I’ve written a new report about SMB advertiser churn, using Vendasta data. The report is called SMB Advertiser Churn: New Data for an Old Industry Problem. It’s free.
The report doesn’t cover PPC/SEM. However it uses data from more than 275,000 SMB accounts across Vendasta’s partner base, which include directory publishers, TV providers, newspapers, radio and pure-play digital sellers. All sell a number of services and products to local business owners.
The report looks at six churn variables:
- number of products sold
- product pricing
- vertical vs. horizontal sales tactics
- media category track record
- advertiser category track record
- service model (i.e., DIY vs. Do-It-for-Me)
Other potential churn variables, such as customer service quality and contact frequency, were harder to isolate in the data and so not considered in this report. Of the six identified churn variables only “number of products sold” appeared not to impact retention rates. All others appeared correlated with churn. The most prominent factors correlated with churn were product pricing, service model and sales strategy (vertical vs. horizontal).
As we all know from high-school science classes, “correlation does not equal causation.” And while a number of findings seem to fly in the face of conventional wisdom regarding SMB churn it’s important to take a moment to at least consider and debate some of the findings.
I’d be very curious to hear what you thought of the findings — whether you agree or disagree and why. Download the report here (reg. req’d).
At LSA 16 Google is going to present some very interesting data regarding churn and retention. Some of it is pretty eye-opening — like the opportunity for winbacks that most providers never pursue. There will also be a discussion of the evolution of the sales model and the challenges of differentiating in a “commodity marketplace.”