Kindel’s 2nd Law

Kindel’s 2nd Law – Companies with a subscriptions-based business model eventually behave in ways hostile to that company’s customers.

Charlie Kindel – July 2019

Woot! I now have two laws named after me. This law was originally coined in a tweet:

This law is a law due to companies’ getting focused on a made-up LTV (lifetime value of a customer), CAC (cost to acquire a customer), and churn rate. Especially churn.

Once a subscription business becomes real for a company, the motions of that company become dominated by a) acquiring debt to pay for ever increasing CAC, and b) trying to reduce churn.

Churn can (theoretically) be reduced by making the product/service better or by making it harder for customers to leave the service. Efforts to enhance the value of the product end up getting harder and harder to justify. Companies default to reducing churn by doing things hostile to customers.

Where’s the one-click unsubscribe button for your cable TV sub? Ever ask yourself why they make it so hard to un-sub?

If you don’t think this law is real, I’m willing to bet you haven’t really studied CAC and churn.

See Also:

Kindel’s LawEvery payment system eventually becomes an anti-fraud system.

Kindel’s 3rd LawAmazon will enter every existing business, channel, and market. If said business, channel, or market doesn’t already exist, they will try to invent it.

Debate this topic with me:

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