Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

Churn Is Killing Your Recurring Revenue (And You're Ignoring It)

17 Jun 2026 · 1 min

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In this segment, Mike Andes argues that simply filling the top of the sales funnel with clicks, leads, and a low customer acquisition cost (CAC) does not drive growth for subscription‑based businesses. He introduces a second, retention‑focused "bucket" that represents the ongoing relationship where customers flow from the bottom of the acquisition funnel into a recurring service. The core problem he highlights is churn, which he describes as holes in this bucket that let customers leak out. Andes stresses that if a company cannot retain customers, all the effort spent on acquisition metrics becomes irrelevant; churn must be the primary focus for sustainable recurring revenue.

Chapters

Just keeping the funnel filled at the top doesn't grow a business. The reason why a recurring revenue model is so appealing and why it's so valuable is because there's a second funnel. And I actually keep thinking of it more like a bucket because the objective of this one is we don't lose customers. They fall from the bottom of the sales funnel into a recurring service. Now the problem is there's this ugly thing called churn, and that is holes in this bucket where these customers can leak out. And that down here, is churn. And here's the thing, everyone and their mom cares about customers. Getting people down here, we got clicks coming in, and then we got leads, and then my goodness, I can figure out my customer acquisition cost. I just like saying CAC. We all freak out about getting more customers, but at the end of the day, what I missed is if people don't stay in a recurring revenue model, none of that matters. Nothing up here matters if I can't keep the customers.