Disputes, chargebacks, and refunds can have a substantial effect on your revenue. We’ve already shown you how to avoid chargebacks and lower your chargeback rate. In this post, we’ll take a look at the difference between disputes, claims, and chargebacks, then touch on how to develop an effective refund policy that will help you grow your business without disruption.
Not every direct-to-consumer business should be a subscription service. Many try to be, and for good reason—subscription businesses often have more predictable revenue than other businesses, they allow you to acquire a customer once and then have a long-term paying relationship with them, and they can quickly create enormous enterprise value. However, in evaluating whether this model is right for a particular business, entrepreneurs need to have an intimate understanding of the immutable force governing their success—churn. Having run and invested in quite a few consumer subscription businesses over the years (eMusic and Dollar Shave Club being the most well-known), I have put together a view on churn that I am happy to share.
<p>Churn refers to the loss of customers who are subscribed to or use a service. Churn rate is an important component of growth because it is tied to the retention of users of a service. When more users churn, retention rates are lower. When churn rate is high, it is harder to grow a product or service because more new users are required to offset the users who churned from the service. Churn is particularly important in SaaS businesses and other businesses where users pay a recurring subscription fee. These businesses creaet profit from long customer retention spans and a high customer lifetime value. When churn is high, businesses can't capture the full expected lifetime value. These are the best articles on how to reduce churn and improve customer lifetime value. From how to reduce churn, how to generate negative churn, how to use customer success to lower churn rates and hacks to reduce churn, you'll find tactics to improve retention and growth for your business.</p>
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