We are all hearing the various statistics, data, models and trends being conveyed in increasingly sophisticated ways that promise new insights and new ways to achieve fantastic business success. However, none – absolutely none – of these “expert” analyzes or models address or even talk about what has been, according to my data tracking my organization over the last 15 years, the leading cause of death of growth and, with difference, the main cause of death. The biggest problem for cash flow and operations management: the divorce rate.
The popular statistic about the divorce rate is that about 50% of all marriages will end in divorce. I tend to agree with that statistic, but what it masks – or what the media doesn’t report – is that in many cases there are children involved in these divorces who are enrolled in things like ballet classes and other generators of economic activity. such as private school, music classes, cell phone use, etc., etc. The real problem then is not only that divorce occurs, but that when it occurs, at least 90% of the time, the two “adult” parties do not carry out amicable procedures and, therefore, the children are trapped in a vortex of uncertainty. as do each and every one of the companies that interacted with this family or their children.
Years ago divorce still occurred, but there seemed to be active and deliberate efforts to minimize the impact on children. This is confirmed in our statistics because we show clear divorce trends dating back to the early 1990s, but it is especially in the last five years that the trend has moved away from “stealth” or “soft” divorces (in which our organization would detect the divorce but only after it happened and was resolved, but while the children of the family continued with their activities, maintained a healthy focus and did not appear traumatized) in “nuclear” or “armageddon” divorces where the procedures are contentious, parents are obviously badmouthing each other in front of children because children turn around and mention these things in class, children’s concentration drifts and they become indifferent, and the financial structure needed to pay for activities like ballet class She looks totally disturbed. resulting in minimal overdue checking account balances and usually ending in financial failure and the student having to discontinue lessons.
What we have determined is that, year after year, 30% of our customer base will discontinue. Typically, 40% to 45% growth with new customers offsets this, so our growth trend is still positive, but consider this: of that 30% loss, at least 75% is directly due to bad divorces. That is awesome. If the divorce rate were to drop to a more historically normal rate of 20%, our year-over-year growth would not be 10% to 15%, but rather 25%. It’s a huge difference. The “divorce factor,” as we call it, is a cost at least as large as our annual insurance and utility bills, plus about half of our combined advertising budget. The worst thing is that unlike other cost factors that facilitate business operations, this cost factor is completely negative and does not produce any positive side effects. In fact, one could argue that as children are exposed to these “nuclear” divorces and the associated social trauma, later in life they become, if not more likely, at least more to accept this as a normal status than in turn would serve to amplify this already dire trend in society, leading to further increases in the cost factor of divorce for all businesses and organizations.
Now, it’s not entirely clear what any organization or company can actually do to effect a change in this trend, but one thing is certain: reduce the divorce rate, and our data strongly suggests that there would be a dramatic increase in income. Worldwide. board. An increase as big as if you could suddenly stop paying insurance, all public services and no longer need to do much advertising. No other cost factor even comes close to this, aside from critical expenses like payroll or space rental. Therefore, this author suggests that companies and organizations begin to focus mental energy and creative capital not on new ways to manipulate the numbers, but on a solution to this real, onerous and ever-increasing cost factor: the rate of divorces.
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