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Not surprisingly, if we halve the churn rate, the cumulative net profit doubles see right. More interestingly, it does not have such a big impact on the size of the cash flow valley. The reason for this is that the benefits of reducing churn only appear later in the customer life cycle.
Since churn is such a key factor, I thought you might be wondering how you can make churn as a percentage of revenue actually negative:
Using seat expansion, upselling, or cross-selling, you can increase the philippines mobile database revenue you earn from each customer. So even if you lose some customers, you can still increase the total revenue from the remaining customers to a point where it is greater than the lost revenue.
in conclusion
When you reach the point where you have a repeatable, scalable sales model, I strongly recommend that you step on the gas pedal and invest aggressively. The value of this model is that it allows you to predict in advance how much money you will need to fund your growth at the maximum rate your lead flow will allow. The model will allow you to show your investors and board members why increasing your losses in the short term makes great business sense and will pay off handsomely in the long run.
The key insights from this model are:
How long does it take to break even?
What is the total investment required i.e. how big the trough is
How long does it take to recover your investment?