CHURN

Ability to predict customer base and revenue visibility is key to effective business decision making

This is why churn prediction is so important to both, growing and established organizations alike. The true cost of churn is rarely considered, to its full implications.

We solve the churn problem for businesses keeping in mind 3 business objectives:

Loss of Recurring Revenue

Today, Recurring Revenue is a much-valued business metric. A ’Revenue at Risk’ Model in-built within Propellor gives you real-time visibility of how much recurring revenue your business is likely to lose in a particular time period. This becomes a critical input to planning your retention campaigns.

Keeping your MRR and ARR in check goes a long way in managing your stakeholders' expectations.

Loss of Expansion Opportunity

The probability of successfully upselling to existing customers is ~ 70%, as compared to that of converting a new prospect (~10%). This means that for every current consumer lost, your organization is also missing out on a 70% chance of a new upsell or cross-sell opportunity.

Your expansion goals are tightly linked to your existing customers. Therefore, with customer churn and loss of MRR & ARR, you also lose expansion revenue.

The in-built customer propensity model in Propellor helps you calculate the Lost Expansion Opportunity due to churn.

LTV/CAC Ratio

When churn occurs, not only does your marketing team have to dedicate time and resources to bringing in new leads and prospective customers, but also refocus on re-attracting customers lost.

For most of today’s businesses, majority of the value from a consumer is generated not during the initial purchase; but in course of the customer’s journey. The Consumer Lifetime Value (LTV) has to be higher than the Customer Acquisition Cost (CAC); in order to sustain a business.

The LTV/CAC ratio, therefore, is indeed the most powerful and versatile diagnostic tool. It not only provides a clear view of a product’s/ business’ financial health and value creation, but also guides decision making. It has changed the way many leading companies evaluate and develop their offerings, take them to market, and manage their portfolio.

Propellor provides an accurate read into your LTV/CAC Ratio.