How marketers can stop fueling customer churn for good

If you’re like me, then in the past 12 months, you’ve heard about Alex Hormozi’s book “$100M Offers” at least a half-million times. It feels like all the business coaches are saying the same thing, “You’ve got to have an irresistible offer, or you’ll never sell anything, die and be buried in a pauper’s grave.” 

Frankly, it annoys me every time I hear it. It’s not out of a lack of respect for Hormozi’s work. It just reminds me of an investing heuristic called the barbershop fallacy, which says you should never take stock tips from your barber because, chances are, the advice is commonplace and generic, overly simplified or misguided. 

Why obvious answers hurt your business

The barbershop fallacy isn’t just about taking advice from the wrong people. It’s also about the seductive dangers of obvious answers. That barber gives you investing tips without understanding or regard for your goals, risk tolerance or portfolio strategy. They’re just pointing out what is obvious, not what is right for you. And in the end, taking their advice can be extremely risky. 

For example, in 2013, fitness startup ClassPass fell into its version of the barbershop fallacy. It launched what seemed to be an obvious home run — unlimited access to boutique fitness classes for just $99 per month — an absolute steal when single classes typically cost $20-$35 each. And it was marketed to fitness enthusiasts in major cities for whom this level of access to premium studios would be a dream come true. 

The value proposition and target market were clear. The offer truly was “irresistible,” and the growth was explosive. However, it was also completely unsustainable.

ClassPass attracted “super users” — customers who took 20 or more classes per month. While these users seemed ideal on the surface, they caused ClassPass to lose money because the company had to pay studios for each visit. The problem was worsened by marketing strategies emphasizing value and variety, drawing in deal-seekers rather than a sustainable customer base that appreciated the core offering of fitness exploration.

The high cost of marketing to the wrong crowd

What seemed like an obvious marketing win ended up causing massive instability and nearly sinking the company. Within three years, their runaway marketing efforts and unsustainable business model forced them to raise prices, switch to a tiered pricing structure and eliminate their “unlimited” classes option. These changes triggered massive customer churn and intense public backlash.

ClassPass managed to recover because they were large enough to adapt. But how many other companies have been pushed into a marketing-driven churn spiral they couldn’t escape?

Dig deeper: Why keeping the customer beats finding a new one

How marketing fuels customer churn

As marketers, we often say, “I just bring in leads. Sales qualifies them and closes the deal, while operations and customer support keep them happy.” But look where that mindset led ClassPass. It’s like a chef saying, “I just put food on plates.” This ignores the responsibility to serve the right food to the right customer, avoid wasting ingredients and maintain food quality — which ultimately protects the restaurant’s reputation and long-term success.

Business is a holistic, symbiotic system. The actions of one department affect everyone else. As marketers, our actions may actively contribute to our company’s churn rate, and we may not even realize it. 

How do we avoid becoming another cautionary tale? By bringing in the right leads. Bringing in the wrong leads is just as bad as bringing in no leads. Marketing anything but the right thing to the right person adds to your customer churn — including any mismatch between your promises and what you actually deliver. It all sets your company up to fail. 

3 ways marketers can fix customer churn

Specifically, there are three things you can do to reduce marketing-induced customer churn. 

1. Clarify your customer

This might sound simple, but fundamentals win ball games. Unfortunately, most marketing teams don’t take the time to investigate and discover their true customers deeply. Instead, they defer to the assumptions and intuition of executives — the people who are furthest away from customer insights. Talk about the blind leading the blind. 

In a previous article, we talked about the biggest ideal customer profile mistakes marketing teams make and how to fix them. It starts with looking beyond vague demographics and digging into the profitability of your customer base. It also involves splitting your customers into an ecosystem of payers, who write checks, users who use your offering and deciders who choose to hire you. 

2. Let customers define value

In organizations, it’s easy to take our cues from the development team or operations when we explain why our product is awesome. But your customer doesn’t care whether your pocket knife has a corkscrew on it unless they need to open wine bottles. Your business exists at the mercy of your customers — it’s all about them. 

If you want to know why your offering is all that and a bag of chips, stop listening to developers who think about “what would be cool” and listen to your customers and needs. That will clue you in on what to promote.

In the end, it’s not about creating offers that make customers say, “Hell, yes!” That’s what ClassPass did and it nearly killed them. It’s about creating offers that serve your customers and get them to say, “That’s exactly what I needed!”

3. Use your product

Marketers often visit a website once or twice, explore the product briefly, and watch someone else use it, then assume they fully understand it. That’s like me thinking I can play Vivaldi’s Summer or Gershwin’s Rhapsody in Blue* just because I watched a performance — it simply doesn’t work that way.

Instead, role play as the customer. Imagine trying to accomplish something specific and using your product or service to do it. This is a deep dive into your customer’s experience. Keep an eye open for what frustrates you, is unclear or is meaningful. This will clue you into what your product does and to whom you should sell it. 

Dig deeper: How to identify high-churn personas in B2B and mitigate their risk

Churn isn’t just a sales issue

As marketers, we can’t afford to focus solely on generating leads and hope someone else picks up the slack. ClassPass shows us the cost of getting it wrong, regardless of intentions. Customer churn is everyone’s issue, but it often starts with us. 

Are you targeting the right customer or just the most obvious one? Don’t guess — investigate. Talk to your customers, and test your assumptions with data. The answers are there, but only if you dig deep.

But the good news is that the juice is worth the squeeze. When you bring in the right customers who value your offer and stick around, you reduce customer churn and strengthen the entire organization. That’s not just good marketing — it’s good business.