4
Time to Spurn the Concept of Churn
What would happen if a business ran out of viable customers? What if the pipeline of new blood permanently dried up? Sound far-fetched? It’s not as outlandish as you might think. In fact, this is precisely what happens in entrenched categories, industries, and brands that are trading in otherwise mature and/or stagnating markets.
In the early days of any new product or category, there is the shiny-object syndrome that operates in a business’s favor. Everything is new and exciting, invites trial and experimentation, and rewards curiosity and intrigue. Sometimes all it takes to fill a store that has previously been vacated is just to open the doors.
For most companies, there just isn’t enough pixie dust to go around and get people in the store. And so we turn to gimmicks: Take a walk down any given street in Manhattan and you’ll be overwhelmed with the number of Grand Opening signs (it used to be Under New Management). Soon enough, however, you’ll come to realize that the only thing Grand about the opening was the purchase of the actual Grand Opening sign. And once the sign is lowered and stored with the Under New Management sign, fake Christmas tree, electric menorah, pumpkin, and other window candy, it becomes a simple numbers game: prioritizing quantity (foot traffic) over and above quality (service).
This game works up to a point, but soon the magic wears off and consumers are in on the secret. No longer do bells and whistles differentiate or disguise the lack of substance and consistency. In the freakiest of cases—like that of Manhattan’s famed “Soup Nazi”—complete disregard for service actually entices people to line up for more (abuse). However, for the other 99.99 percent of us, our fortune cookie will read EVERYTHING MUST GO if we aren’t able to find a healthy balance between getting people in and keeping them coming back for more.
Oh, yes, and then there’s advertising—often referred to as “Spray and Pray” or “Command and Control.” In reality, this has become synonymous with a different act—that of Churn and Burn (with apologies to Texas Hold ‘em). The continuous rotation of campaign taglines, creative messages, and clutter-busting noise helps keep a baseline level of acquisition activity. But what happens when advertising budgets dry up (as they have in recent times)? What happens when people aren’t watching commercials anymore, or when they are, they’re no longer convinced there’s anything grand about the opening to entice them into the store and give the new management one more shot at redemption?
The entire process of managing churn is flawed at best and suicidal at worst. It is predicated on a simple formula: that people coming in need to counteract those going out. And as long as the former outweigh the latter, the cash register gives the illusion that all is well in commerce-land. To make this madness that much more scientific, there are even various levels of churn that are deemed to be acceptable.
Let me be clear: No level of churn is acceptable. Ever.
Call me old-fashioned, but I was always taught to treat every customer as the most important and/or last one. It’s an incredibly dangerous game when people become nothing more than statistics, and a laissez-faire approach to business health and wellness is adopted in the process as long as the numbers conform to the norms.
Churn, in any form, is intolerable; it’s as simple as that. Companies need to obsess on reducing churn to zero. No self-respecting cable customer should ever have or need to switch to satellite, and vice versa. No person should ever have or need to abandon Colgate toothpaste for Crest. No human should ever have or need to switch from AT&T to T-Mobile, from Dell to Lenovo, from Visa to Mastercard, from K-Mart to Wal-Mart. And yet many do. We give our customers way too many reasons to make the switch. We make it easy for them and for our competitors:
• From lack of caring or simple neglect
• By giving poor customer service (response and responsiveness)
• By losing touch with our consumers
• By failing to close the loop
• From lack of innovation
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