Hey, it’s Tailor. Happy Monday. I was supposed to hit send on Friday, but… well, Friday didn’t go as planned so here we are!

Let’s jump right into newsletter #5 talking about how I think not having churn was actually a bad thing for me and my firm.

We lost our first 2 clients in the last few months and it’s taught me a few things.

For years I wore zero churn like a badge of honor. Looking back, it was silly and it was actually partially hurting us.

One client we lost was a very rural business with an owner who never sent documents on time. He was three months late on average with bank statements and questions, we had to call, text, email weekly for years. So why the hell did we keep that client so long?

We wasted countless hours chasing documents, deadlines missed, and we constantly felt like we were under-delivering.

In hindsight, I should’ve fired this client earlier. They were overall a net negative to our morale and to the business.

Having no churn is great. Client’s seem happy, the money keeps flowing, and it feels like the firm is incredibly stable, right?

You tell yourself you’re crushing it and that there’s nothing you need to change. As long as I keep doing “this”, I’ll keep getting paid and things will keep running smoothly.

But here’s the trap…. holding onto every client has these small invisible costs. The kind you don’t notice until they build up over time.

Zero churn feels safe, but it hides problems that pile up quietly in the background:

Firms are run by people and most people are searching for security and consistency in their lives.

We fear losing revenue so we hold onto it, even when it hurts the bigger picture or our employees.

That’s a scarcity mindset. And it’s tough to shake.

It shows up in all kinds of ways. Avoiding hard client conversations, holding onto low-fee clients, or confusing consistency with strength when it’s really just stagnation.

It feels safe, but in reality, it’s often just fear in disguise as success.

Healthy churn doesn’t mean you’re getting fired for bad service or doing a crappy job.

It means you’re leveling up and continuously pruning your client work. Here’s some things you could do to stay up-to-date on your pruning.

We’re currently in the process of going through the client list and reviewing/raising prices for those tougher/low fee clients.

When you build a business with healthy churn, a few things happen:

Having little churn feels like a big win, but some churn is a sign of proper growth.

Churn isn’t really the enemy. Stagnation is.

So… are you proud of your churn rate or are you holding onto clients maybe you shouldn’t be?

P.S. The client story above is mentioned in this tweet below. Another interesting reason they moved on…

I did this interview with Missive a couple of weeks ago showing how I assign and delegate tasks for our mid-market clients using their email application. If you’re in need for better email communication, definitely check them out.

I’ve used Missive app since 2022 at my firm.

Is there a client you would fire tomorrow if money wasn’t a factor and what’s that costing you now?

Thanks for reading and have an amazing week.

Tailor