Customer Success

Chapter 12

Law 8: Deeply Understand Your Customer Metrics

Author: Kathleen Lord, Vice President of Sales and Customer Success, Intacct

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Executive Summary

Successful subscription-based companies must deeply understand the details of churn and retention if they are going to maintain and accelerate their revenue growth. Nothing slows your company's growth rate faster than having revenue from your installed base evaporate. As your installed base revenues grow, even a 1 percent increase in churn can make a huge difference in your company's velocity. If you are at a $25 million run rate and are trying to maintain a 50 percent or more growth rate, a 1 percent increase in churn means your sales team will have to close an extra 20 percent in new business sales to maintain your growth rate. The following five steps will help you define and gain a deep understanding of churn and retention to help your company focus on the right priorities, accelerate growth, and keep your customers for life.

The biggest issue early-stage, subscription-based companies face is how to accelerate customer acquisition. In fact, the majority of a company's resources (time and money) are spent figuring out how to solve this problem and prove that the company has a viable business model. However, as soon as a company has successfully solved the challenge of accelerating customer acquisition, someone—your ...