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The CMO Dilemma8 of 20

A SaaS business at £40m ARR with a churn rate of eight percent is losing the equivalent of its

Chris Wheeler

A SaaS business at £40m ARR with a churn rate of eight percent is losing the equivalent of its entire customer base every twelve and a half years. That sounds acceptable until you calculate what plugging two points of that churn would do to the valuation multiple.

The marketing function in a SaaS business is almost always structured around acquisition. Pipeline, MQLs, conversion from trial, activation rate. The metrics reviewed in the weekly meeting are acquisition metrics. The budget is predominantly an acquisition budget. And churn is a customer success problem, or a product problem, or occasionally a pricing problem, but it is structurally not a marketing problem.

Except that it is. Because the customer who churns at month four was acquired by a marketing promise the product did not deliver on. The expectation was set in the acquisition journey and the product experience did not match it. That mismatch is a marketing and product alignment problem that sits in the handoff between the two functions, which means it belongs to nobody and costs the business in the customer success team's numbers while the marketing team's numbers stay green.

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