How to Reduce Customer Churn as CFO
We all know it’s more expensive to acquire new customers than keep current ones – a premise that’s especially relevant now. What CFOs may not know: Even though they aren’t involved in customer relationships day-to-day, they hold the power to dramatically reduce customer churn.
- First off, finance chiefs can help reduce customer churn by translating raw churn rates into KPIs that serve as indicators for other teams to act on. Imagine showing the sales team its “monthly dollar churn” as a way to convey the urgency of lost ARR.
- CFOs can also segment lost customers by characteristics like their sales rep or acquisition date to illuminate patterns and spur their colleagues to make changes.
- They might also do the tough job of making a calculations-backed case to “fire” customers that just aren’t profitable.
Get the full guide to reducing customer churn as a CFO:
CFOs know that customer churn isn’t the only metric requiring extra attention in the current economy. Other insight-driving SaaS metrics – which many non-SaaS businesses can use, too – include average revenue per account (ARPA). This metric can reveal whether your pricing is appropriate in a climate where price adjustments have become especially common. If ARPA is decreasing over time, finance might prompt discussions with other teams to determine why the business is making less from new customers.
CFOs can influence metrics beyond financials, too. Use this cheat sheet, which includes marketing and sales metrics, to start:
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