Why 29% of My Customers LEFT...
In this 90‑minute talk, Mike Andes recounts a $5 million loss caused by a 29% churn rate within the first 90 days of customers joining his HomeWorks CRM and other recurring‑revenue businesses. He explains that he initially blamed bugs, missing features, and insufficient training, but discovered that the real issue was that new customers never achieved a real result because they weren’t guided through three critical steps: importing their data, implementing the product to their specific workflow, and activating them with a tangible early win. Andes illustrates the problem and solution with examples from software, home‑service companies, gyms, and franchise training, emphasizing that early friction, unmet expectations, and lack of clear onboarding cause customers to quit. He outlines a new onboarding strategy—rapid data import (within 48 hours), cohort implementation calls, and clear activation milestones—to reduce friction, deliver early value, and dramatically lower early churn. The talk serves as a cautionary case study and a practical playbook for any subscription‑based business seeking to retain customers beyond the first 90 days.
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Over the past 90 days, I made a mistake in my business that cost me $5 million in net worth. Why? This ugly word called churn. Customers that should have stayed, but they didn't. I completely overlooked something. 29% of customers left within the first 90 days of joining. After that, almost no one leaves. I run a company valued at $43 million and I still miss this. In this video, I'm going to break down exactly what caused that churn and how you can fix this in your own business. Whether you're in home services, software, or anything with repeat customers and recurring revenue. So let's first talk about why I was wrong. When I first started my career and started Augusta Lawn Care, I thought growth meant more leads, more marketing, more sales, more door hangers, more yard signs, more advertising, more of everything, because I had really fallen in love with this thing called a sales funnel. And for most entrepreneurial types, we love this funnel because at the top of the funnel There's clicks, there's attention, there's awareness, and our whole objective is to get customers at the bottom of the funnel. But 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 can't think of 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 our recurring service. Okay, so let's pay recurring revenue. 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, 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. I was trying to pour more water into a bucket that had a whole bunch of holes into it. So when we looked at HomeWorks, the software, it's a CRM for home service business owners, helps with dispatching, billing, scheduling, automations, all that. The numbers are really obvious. 29%. 29% of customers were leaving in the first 90 days. Killer. That's about 10% churn each month. But what happened after that? What happened after the first 90 days? Well, our churn went to about 1 to 2— whoops— 1 to 2% per month. Meaning in the first 90 days, we would lose 29%, almost a third of customers left. But then after that, hardly anyone left. So it wasn't really necessarily a long-term retention problem. It was the fact that in just the first 90 days, something bad was happening. And I encourage you, if you have a recurring revenue model, to think about your churn separately in terms of annually and then your first 90 days. A lot of us know our annual churn or even monthly churn, but your first 90 days in almost every business I've ever started that has recurring revenue at all, It has almost always been that if I can keep them 90 days, I will keep them for years. A gym, a franchise, software, anything that I've owned, if I am able to keep them past 90 days, they stay a long time. So let's look at what happened. But first, let's talk about what I thought was happening, because what I thought was happening is, hey, we make mistakes and that's why customers are leaving in the first 90 days. They're disappointed with us because we have bugs or there's a server that gets overloaded and goes down. And we are like every business. We have problems, we have mistakes. We are like all software companies, we have bugs. And so I just assumed, it's so easy to assume this because as the founder you always see all the problems and all the mistakes in your business. So I just assumed that's why people are leaving. I also assumed that it's because we didn't have all the features that people wanted. And a lot of times the people that say those things, the loudest ones are the ones that echo in your brain when every other customer leaves. So I just assumed it's either we're making mistakes or we don't have features. Every business has features or services that you offer. It's very easy to think that if a customer leaves, they left because, well, my competitor offers other services. So for example, if I offer just mowing, well, the customer wants treatments, the customer wants bush trimming, the customer wants mulch install, the customer wants pest control. And if I don't offer all those services, they might leave. And yes, there might be a customer that leaves your mowing service because they also want their landscaper to do pest control. And so they leave to someone else or someone that does irrigation. And so it's very easy to just say, well, I'm losing I'm losing customers because I don't offer all the services, or in this case, software features that my customers are asking for. I started thinking that, and then I'm like, okay, well, maybe it's this. Maybe it's that my customers don't understand the product. They don't understand how to use Homeworks. Maybe they need more training. Maybe they need more support. So what do we do? We added way more human support on chat, on phones, on video calls. We rebuilt Homeworks Academy so they could actually watch videos and just learn how to use the software, but it didn't fix the problem. I'll be honest, when I share all this stuff, it's not necessarily easy because I'm going through this now. I have not solved this problem when I'm recording this. I have not solved this problem. I'm going to share with you what we're going to do over the next 6 to 12 months to fix this problem. But it's not easy to share this. But the reason I do it is because there are several people I look up to a lot in business and they talk about things that they went through 3, 5, 10 years ago. And I'm thrilled to learn from their mistakes. But I'd learn so much more if they could just tell me what they're actually figuring out and having a hard time with now. Because first off, I wouldn't feel like such an idiot because I have problems in my own business. And secondly, I'd be able to watch in live time as they make the changes to their business. And so that's what I'm doing. You know, I'm sure there are people going to be in these comments. This is why it's hard sometimes to make these videos. They're like, I did join HomeWorks and it was the bugs, or was this feature was missing. If they just had this feature, I'd join. And I get it. Look, I make mistakes as a leader. The business— we aren't perfect. It's difficult sometimes because when I make these videos, I'm basically exposing all the faults that I am going through and things that I'm trying to fix in my business. And I would just say, think about if all of your customers that you serve every day, hundreds or thousands every month, were in a Facebook group and every single time your team made a mistake or you made a mistake or anything went wrong, they would just post and everyone would see every mistake you did. It's tough. I do this out of knowing that This is what I would hope someone would do when I was on the come up and I was hitting problems in my business and everyone was talking about the mistakes they made so long ago, but they're super successful now. And so these are the problems I'm going through now, and I hope that it helps you more in lifetime than me talking about it in 5 or 10 years when I'm a CEO of a publicly traded company. You're like, ah, easy for you to say, 'cause it is in hindsight. So back to churn. What was actually happening? 'Cause I was thinking it was bugs, it was features. We have issues. We don't have every single feature under the sun. And that's what I was thinking. And then I was like, "Oh, we gotta do training." So tons of support, hiring more people, redoing all of Homeworks Academy. But here's what was really going on. The customers who left all had one thing in common. They never actually used the product in their real business. They would sign up, they would look around, they might even watch a couple of the videos throughout somewhere dispersed throughout Homeworks Academy. And you know, even sometimes they would send out test emails or test estimates to themselves. We could see it's like they sent it to the same person. Every single time, but they never got a real result. And if you never get a real result as a customer, you leave. And so this is really where the mistake, the $5 million mistake was made. I was trying to get customers to the result without enforcing and incentivizing the steps required to get there. And I skipped over two things. And when it came to software, I'm gonna talk about software, but this is for any business you can relate this directly to. In HomeWorks, We knew, we knew the product worked and if people would use it, it would change their business. And there's a whole bunch of features that we specifically made where it's like this one feature alone will pay for the subscription. But we missed two very important features. The first one was import. These are the steps of the process that we are missing. I'm over here like, get them in the product. I know these products and features are awesome. It'll help their business. But the problem is they hadn't imported all of their data. From their previous CRM. The second thing was implementation. We had not taken the settings, the automations, the templates, and actually customized it to their specific workflow to make sure it was working for their business. And so instead of a clear path, they had options. It was like they were just dumped into this plethora, this maze of like, there's support calls, there's chat, there's HomeWorks Academy, and like, go learn. And they'd even like— I, I do live calls with every single new member inside of HomeWorks. So even talking to me, it was like, it was still a function of like, there's all these options versus here is the path to be able to get you to where you want to go. Now, this pattern applies to any business. This is not just for software. So if you're like, I'm in some other service, it applies. Anyone with recurring revenue, any recurring repeat business, this applies. Think about it for a second in home services. If a customer hires you, but you don't show up quickly, you don't deliver value early, you don't set clear expectations of when you're going to show up and what the schedule is going to be, you fail early and then you don't show improvement, that's the big one, that's when they cancel. You're going to make mistakes. But if you fail early, you make a mistake on the first service and you don't show any improvement on the second, on the third, on the fourth, that's when they cancel. And so the same thing is true in every business. Same thing is true with gyms, for example. At Anytime Fitness, I'm a franchisee there, when we sign someone up for a membership, we don't allow them to just be like, All right, you're in the gym. Activation. That's what this one is. Activate. You came in here because you wanted to have a better, healthier body? Great. Here's a squat rack. That's activation. But what we realize at the gym is in the first 90 days, we need to get them in the gym. If we can get them in the gym with a plan and a program and progress being made, that will get them to activation. They will stay for years. There's been Members of my club for 8 years that I've owned the club and they have never missed a single subscription any month. But I've gotta get them in the club, so we do what we call FCs, fitness consultations. FC, fitness consultation. I've gotta make sure that I have them inside the club, I walk them around, I show them the machines, I look at their routine, I give them a plan for them to be able to work out on a weekly basis or 3 times a week or whatever it is. We also do what we call an EVOLT at the gym. This is a body composition analysis. We're going to track all of their fat, all of their water, all of their muscle, and it's gonna show a complete diagram of their body and their body mass and their fat mass and everything. It's really cool. It's all fancy on a nap. But we do these steps to be able to get them to stay at the gym more than 90 days. 'Cause I know if I can keep them 90 days, they'll stay for a long time. The same thing is true in any subscription business. Whether it talk about like home service web design, we just know if in the first 3 to 6 months we can get them on the first page of Google, they'll stay with us forever. Like, that's the point of activation. But I need your logo. I need to have information about what services you offer. I need to make sure you understand that you've got to connect this to Google Business Profile in order for this activation step to actually occur. Same thing is true when it comes to the franchise, Augusta Lawn Care. We had a whole bunch of people being dumped into training They come for a week, it's overload. They pass the final exam, we all cheer, and they're like, okay, now what? And so we had to have implementation calls where they would stay with their cohort that they came to training with, 15, 20 people, and we do 6 weeks of weekly calls on Zoom and go over in-depth topics to make sure they could actually get to success. All the little details and implementation so they could actually get to activation, get their first customers, get set up and rocking and rolling. If people don't get value early in your business, they don't stick around. And here's the big kicker. If they have unmet expectations without explanation. Let me say it again. If they have unmet expectations without explanation. If I expect you, when you say you're gonna do a lawn care service, that you're gonna mow and you're gonna pull all the weeds, you show up at my property and you just mow the grass, those are unmet expectations. They might be unrealistic, but they're unmet. Now if you then explain to me within 24 hours or right when I pick up the phone and I'm mad at you 'cause you didn't pull the weeds, if you are able to explain to me why we mowed the grass and we didn't pull the weeds, then I can be okay. Many times, a big reason for churn in the first 90 days is unmet expectations, regardless of whether or not they're realistic, but without any explanation. And this is an area I'm trying to improve on as well as a leader. So let's talk about what actually makes people stay. What makes people stick around for the long term? 'Cause we started looking at Homeworks at the customers who did stay past 90 days, and they all did one thing. They got a real result very early on. Now for HomeWorks, and for your business, you wanna customize what is activation look like. For us, there's several points. One of them is sending out a mass text message to all of their contact database. I gotta get the contacts in before I do that. But if I can send them the text message and they get 20 or 30 estimates in 24 hours 'cause of this one thing, they're in forever. If they get in and immediately save days on their invoicing and their billing by automating it, they're in forever. If they come in, they set up their deposit thresholds or set up off-seasons where it automatically pauses and restarts service and they save days of like pausing and restart, like tons of admin work saved, they're in forever. They're activated. Once that happens, everything changes. Now they see the value and now they stay. So what did we change at HomeWorks and what can you do in your business as well? We completely changed how we think about the first 90 days. And this is going to be something we're working on over the next 6 months. Instead of just trying to educate the customer about these activation points and telling them how great text messages are, how great upsell features, how great using video inside the Field Force mobile app is, that was all activation. What we did, we shifted to how do we get them toward the result as fast as possible? The focus is now going to be how am I going to import all their customers within 48 hours? And we're going to just do it for them. Instead of relying on them trying to figure it out and do Excel spreadsheets or, ah, this didn't line up correctly, I don't have the right formula. We're just going to hopefully do this in 48 hours. Again, I am, we are currently working on this, but this is the problem and this is how I'm trying to solve it. The next thing is we're gonna have 5 to 6 cohort calls, so small groups that you're gonna sign up with and it's going to be 5 to 10 people that you will join on a weekly basis and it's going to walk you through setting up your settings. It's gonna walk you through how to do your billing. It's gonna walk you through everything you need to be able to customize it to your specific workflow and get implemented into the business. And we're gonna guide you step by step. And then we can activate. This is the one we all wanna get to. This is, we wanna get you to the win. And that for all of us is we want to solve the problem for the customer. That's ultimately what we get paid to do is solve problems. And once you activate a customer and they've solved a problem for themselves, That is when the lights come on. That's when you keep them for the long time. That is the turning point. But we've got to go through this 3-step process: import, implementation, and activate. And I like to think of it as information. I've got to get the customer information. I can't just blindly set them up for service. If I'm using home service as an example, you just throw them on a schedule without telling them that this is when we're showing up. I got to give them tools. This, for example, would be you got to give them a blueprint. You got to give them a 3D design. You got to give them tools to be able to understand how this is going to fit inside of their property. Tools. And 3, I've got to make sure I solve the problem. And all of us want to jump to this one, including the customer. They're like, hey, I just want— that's, that's just really all I want. And they will judge you based upon whether or not you do these things. But on the business side, we've got to give them the information and the tools to actually make this possible. And so the bigger the problem, one thing I've noticed is the bigger the problem that you're trying to solve or the bigger the ticket, or the price that the customer is going to pay, the more information and tools are required to onboard the customer. This is why I can sell over the phone a mowing estimate in 5 or 10 minutes because it's $50 or $60. But if I'm selling a $100,000 job, it might take multiple visits. They need more information. It might take a 3D design, tools, me meeting them at the nursery or meeting them at the vendor or at the supply yard to show them things. That's because they need more information and tools to be able to get onboarded to actually end up solving the problem. Now, for smaller jobs, smaller problems, like I'm just using the mowing grass, for example, a smaller problem, typically what I would do is use your follow-up process to achieve information and tools. So I want to get the estimate to them as fast as possible because I know that 70%, 80%, 90% of them will just accept it right away. But then in my follow-up process, I'm going to fill in any gaps that they might have needed around information and tools. Don't hear this and think, "Oh, in my estimate, I need to put paragraphs of information. I need pages of the tools and how it's going to get implemented to their property." Remember, if this is a small ticket item, they want to move very quickly and I want to remove friction as fast as possible. One of the biggest things I missed out and the reason that this cost me $5 million is there's all this friction that people can't even get to activation. Switching anything in your business has a cost. Switching anything for importing all of your customers has a cost. And it's not just money, it's time, it's effort, it's learning curve. And so for these businesses joining HomeWorks, we forgot about the fact that if you have a $3 million company, it's a big pain in the butt to import a whole bunch of customers. It's a big pain in the butt to make sure all of your employees' data is moved across, all of your email templates are set up, all your automations are set up, all your billing. This was a pain in the butt, and I was pushing everyone to go get activated 'cause I wanted to help them solve their problems, but they didn't have the information or tools to even get to this step. If this process, this learning curve feels too big, people quit. If people see your quote that you send them and you have pages of terms and conditions, this learning curve is too big. There's too much risk here. It's not just the price that customers are paying. That is the risk associated with the job. It's also the fact that you cost them time. And so our job is to reduce that friction as much as possible. And the goal is to show the customer what exactly they need to do to be able to get the result they want. Make it simple and make it fast. I believe that's really where technology can be used to automate as much as possible. And the differentiator in home services or any industry of which companies are really going to dominate— I'll use examples. At the gym, there's friction around getting people activated. It's a 24/7 gym. It's open 24/7. So someone walks up at 9 PM, they want to join. They see our existing members walking in and out with their key fobs. Like, I want to do that. Well, there's no one staffed to sign them up. So what do we do? We use a QR code. They can sign up. It allows their phone to become a key fob. They scan in and they can use the club. What am I trying to do? I'm trying to get them to activation as quickly as possible and remove the friction. Why? 'Cause it's a low-ticket item and I can get them inside the club solving their problems as fast as possible. Same thing is true with lawn care. We use instant quote forms at Augusta Lawn Care so that customers can go to the website, see the pricing, Click accept, put a card on file, and the problem is solved. They get an email, next thing being their thank you and welcome email. And the thank you and welcome email is going to give them the information and the tools necessary so that we can solve their problems. It's going to tell them, here's how you get a hold of us. Here's the link to the customer portal. Here's how you put card information on file. Here's how you request more services. And it gives them their scheduling for their first service and what the recurrence is going to be. Here's the big takeaway for you. Customers don't leave because your product or your service is bad. And I believe that if you're watching this and you've got this far, you want to activate customers, you want to solve their problems, and you care deeply about making that happen. They're not leaving because your product or service is bad. They're leaving because they never got here. They never got to value because you didn't guide them to it clearly enough. And if I had fixed this earlier, I would have added millions in value to my business. But more importantly, it would have helped a lot more business owners that were using homeworks and could have succeeded if I would have got them through these first couple of steps. So if you take one thing from this, don't just sell the product. Don't just sell the service. Make sure your customers actually get the result because that's what makes them stay. And them staying is what builds a recurring revenue business to the moon.
