Have 5% churn rate?

Churning more than 5% per month? 😱

Is that good or bad?🩸

The short answer is

It's probably*** BAD… 😱

The real answer is

It's industry and customer based… but what are we going to do about it?

Baremetrics has a report 📊 📉 Small customers, 3-5% churn monthly

📉 Large customers, <1% churn monthly

Does that suck for you?

or you beat the average?

—

Before going into that…

We launched PLG in 2022

We acquired 1000+ customers

We upsold customers

Our churn rate was high

It's a combination of

🙁 Our earlier upsells didn't meet PMF

🙁 Some upsells were in monthly vs annually

🙁 Upsells to small companies also run out of business

📉 Earlier upsell didn't meet PMF

Initially, we sold services + technology

Which is very common in the compliance word

Eventually, the dirty secret in compliance

Customers want to pay to learn compliance 🧑🏻‍💻

Once they learned it, they don't want to keep paying

We saw a future, where services is a premium

Customers who we sold services to…

Eventually didn't last 😫 

That's true for the whole compliance market 👀

📉 Upsells were in monthly vs annually

Upsells for small customers in monthly

Will get a high churn

Take a look at the dashboard for Buffer 📊

Product for SMBs, and creators

Monthly priced product

Short lifetime

High churn

They have higher than 5% per month

Normal for them?

Yes that's the nature of their beast

Can they make it stickier?

Probably, yeah

They started to build multiple tools

An All-in-one suite to combat this

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📉 Small companies go out of business

We targeted a high volume of small biz customers

The nature of the small biz

Not all will last long enough

Churn is expected

Its going to be higher than 5% per month

We knew its a volume game

🗣️ What are we going to do about it?

Churn happens

Report churn reasons

What can we control

What can we not** control

 🛑 Out of business (cannot control)

🛑 Poor onboarding (control)

🛑 Feature request (control)

🛑 …

Communicate at-risk reasons

Find your churn rate

Tell a story behind the number

To your executive team

And influencing churn

Have business-driving discussion

On your product roadmap 👈

On building effective workflows 👈

On be a revenue driver 👈

Read more about PLG <> Churn, PLG <> Upsells, and PLG <> Paywalls at growthwithgary.com 

Or learn more at https://www.youtube.com/@GaryYauChan/videos 

See the comments here: https://www.linkedin.com/pulse/churn-rate-product-led-growth-chan-building-plg-for-csms-and-qbrs-okwse

I write daily*** about my learning on launching and leading PLG. Feel free to subscribe.

I am Gary Yau Chan. 3x Head of Growth. Product Growth specialist. 26x hackathon winner. I write about #PLG and #BuildInPublic. Please follow me on LinkedIn, or read about what you can hire me for on my Notion page.