Monthly Archives: October 2013


We have a statistic in the television business called churn.

English: Butter churn, Dunserverick Museum One...

(Photo credit: Wikipedia)

Actually, it’s more about the cable TV business and it’s short for churn rate.  As is sometimes the case, Wikipedia defines it nicely:

Churn rate, when applied to a customer base, refers to the proportion of contractual customers or subscribers who leave a supplier during a given time period. It is a possible indicator of customer dissatisfaction, cheaper and/or better offers from the competition, more successful sales and/or marketing by the competition, or reasons having to do with the customer life cycle.

Obviously, if a company is to grow, that growth needs to exceed its churn rate – you need to gain more customers that you lose.  Simple, right?  It points out pretty clearly that keeping customers is at least as important as adding new ones.  That simple thought is what popped into my head as I read the results of some research from the Accenture Global Consumer Pulse Survey.  You can look for yourself here.

What they found was that companies are not working hard enough to stop consumers from switching. In fact, among people who changed service providers – banks, phone companies, retailers – 81% said that the company could have done something differently to prevent them from switching.  Maybe it’s not as simple a thought as it might appear?  As MediaPost reported:

The report says that while service providers… have more data and insights into consumer desires and preferences than ever before, providers have failed to meaningfully improve customer satisfaction or reverse rising switching rates among their customers.

Ouch.  So what does that mean specifically?

  • 91% of respondents are frustrated that they have to contact a company multiple times for the same reason
  • 90% by being put on hold for a long time
  • 89% by having to repeat their issue to multiple representatives
  • 85% of customers are frustrated by dealing with a company that does not make it easy to do business with them
  • 84% by companies promising one thing, but delivering another
  • 58% are frustrated with inconsistent experiences from channel to channel

Marketing is often focused on growth.  However, as any financial person will tell you, improved profitability can come from cutting expenses as it does from growing revenues (and I’m a strong advocate for the latter since those cuts often kill growth and revenues but that’s another screed!).  Churn is the cutting of losses and helps reduce costs – I think it’s cheaper to keep a customer than to acquire one.  It’s also something that businesses can fix if they focus on it.  None of the study’s findings are difficult to address IF there is an awareness and a commitment to do so.  Is your business ready to do that?

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Turn The Chair

I was having a coffee with an old friend the other day.  We plopped ourselves down in a couple of overstuffed chairs at one of the local Starbucks to chat and it became apparent in a couple of seconds that the sun was streaming right into her eyes.

Free chair, new fence

(Photo credit: Kentucky Photo File)

I mentioned that fact and asked if she wanted us to relocate.  She sat forward and said “no, if I sit like this it’s not an issue.”  It wasn’t, but since I had no desire to watch her contort herself nor to see her back go out from sitting in an awkward position, I suggested she do something to remedy the situation: turn the chair.

That, in three words, is pretty much what I do.  I help clients to come up with solutions that might not be obvious to them in the moment but which are readily apparent to someone who isn’t caught up in the problem.  Questioning the underlying assumption and changing the paradigm is what many businesspeople fail to do on their own (and what just as many of us do in the “real” world outside of business as well!).  It gets back to the “what if” conversation we explored here a little while ago.

My friend could have sat sideways and waited for the sun to move so it was out of her eyes.  That would have distracted her from our chat at best and left her with a sore back or half blind at worst.  In a sense, it would have been the equivalent of blaming a business failure on a bad marketplace.  When the market turns – when the sun moves – things will be fine.  I don’t think any business really has the luxury of that sort of thinking and turning the business’ figurative chair is how the enterprise can carry on despite unfavorable circumstances.

I’ve been told that consultants are a luxury in good times and unaffordable in bad times.  As you might expect, I disagree.  We’re the folks keeping the sun out of your eyes and the sun is always shining in business.  While we might know a lot about your business (in fact, we need to!), we’re not caught up in the day-to-day, in the politics, or the latest office drama.  We have a different perspective.  Not better – different, and sometimes, that’s all that’s needed to move forward.

That’s my take – what’s yours?

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How can I write about anything this TunesDay but Lou Reed?  He passed away the other day from liver disease and it’s a huge loss to any fan of rock music.  Lou was a founding member of The Velvet Underground, a band most of you have neither heard nor heard of.  As with several other members of the Rock & Roll Hall Of Fame (they’ve been in since 1996), their influence goes way beyond their commercial success, and Lou’s went even beyond that.  He also points out a few things that are relevant to business too.

First, a little Lou to get us energized:

Lou’s efforts with The Velvet Underground were a bomb.  Not the bomb – a bomb, as in commercial failure.  While the world is littered with businesses (and don’t kid yourself – no matter how artistic the band, it’s a business too) that fail, we sometimes don’t recognize that contained within that failure is a ton of success.  Obviously, since they’re a Hall Of Fame act, the artistic side of the venture was working.

This isn’t an unusual phenomenon, by the way.  Two examples that pop into my head are Galileo and Thoreau.  Galileo, the father of science, was locked up as a heretic and looked upon as a failure in his time.  Thoreau’s works were mostly ignored for 100 years and his influence on many folks in the latter part of the last century is undeniable (check out Civil Disobedience and Walden if you don’t believe that).  Smart businesspeople look in the ashes of “failures” for embers of success.

Back to Lou.  I chose the song Rock And Roll because it too makes a business point.  First, the music.  It’s a very familiar chord sequence.  Slow it down and you have Sweet Home Alabama.  Add a droning lead guitar and you have Sweet Child Of Mine. We don’t always need new, innovative or unusual chord sequences to make magic either in music or in business.  Second, the lyrics:

Then one fine morning, she turns on a New York station
she doesn’t believe what she hears at all
Ooohhh, she started dancin’ to that fine fine music
you know her life was saved by rock ‘n’ roll
yeah, rock ‘n’ roll

Anyone who has had that experience – feeling as if they had their life saved by music – knows how powerful an emotion Lou is tapping here.  That’s a business point as well.  Lou describes a typical young adult who can’t relate to her parents or situation in life and yet finds hope and salvation in music.  Using subjects to which the target audience can relate and expressing yourself in honest, simple language are good thoughts to keep in mind as well.

Finally, Lou didn’t have classic rock looks nor a great voice yet he was able to succeed.  Many of us tend to dwell on the obvious shortcomings our businesses may have instead of focusing on how to use the assets we do have to grow.  In Lou’s case, those assets were a fantastic vision, fearlessness, and  his intellect. While we’re all a little worse off for his departure, we have his music and the things he showed us through it.  For that, I’m appreciative and glad.  You?

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