It is common knowledge that retaining existing customers is more cost-effective than acquiring new ones – a concept that is especially pertinent today. However, what many CFO might overlook is the significant influence they wield in mitigating customer attrition, despite not being on the frontline of daily customer interactions.
Firstly, CFO can play a pivotal role in reducing customer churn by converting raw churn data into key performance indicators (KPIs). These KPIs can then guide other teams into taking necessary action. Consider, for instance, presenting the sales team with the “monthly revenue attrition” figure, which starkly emphasizes the severity of lost annual recurring revenue (ARR).
Further, CFO can provide crucial insights by segmenting churned customers based on characteristics such as their sales representative or acquisition date. This can help to identify patterns, which in turn can prompt their colleagues to make informed modifications.
Moreover, CFO may sometimes have to undertake the challenging task of making a data-supported argument for “letting go” of customers who are simply not profitable.
Dive into our comprehensive guide to find out more about the role of CFO in reducing customer churn:
CFO are well-aware that customer churn is not the sole metric necessitating closer scrutiny in today’s economic landscape. There are other significant metrics driving insights, applicable to both SaaS and non-SaaS businesses alike, such as Average Revenue Per Account (ARPA). This particular metric can serve as a telling indicator of whether your pricing strategy aligns with the current economic environment, where price adjustments have become increasingly frequent. Should ARPA show a downward trend over time, it might stimulate important conversations among various teams to ascertain the reasons behind lower earnings from new customers.
CFO influence extends beyond purely financial metrics. Refer to this comprehensive cheat sheet, which encompasses a wide range of marketing and sales metrics, to commence your deeper exploration: