What is Churn Rate?
If you run a subscription based business where you gain monthly or periodically recurring revenue, Churn Rate is one of the important parameters to consider for forecasting your future revenues. This metric is not just a KPI for Sales & Marketing department but also directly impacts Finance department for their future financial forecasts as well as impacts Operations or Delivery department in order to plan for scaling up or scaling down of existing business operations or infrastructure.

What exactly is Churn rate then?

In Simple terms, as the name suggests, Churn rate signifies the rate at which you lose your recurring revenue. Churn Rate can be estimated either on revenue or on the user headcount numbers depending on the way your business operates. In the Software subscription (SaaS) Industry, Churn Rate is usually calculated on user base.

Hence if you have 100 users at the start of the month and you lost 5 users by the end of the month. It would mean your churn rate is 5%.

However, I would also suggest you should keep a tab on Churn rate based on Revenue. This is because subscription rates of different types of users may differ based on the complexity of your business model and hence the user based Churn rate calculation may not give you an accurate view.

Churn Rate based on Revenue can be calculated similarly. If your Monthly Recurring Revenue (MRR) was 100,000 USD at the beginning of the month and by the end of the month you lost some 5 users who contributed 20,000 USD to your MRR. Then your Churn Rate would be 20%.

Why is it Important?

Churn Rate directly impacts your revenue and financials and is also an indicator of how dissatisfied are your customers. If you observe a series of increasing Churn Rate month over month, then it should definitely raise a flag and you need to accept that there is something definitely wrong which is leading to a spike in number of users opting out of your subscription or rental service.

Also, in order to stay in the game, your business should sustain for long.

What would happen if you fill a bucket with 1 mug of water every second but the bucket has a hole which keeps leaking 1.1 mug of water every second?


Leaking bucket of Water

You would never reach your goal of filling your bucket completely. Similarly, for your business to stay sustainable, its Customer Acquisition Rate should more than the Churn Rate. Otherwise you know what would happen.

Hope you liked reading this post. In the next post, I shall bring to you some tips to reduce your Churn Rate. Stay tuned and do subscribe us our Social Media Channels.

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Stop committing these 15 Costly Sales Mistakes
I tend to read a lot of books on Sales Methodologies. Now that I have read a numerous materials on Sales, I felt let me share a list of Costly Sales Mistakes or Situations which every sales professional should try to avoid in a Sales Process.

As per my experiences, the following 15 types of sales mistakes should be avoided at any cost:
Guide to getting Business Process Outsourcing (BPO) deals

 Heya, Hope you liked reading my previous post on Sales Suspecting. In this article, we shall discuss a detailed guide to understand the Business Process Outsourcing business and how to win BPO deals from the organizations willing to outsource.

Let us get started...

Why newbies should focus on Vertical Selling instead of Horizontal Selling
Are you a Newbie just delving into your Sales Career?
or
Are you a Sales Manager looking for assigning a territory to a newbie in your team?

or
Are you a Newbie startup looking to start with Selling your Product or Solution?


If answer to any of these questions is "Yes", 
Then you should focus on Vertical Selling instead of Horizontal Selling!


Surprised? In this post, I would tell you why is that so!


3 Price Negotiation Mistakes every Salesperson should avoid
Often, Salespersons tend to make mistakes during their Sales Negotiation conversations and tend to lose out on the sales wondering what exactly happened. The lead which they have been following up for many month now is lost just at the last phase of the sales cycle at the time of Sales Negotiation. These are the 3 expensive mistakes which every sales person should avoid at the time of negotiation.


1. Price Negotiation on High Cost Products


Avoid negotiation with Customers for reducing the price of high cost products. Always try to negotiate with customers only for the low cost products having a high perceived value in the minds of the customers. If you reduce the price of High Cost Products, then customers would expect that every time they buy from you. This is detrimental for your business growth since you would find it difficult to run your business on thin margin for a prolonged period of time.


2. Not knowing the Urgency for Customers


As a Salesperson, you would stand good at negotiating position if you are aware of the extent of urgency of the customer who wants to buy from you. If they are having less time and the purchase of the product you are selling is urgent for them, then you stand a better chance. In this kind of situation, you have more chances to crack the sales deal with lesser amount of negotiation with the customer. This is because since customer doesn’t have much time to search for another vendor, they would happily agree with your price. 


3. Starting Negotiation without understanding the needs of the customer



You should never start sales negotiation at the start of the sales cycle even without understanding the needs of the customer in the discovery phases of the sales cycle. The more questions you ask to your customer during the Need Discovery phases of the sales cycle, the more information you will get on the needs and requirements of the customers. This will help you set the expectations of the customers and would help you negotiate better. The more you know about the expectations of the client, the more you would be able to point out those facts during your sales negotiation conversations and hence customers would be willing to pay a higher price if their expectations are met.

What is Sales Prospecting
A complete Sales lifecycle comprises multiple stages. But it always tends to start with Prospecting. But often newbie salespersons ponder upon the same question, 

"What exactly is Sales Prospecting?".

In this post, I would like to help those newbie and ambitious salespersons to understand what exactly is Sales Prospecting.
6 Proven Ways for Sales Suspecting
You might have read multiple articles on Sales Prospective guide, but this post is about Sales Suspecting. 

Yes, you heard it right! In this post, we shall explore 6 Proven Ways for sales suspecting.
How to Reduce Churn Rate – 3 Legitimate Tips
Heya, in my previous post, we learnt what exactly is Churn Rate. Now you know, that more churn is bad for your business. Let us discuss some cool tips to reduce churn rate in your business.

Reason I titled this post with “Legitimate Tips” is because we would focus on building our fundamentals strong instead of trying out some quick fix leak patching techniques. This would take a bit of longer time, but is worth it in the long run, especially when you look towards sustainably scaling your business in the long term.


Legitimate Tips to reduce churn rate:

Preventing Customer Churn or Exits or Opt-outs

  • Price:

One of the primary reason many customers opt out of your service is because they do not like your price. Remember that nothing is too expensive for a customer if he is made aware of the real value of the product. Hence, work with the customer to make them aware of your product features, functionalities and business benefits so that they gauge the real value of your product or service offering. You may cite the benefits by doing a cost benefits analysis of non-tangible things like Time Value, Quality of your offering, ease of use, Customer Support and assurance being delivered in your offerings, etc.


  • Mis-selling:


Second biggest reason why Customers leave is because after few months they realize that the product is not really meant for their usage or they are not appropriate intended user for the offering. They realize that some sales person did a push sell just to complete their sales quota. In this case it is bound to backfire to your business, since they would opt-out in reasonable amount of time. In this case, try to avoid doing mis-selling or push sales. The world is big enough and hence try to sell to those whom you thing could be interested in your offering or are the right intended users.


  • Customer Success or Engagement

Many Businesses think that once they onboard any customer to sell their subscription based service, their job is done. Chief Marketing Officers should realize that once the sale is done, job is not yet over. The real journey of customer begins from the moment they start using your product or service. Hence it is important that you start engaging with your customers by involving them in regular product update announcements, social media interactions, priority support, training sessions so that they can effectively use your product to realize its true potential benefit.

Hope you liked reading this post. Follow us on our social media channels or email to get regular updates.

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How to track Sales Deals Effectively
Hi, Hope you are doing great. In this post, I wanted to bring out a list of most important items to track for effective Sales Deal tracking.

To meet Sales Quota, Your Sales persons should follow a well defined sales process to efficiently close deals at the fastest pace possible. But very often even with a good sales process, teams might miss hitting targets. One of the obvious reason is lack of effective tracking. Sales Management is no less than Project Management and effective Project Management is all about timely tracking.

Let's us take a look at some of key things you should track to meet your sales targets always.
Tips to Sell Corporate Training Programs


If you are into the business of selling Training Programs to Corporate companies, then you have stumbled upon a right blog post.

In this post, let me tell you stuffs you need to know in order to effectively engage the prospects in selling Corporate Training programs.

  • Your Buyers within the Organization would be mostly Human Resources, CEO, Project Managers, Procurement Team, Sales Managers, and Organizational Learning & Training Department.
  • Most of the Organizations invest in training programs around the following focus areas:

    1. Finance & Accounting training,
    2. Sales and Marketing Training,
    3. Customer Service training,
    4. Health, Wellness and fitness  programs,
    5. Management & Leadership development programs,
    6. Innovation and Creative Thinking,
    7. Team Work, Team Building & Development,
    8. Information Technology related Training programs


  • In order to win Corporate Training contracts or deals, you may try out following tips:
    1. Create a Professional looking website with a few marketing collateral, brochures, etc. if you are going to train corporate staffs, your website should also resonate in line with those staffs and your website’s look and feel should be of highest quality standards.
    2. While meeting the Client’s decision makers for the deal, try to demonstrate your credibility by sharing some glimpse of past training programs with other Clients in similar sector. You may to cite a few feedback & testimonials from Client & training attendees.
    3. If you have an active mailing list of subscribers, you may send out some periodic invitations of free introductory webinars ever fortnight or every month in order to gain some marketing traction, so that you can get more leads who can be potential buyers at some point of time in future.
    4. Put up the webinar recordings on public video sharing platforms like Youtube or Vimeo. It shall add more credibility for your training programs for such clients who might be apprehensive in buying your program without getting a taste of it. The number of views and likes on your videos shall give a clear indication to them on the quality of the work your trainer does and they can take a clear call on the purchase decision if it matches their expectations.

  • Sometimes while trying to sell the training programs, you may face Client demands on some customized training programs. Most of the times it may happen that you have not conducted any training on that topic in the past but you or your trainer have the required skill or expertise to take up that customized training program. In those cases, you may be required to do pre-sales of the training package.
    1. In Pre-sales of your training package, you do not actually prepare the full content of the training programs since you are very well aware that the discussion with Client is in initial stages and spending huge amount of time on full content preparation doesn’t guarantee deal closure.
    2. Hence, instead of preparing full training content, ask your trainer to give a course structure or the topic outline of the training content which can be reviewed by the Client if it matches their needs or if they would like to customize it further with some topic addition & deletion.
    3. This way after the complete course structure is defined clearly, it can give you more clearer guidance on the price quotation which you can put forward in their RFQ or RPF.


I hope, the readers in Corporate Training sales would find this blog post useful. Do comment below and let me know your thoughts.

If you are looking for a Sales Deal tracking software, Checkout Toolsoncloud CRM now, Its free to get started.