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22-11-2014, 03:45 PM
#5291
Churn will certainly come down in the US though, give it a couple of years and I would say it will be well under 3%.
Brave assertion - the churn has INCREASED 2014 over 2013.
I don't/haven't owned any of these other than very early on, and haven't taken too much interest other than to watch the rising price in complete disbelief, but it seems to me that this churn rate statistic might have been the catalyst for the price collapse from the $45 heady days, but only those with an understanding of the underlying consequences were able to take advantage of the idiotic prices and get out.
Seems the dawn of realisation is only just hitting the mainstream?
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22-11-2014, 03:46 PM
#5292
Originally Posted by Casino
It may even drop in the short-term. My suspicion is that the H&R Block deal didn't go down well costing them a few partners over the last few months. May also be the reason why Karpas got the boot. But that's a one-off and out of the way now. Churn will always sit a bit higher in the US because of direct business but I see that as a positive.
But 5000 odd defections in the last half is a staggering number.
Assume there is some 'stickability' and customers don't just give it away after a few months that 5,000 needs to put in the context of say the number of customers thy had a year ago .....seems mass desertion to me
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22-11-2014, 04:51 PM
#5293
Originally Posted by winner69
But 5000 odd defections in the last half is a staggering number.
Assume there is some 'stickability' and customers don't just give it away after a few months that 5,000 needs to put in the context of say the number of customers thy had a year ago .....seems mass desertion to me
It is. So is the number of negative comments the H&R deal drew on the Sleeter blog:
http://www.sleeter.com/blog/2014/05/xero-and-hr-block/
I'm baffled by the outrage. Accountants in the US seem extremely insecure and react allergic to any change. Lesson learned.
I agree with you in that cloud customers are sticky but perhaps not as sticky as Xero makes it out to be. You could argue that this works both ways. If Intuit can get Xero partners on the new QBOA, lots of existing customers will be in jeopardy. Xero may in turn be able to flip some of the 739000 QBO customers somehow.
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22-11-2014, 05:13 PM
#5294
Originally Posted by winner69
But 5000 odd defections in the last half is a staggering number.
Assume there is some 'stickability' and customers don't just give it away after a few months that 5,000 needs to put in the context of say the number of customers thy had a year ago .....seems mass desertion to me
The stickyness would increase over time. If you have been using it 3 months, not such a big deal, if you've been using it for 3 years, then more sticky. I think this is one reason the churn will decrease. As a very high % of customers are new (of total US customers), so the product isn't that sticky yet.
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23-11-2014, 10:29 AM
#5295
Member
Originally Posted by Harvey Specter
The stickyness would increase over time. If you have been using it 3 months, not such a big deal, if you've been using it for 3 years, then more sticky. I think this is one reason the churn will decrease. As a very high % of customers are new (of total US customers), so the product isn't that sticky yet.
Exactly. It would be useful if XRO broke down the churn by length of time since the customer signed up. That would show a clearer picture and allow comparison across geographies. With any product you will have tire kickers who try it out for a few months and then drop it. With the base number in the US being lower, and the growth rate higher than NZ/Aus, those that drop out in the first few months will have a greater impact on overall churn %. Losing customers in the first few months is expected, losing long term customers would be a worry.
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23-11-2014, 11:07 AM
#5296
Originally Posted by Bilbo
Exactly. It would be useful if XRO broke down the churn by length of time since the customer signed up.
Alternativle, a graph showing churn for the various markets as customer numbers increase.
You would expect it to reduce over time to its long run average. Based on NZ/Aus, this looks to be about 1%.
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23-11-2014, 02:19 PM
#5297
Member
Bilbo and Harvey, you guys are bang on the money - that point appears to have been lost on some people. For that reason alone, churn will improve over time (and is why it has done so in other regions). Casino's point/hunch re the H&R Block deal (if correct) would have had a significant impact as well, and would help to explain the small increase in churn in the US over the last 12 months.
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23-11-2014, 06:03 PM
#5298
Originally Posted by twotic
Bilbo and Harvey, you guys are bang on the money - that point appears to have been lost on some people. For that reason alone, churn will improve over time (and is why it has done so in other regions). Casino's point/hunch re the H&R Block deal (if correct) would have had a significant impact as well, and would help to explain the small increase in churn in the US over the last 12 months.
You would think with the mass amounts of data going through Xero they'd be able to do this eh? I'm sure Drury would take it on board as a better way to visualise what on first glance looks pretty horrendous!
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23-11-2014, 06:55 PM
#5299
Originally Posted by BFG
You would think with the mass amounts of data going through Xero they'd be able to do this eh? I'm sure Drury would take it on board as a better way to visualise what on first glance looks pretty horrendous!
I am sure they do know it and they made a comment that churn was at similar levels for other markets.
remember this is only the first time they have published these stats
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23-11-2014, 08:02 PM
#5300
Originally Posted by Harvey Specter
I am sure they do know it and they made a comment that churn was at similar levels for other markets.
remember this is only the first time they have published these stats
Agreed. I just think it would look better in a squiggly line chart with a forecasted downward trend compared to how NZ and Aus markets tracked earlier in life.
I do love my squiggly lines
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