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Churn baby churn - Enhance Customer Retention

Dave Krenik
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“In hell there is no retention.” —Miguel De Cervantes Saavedra

It could be argued that Cervantes wasn’t referring to employee and customer churn. Nevertheless, the quote fits our context well. It’s well acknowledged that it’s easier and more profitable to service customers you already have than to go out and acquire new ones. How much more profitable? According to FPS, for banks, the cost of acquiring new customers is 5 times the rate of retaining existing ones. And author Frederick Reichheld notes in The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Valuethat as little as a 5% reduction in customer churn can boost net profits by as much as 20%. That’s why we care about customer churn.

Blue Apron customer retentionBlue Apron is an excellent example of how customer churn can impact a company’s financial strategy. The meal kit company’s IPO opened at $150 in June of 2017, but their share price declined steadily (and rapidly) when investors investigated their soaring Sales & Marketing costs. The stock closed at $7.37 on January 11, 2021. A devastatingly high customer churn rate (greater than 80% after 12 months), among other factors, was threatening the company’s viability—and still is.



NetApp understands the value of customer retention and the associated costs of customer churn. NetApp “walks the walk” by reporting “dollar-based net revenue retention rate” in its quarterly earnings report. Basically, dollar-based net revenue retention rate is a measure of NetApp’s customer churn for its cloud products and services.  One of my earlier posts touched on the importance of latency to the customer’s experience. NetApp enables transformational latency numbers through its implementation of true end-to-end NVMe. Providing a consistent, positive customer experience goes a long way in enhancing customer retention.

Whether your applications reside on an Oracle, SQL Server, or SAP HANA database, NetApp can improve the user’s interaction with them. If you missed it earlier, check out the amazing Jeff Steiner’s video, Now THAT’S a Fast Database, on the benefits of NetApp’s implementation of NVMe. Although Jeff’s video is Oracle-centric, it applies to SAP HANA and SQL Server as well.

Dave Krenik

Dave has been bringing solutions to market under various monikers (Alliances, Business Development, Solution Marketing) for greater than 15 years. Before entering the world of Tech, Dave enjoyed a 15 year stint in the wine business.

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