Churn vs. Conversion
Tons of replies on yesterday's post! Thanks all!
Will definitely work on some content for each step
But for today, I'll focus on the step that most folks had questions about:
4. Set your Bill Frequency with your Conversion & Churn Rate
Here's how you do it! 👇
Billing frequency—how often you bill your customers—can dramatically affect your business.
Are you asking for a big upfront payment (low frequency, high price)?
Or are you breaking it into smaller monthly payments (high frequency, low price)?
Here’s why it matters:
High-Frequency Billing: Lower cost of entry means more customers sign up (higher conversion), but it also makes it easier for them to leave (higher churn). This model fits scalable, low-cost offerings, like subscription services.
Low-Frequency Billing: You’re likely to see fewer signups (lower conversion) because the perceived cost is high, but also fewer cancellations (lower churn). This works well if you’re offering something high-touch, with limited capacity, or big upfront costs.
So, what’s the right choice? It depends on what you’re optimizing for:
Do you need more customers now? High-frequency billing could work better.
Do you want stable, long-term commitments? Low-frequency billing might be the answer.
Real-Life Example:
Many consultants I know use different billing strategies for different service offerings.
For group coaching, they charge $50–$200 per month. This high-frequency approach keeps the price accessible, driving high conversion rates. Churn is a risk, but they're not worried about that too much because they incur a very low cost per person, unlimited capacity, and the group format adds a “sticky” community element that further helps reduce churn.
For 1:1 consulting, they charge $30k+ upfront for 3-6 months. This low-frequency strategy results in fewer signups because the perceived cost is high. But it ensures clients are fully committed, with no churn during the engagement. It allows the consultant to maximize their time and capacity for high-touch work. It helps them not get caught in the lurch when clients quit. And it helps them ensure they pay off the high incremental costs associated with onboarding this type of client.
Here's the thing:
Billing frequency isn’t just about when you get paid—it’s a strategy to align your pricing model with your business goals.
Helpful? Questions? Let me know!
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