For any service company that bills on a recurring basis, a key variable is the rate of churn: How many customers cancel? In many competitive industries, churn can be substantial—some wireless carriers, for instance, lose 3% of subscribers each month. (Other businesses plagued by churn include insurance companies, gyms, and online streaming services.) Companies with high churn typically spend vast sums on marketing to try to replace all those defectors. New research shows that they might be better served by smart strategies aimed at getting lost customers to come back to the fold.
A version of this article appeared in the March 2016 issue (pp.22–23) of Harvard Business Review.
