The Customer Success Economy

4Reason #1: Customer Success Stops Churn—The Silent Business Killer

Basic math tells us that as your company grows and your base of recurring revenue increases, the dollars of churn against that base get larger every month (in raw numbers), even if the percentage of churn stays the same. So you need more new business every month to replace the churn, which slows your growth. The bigger you get, the more your growth is slowed by the drag of churn.

Churn is like a weird kind of business-world gravity—an irresistible force—that's constantly pulling on your customer base. It's the silent, perpetual energy dragging the base down. Customers are exercising their right to leave more often than ever, thanks to the low-commitment pricing models and next-to-nonexistent switching costs brought about by the new cloud-based economy.

Remember what it used to be like when your clients would stay with you through thick and thin—and maybe the occasional steak dinner or sporting event? Yeah, those days are gone. Now you're earning your client's continued loyalty every single day.

But the next-level implication is where it gets interesting. One of today's key questions for business leaders is, “Which of my clients are at risk?”

Here's the hard truth: Any one of your clients could leave you at any time. In the long run, all of your clients are “red.” They're all at risk. Let's look at why that is:

• Your sponsor at the client will leave and the replacement may have experience with a competitor. ...