:04] The importance of collecting feedback when you have high churn. [02:37] How you can build a hugely successful company (like Canva) and still have high churn. [05:18] That’s it for today! Don’t forget to rate, review, subscribe, and check out marketingschool.io/newsletter for all the latest. [05:28] Go to https://www.marketingschool.io to learn more! Links Mentioned in Today’s Episode: Canva Subscribe to our premium podcast (with tons of goodies!): https://www.marketingschool.io/pro Leave Some Feedback: What should we talk about next? Please let us know in the comments below Did you enjoy this episode? If so, please leave a short review. Connect with Us: Neilpatel.com Quick Sprout Growth Everywhere Single Grain Twitter @neilpatel Twitter @ericosiu Learn more about your ad choices. Visit megaphone.fm/adchoices See omnystudio.com/listener for privacy information.

Transcript

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0:00.0	Welcome to Marketing School, the only podcast that provides daily top-level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach.
0:11.5	Let's start leveling up your marketing knowledge with
0:14.0	your instructors Neil Patel and Eric Sue.
0:20.0	Today we're going to talk about when it's actually acceptable to have churn but first let's kind of redefine what churn means
0:25.7	Churn just simply means when you're losing clients so let's say you have a hundred clients and you lose 10 in a month
0:30.4	Your monthly churn rate is 10% which is really high because you basically have to
0:34.4	cycle through all your clients in a new year right but there are situations where it's okay to
0:38.4	churn whether you have a products or a services business so Neil and I wanted to talk about that
0:42.1	because especially what kind of the macro environment right now, we are going to see increased churn. We're already seeing increased churn. So there are situations where it does make sense. So I think the biggest thing where it's acceptable to see high
0:53.8	churn is when you're starting off. Honestly, when you're first getting started, you
0:58.8	are naturally going to have high churn. It's impossible not to have high churn. Your numbers are skewed, the older
1:05.1	your company gets typically the more improve your turn numbers will also be.
1:10.3	When you're starting off, just be okay with high churn. If you're not okay with high churn,
1:15.4	you're in for a whole whirlwind because you're not going to get the results that you're looking for.
1:19.7	Most industries don't have net negative churn from what we've seen at the beginning go
1:24.5	collect feedback from people and figure out what you need a change to improve your
1:29.4	churn numbers. A lot of people believe churn is industry related and that is true.
1:35.0	Some industries just have higher churn than others and HubSalt was a great example of this
1:39.4	when they first started out a high churn but you can do things to reduce it such as onboarding sessions such as
1:45.2	going upstream such as adding in more features and more services and more products
1:50.6	to your existing products you're giving more value.
1:53.6	There's a lot of things that could be done to reduce churn, but at the
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