Joshua Nelson says most agencies can't beat 3% churn at scale. His fix: move clients to annual contracts instead of month-to-month. One-year commitments filter out uncommitted prospects and dramatically extend customer lifetime value.
There's very few agencies I know retaining better than 3%, better than 97% at scale. So is it that you need to increase the monthly fee, or is it that you need to up the marketing and increase the sales? As you look at this formula and as you study the numbers, we can reduce the churn. A couple things we've done that actually had a huge impact on the ability to reduce the churn outside the fundamentals was to shift to an annual agreement. Just instead of saying, hey, let's do it month to month and see how it goes, at a certain point we decided, let's tell these people if they want to do business, they got to commit for a year. We're gonna build a website, we're gonna write all this content. They're not serious about sticking with us for a year, they're probably not gonna be a good fit anyways. And when we did that, massively extended the lifetime value of our client base.
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