Evaluating Customer Retention in Recurring Revenue Businesses: With Craig Zingerline
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This episode is brought to you by Boulay, the industry standard for Quality of Earnings, tax, and audit services, serving search fund entrepreneurs for 20+ years
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This episode is brought to you by Oberle Risk Strategies: Insurance Broker and Insurance Due Diligence Provider for Search Funds and Other Small-to-Medium-Sized Businesses
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Today we take a deep dive into the concepts of customer retention and revenue quality in recurring revenue businesses. To help me unpack these ideas, I'm joined by Craig Zingerline, a serial entrepreneur who is now an advisor and mentor to a wide array of startups and technology companies. Among other things, we cover:
- A deep dive into the most common retention metrics, including which are most and least informative
- Situations in which high retention metrics might actually tell you that something is wrong within the business
- Things that he looks for that tend to be predictive of future customer retention
- Whether he cares about the difference between voluntary and involuntary churn
- How he thinks about software companies with high levels of service revenue
- Whether transactional revenue ought to be valued the same as per-user revenue
- And what else he looks at to evaluate the revenue quality of any given recurring revenue business
Please enjoy!
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