Mike Andes explains why customer attrition kills growth even when you're acquiring 100 new clients yearly. If you lose 20% of customers annually, you'll plateau far below 1,000 after a decade. Cutting attrition to 10% adds hundreds of customers without increasing acquisition.
100 new clients per year.
1,000 customers in 10 years.
20% attrition.
10% attrition.
And so you're going to lose a certain percentage of customers even if you do a good job. This specific business gets 100 new clients per year. Well, that's great. In 10 years, they should have 1,000 customers. No. Because of attrition. And we can actually measure how many customers this business will stop growing at. Well, what do I do if I feel like I'm at the same size business? I'm not growing, I'm not getting any more customers, and my attrition is equal to my acquisition. Just take this 20% attrition and change like 10%. You immediately would be able to get hundreds of more customers before plateauing this business. If you simply reduce attrition.
