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Churn Rate

Do you know your customer Churn Rate, that is the amount of customers that you lose every year, for which you have to get new customers to replace them. The cause is mainly people either moving out of your area or dying.

The Churn Rate is important to know because it gives you a good indication as to the performance and quality of the services your offering.

A normal Churn rate would be less than 5%, and the higher this figure gets the worse your business is performing.

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  • PRO

    With years of business, what's your churn rate for comparison ?

    • We have a very little churn rate, well under 5%. 

      We still have some customers that have been with us for over 20 years.

      But I do know that the lawn care business usually has a higher churn rate than garden maintenance.

      • PRO

        What's your customer base (in rough numbers) and number of teams to place your advice in context?

        Otherwise, its just "Business 101".....

  • PRO
    That's reassuring as my churn rate for the last two years is less than 5%
  • PRO

    I don't understand how people moving away or dying can give you an indication of performance and quality of your services?

    • If your churn rate was higher than 5%, (say 20%) then its obvious that customers are leaving for other reasons , quality of service?

  • PRO
    A bit of a sweeping generalisation IMO.
    People lose jobs or find someone cheaper or lots of other things.
    Hard landscapers need new clients all the time does that mean there service is bad?
    • If your in the hard landscaping business then you don't have recurring contracts, so "churn rate" doesn't apply. This only applied to a business with recurring, auto renew contracts.

      • PRO
        Fair enough.
        Personally I lost 2 last year, and more than replaced them. I've dropped 2 this year as I had better replacements to spend my time at.
        I'm also thinking of dropping another but will wait for something better to come along then bump the price on them and see what happens. If they accept I will stay if not I won't. Don't really want to lose them in some respects as they are one of my first customers but the price is too low now.
        • In the same boat. My churn rate is high because I did not charge enough when I started out. It was 60-80% as I learned on here I just was not charging enough and I was running myself into the ground physically. I was cautious with my price rises following that and I raised my prices again but just for new customers this time, however the old customers will be bumped up next year which will incur another churn. I dont feel I am yet at a steady place price wise and garden wise. 

          Here in London people are quite mobile it seems. They move house a lot. Those counting the pennies are always looking for a cheaper deal so there is a churn due to price.

          I have my core customers in my regular rota, but space for the odd add on. Can the odd ones be classed as a churn? Some just want the lawn or hedge done in a blue moon. I am also trying to get more customers closer to home so I dont spend too much time driving about. Due to the congestion here it takes longer to get round. One hour for 9 miles, ridiculously long stuck in traffic, no matter what time of day, time and diesel costs going up, working hours down.

          I also passed on some old and new customers to a lady gardener just starting out. I guess that's classed as churn as well?

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