This tends to happen when companies myopically focus on inputs (adoption, CTP %, churn) and lose sight of the outputs that drive the business (gross VP dollars).
I've seen the opposite situation as well, where the company opens the floodgates and upsells everyone onto subscriptions, whether they need it or not, and then there's a huge effort to "solve" churn.
IMO, churn is only really a problem when you're losing good/great LTV customers who disproportionately drive value to the business. If you have high adoption and your churn comes from non-engaged customers, that should be expected.
I think companies with both non-subscription and subscription products face this challenge. As their subscription business grows, churn increases as more marginal customers join. However, the company needs to segment its audience to understand whether these marginal customers are more LTV-accretive than they would have been had they not joined the subscription product. These customers might drag subscription metrics downward but still be net accretive to gross VP, which is ultimately the end goal. It's really about balancing all the inputs to achieve the optimized financial output.
Being the one who asks lots of good questions - are stats from streaming services genuinely aligned with our SS retention or your apps retention? They serve different needs and customer expectations.
Great insights per usual CJ
Would you also consider higher than average retention a sign of a value-provided/price-charged mismatch?
Seems like a good signal for a price sensitivity analysis
Yes you could def be charging too little
Love this hook, email, and way to present the podcast. Reid is awesome
This tends to happen when companies myopically focus on inputs (adoption, CTP %, churn) and lose sight of the outputs that drive the business (gross VP dollars).
I've seen the opposite situation as well, where the company opens the floodgates and upsells everyone onto subscriptions, whether they need it or not, and then there's a huge effort to "solve" churn.
IMO, churn is only really a problem when you're losing good/great LTV customers who disproportionately drive value to the business. If you have high adoption and your churn comes from non-engaged customers, that should be expected.
I think companies with both non-subscription and subscription products face this challenge. As their subscription business grows, churn increases as more marginal customers join. However, the company needs to segment its audience to understand whether these marginal customers are more LTV-accretive than they would have been had they not joined the subscription product. These customers might drag subscription metrics downward but still be net accretive to gross VP, which is ultimately the end goal. It's really about balancing all the inputs to achieve the optimized financial output.
Being the one who asks lots of good questions - are stats from streaming services genuinely aligned with our SS retention or your apps retention? They serve different needs and customer expectations.