We all hear the various statistics, data, models and trends being shared with increasing sophistication, promising new insights and new paths to fantastic business success. However, none – absolutely none – of these analytics or “expert” models address, or even talk about, what my organization’s tracking data shows has been the number one growth killer for the last 15+ years for cash flow and operations management: the divorce rate.
Common divorce rate statistics say that about 50% of all marriages end in divorce. I tend to agree with this statistic, but what this statistic obscures – or what the media does not report – is that in very many cases these divorces involve children who, in turn, attend ballet classes and other economic activity generators, private school, music lessons, cell phone use, etc. The real problem is not only that a divorce occurs, but also that in at least 90% of cases the two “adult” parties do not negotiate amicably, leaving the child or children in a whirlwind of uncertainty are caught. as well as all companies that have been in contact with this family or their children.
Years ago, divorces still occurred, but there seemed to be active and conscious efforts to minimize the impact on the children. This is confirmed by our statistics as we show clear divorce trends going back to the early 1990s, but especially in the last five years the trend has been away from “secret” or “soft” divorces (although our organization would still detect the divorces ). only after it had happened and been resolved, but as long as the children of the family continued their activities, maintained a healthy focus and did not appear traumatized) in “nuclear” or “Armageddon” divorces where the procedure is controversial, it is the parents Apparently they talk badly about each other in front of the children because the children turn around in class and mention these things, the children’s attention is dulled and they become listless, and the financial structure required to fund activities such as ballet classes is completely disrupted This results in a minimum of current account balances that are overdue and usually results in financial failure and the student having to drop out of classes.
What we’ve found is that a full 30% of our customer base will abandon year-over-year. Typically around 40-45% growth in new customers offsets this, so our growth trend is still positive, but consider this: of that 30% loss, at least 75% is directly attributable to bad divorces. This is breathtaking. If the divorce rate fell to a historically normal rate of 20%, our annual growth would not be 10-15% but more like 25%. That’s a huge difference. The “divorce factor,” as we call it, is at least as high as our annual insurance and utility bills plus about half of our advertising budget combined. What’s worse is that, unlike other costs that make doing business easier, this cost factor is completely negative and does not bring any positive side effects. In fact, one could argue that when children are exposed to these “nuclear” divorces and the social trauma that comes with them, later in life they are, if not more vulnerable, then at least more inclined to accept this as a normal status, which again would be helpful in reinforcing this already shameful trend in society, which is leading to a further increase in the cost of divorce for all companies and organizations.
It’s not at all clear what an organization or company can really do to change 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 across the board . An increase so big that it’s like you could suddenly stop paying for insurance and all the utilities and no longer have to advertise much. Other than critical expenses like payroll and space rental, no other single cost comes even close. Therefore, this author suggests that companies and organizations begin focusing their mental energy and creative capital not on new methods of distributing numbers, but on solving this ever-increasing, burdensome, and real cost: the divorce rate.
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