Churn Rate... Do you know what yours is?

...and how it affects your business?

Churn Rate* The phrase is based on the English verb "churn", meaning to agitate or produce violent motion.
Customer base
“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. The churn rate can be minimized by creating barriers which discourage customers to change suppliers (contractual binding periods, use of proprietary technology, unique business models, etc.), or through retention activities such as loyalty programs. It is possible to overstate the churn rate, as when a consumer drops the service but then restarts it within the same year. Thus, a clear distinction needs to be made between 'gross churn', the total number of absolute disconnections, and 'net churn', the overall loss of subscribers or members. The difference between the two measures is the number of new subscribers or members that have joined during the same period. Suppliers may find that if they offer a loss-leader "introductory special", it can lead to a higher churn rate and subscriber abuse, as some subscribers will sign on, let the service lapse, then sign on again to take continuous advantage of current specials.” * From Wikipedia, the free encyclopedia
Your Territory
There is churn in every business, with some causes being external, and some being internal. Your territory is no different. Do you know what the average rate of “Churn” is for your territory? Typical green industry figures are in the 20 – 25% range depending on market segment. There is higher than average churn in the landscape segment, and lower than average churn in the garden center segment.
External factors include economy, change of business model, change of personnel, and impact of competition, weather, and government regulation.
Internal factors include customer service, personalities, quality of products, pricing, firing you customer, credit policy, change of market focus, change of product lines, or change of services.
Staying whole (it goes without saying retention is the first golden rule)
A key strategy to maintaining and increasing sales success in your territory is to focus on replacing those customers lost to inevitable (and ugly) churn. The only way to accomplish this is to be constantly seeking new opportunities. If your current territory management plan does not include the objective of adding at least as many accounts as lost, or even better, more accounts, then your territory is destined to shrink.
Ask yourself: “What is your weekly goal for new opportunities?”