You Know Someone is Going to Churn – Now What?

Customer attrition (commonly called churn) is an ever-present threat that can quickly derail any company's growth and profitability. By the time a customer actually churns, it's often too late to save them. That's why proactively identifying at-risk customers through comprehensive churn analysis is so critical to maintaining a healthy net retention rate.

While there are countless potential signals that may indicate churn risk, the core drivers that actually cause customer attrition tend to fall into several key categories. Understanding these root causes allows you to take more targeted, effective action to resolve the issues before losing that customer and damaging your annual churn rate.

Reason #1: Not Realizing Enough Value

Some customers simply aren't seeing or getting enough value from your product to justify continuing their subscription.

Red Flags 🚩

• Low product usage/engagement metrics on your customer health score
• Not adopting key features that drive customer success
• Negative feedback about missing must-have functionality

How to Fix It ✅

• Guide customers through onboarding to achieve "aha" moments
• Gather feedback on their goals to better match use cases
• Provide educational resources to help them unlock more value
• Identify friction within the product that increases time to achieving "aha" moments
• Use quarterly business reviews (QBRs) to reset expectations and show delivered value

Reason #2: Wrong Product Fit

In other cases, the customer may have realized your product doesn't actually solve the core problem they need addressed, or their needs have fundamentally changed.

Red Flags 🚩

• Concerns about lacking certain capabilities
• Misalignment on intended use cases
• Low and inconsistent product usage
• High volume of support tickets

How to Fix It ✅

• Validate their core problems and needs
• Reframe your product's value proposition for their specific context
• Help customers discover other problems your product solves that they might have
• Implement a proper customer lifecycle management approach
• If they are truly a mismatch, gracefully acknowledge and offboard

Reason #3: Pricing Issues

For some customers, the decision to churn is primarily driven by pricing factors and budgetary constraints. A company's budget for a product is usually dictated by how much value they receive from the product. So, if you're seeing lots of inquiries about discounts and downgrades due to price, your customers may not be seeing or understanding the value they get out of your product, which affects your Monthly Recurring Revenue (MRR).

Red Flags 🚩

• Inquiries about discounts or downgrades
• Reduced usage of paid product tiers/add-ons
• Questions about Annual Recurring Revenue (ARR) commitments
• Average Contract Value (ACV) misalignment with realized benefits

How to Fix It ✅

• Remind them of the value they've already received from your product
• Offer pricing incentives or extensions through tiered pricing models
• Surface quick-win use cases to realize more ROI
• Quantify costs of not having your solution
• Consider willingness to pay analysis to optimize pricing strategy

Reason #4: Switching to a Competitor

Customers may also be lured away by another product they now perceive as a better fit, potentially impacting your logo retention.

Red Flags 🚩

• Data export or offboarding requests
• Asking for competitor feature comparisons
• Scrutinizing contract renewal dates
• Reduced engagement with your customer success manager (CSM)

How to Fix It ✅

• Offer incentives to retain the customer
• Directly address any product gaps or shortcomings
• Differentiate your unique strengths and value
• Highlight potential switching costs and risks
• Implement a land and expand strategy to deepen product adoption

Reason #5: Poor Customer Experience

In some cases, churn happens due to issues with the service and support experience provided, eroding the customer relationship.

Red Flags 🚩

• Frequent complaints or escalations
• Negative sentiment in feedback/exit surveys, NPS scores, and emails with CSMs
• Long response or resolution times for support tickets
• Zendesk integrations data showing unresolved issues

How to Fix It ✅

• Analyze and fix broken touchpoints
• Prioritize proactive education and enablement
• Amp up attention and resources for key accounts
• Offer discounts, temporary upgrades or other small ways you can make up for their poor experience
• Ensure they are made aware when issues they've raised have been resolved. Make sure to thank them for reporting bugs and issues.
• Implement a comprehensive customer engagement strategy

Here's an email template you can use to reach out to a customer after a particularly poor customer experience:

Reason #6: Internal Factors

Churn can also stem from changes internally at the customer's company outside of your control.

Red Flags 🚩

• Your champion left their role
• Budget freezes or funding issues
• Company being acquired, downsized or reorganized

How to Fix It ✅

• Identify and nurture relationships with other internal advocates and stakeholders at the same company
• Offer options to consolidate/move licenses
• Explore geographic and departmental penetration in the company. Is there another location or department that could benefit from your solution?
• Connect with the chief customer officer or equivalent leadership role

Reason #7: Payment Issues

Sometimes involuntary churn happens due to payment processing problems that can be easily resolved.

Red Flags 🚩

• Card issuer rejection notices
• Soft decline vs hard decline patterns
• Generic decline messages
• Card_velocity_exceeded errors

How to Fix It ✅

• Implement dunning management systems
• Proactively contact customers before card expiration
• Offer alternative payment methods
• Use retry logic optimized for payment recovery
• Analyze payment failure patterns for systemic issues

Reason #8: Customer No Longer Needs the Solution

Sometimes customers simply no longer need to keep using your product as their situation has changed.

Red Flags 🚩

• Drastically reduced product usage
• Inquiring about offboarding or account closure
• Exporting, downloading or archiving their data
• Stating their use case is being handled another way

How to Fix It ✅

• Help customers discover other problems your product solves that they might have
• If a customer still has the problem, but are solving it another way, highlight potential risks of their new approach. This is a good opportunity to compare your solution to competitors.
• Provide a way to offboard while communicating that it's easy for them to reactivate in the future through a reactivation campaign.
• It's also a good practice to allow customers to pause their plan instead of canceling.

Implementing a Proactive Churn Prevention Strategy

The key is continuously monitoring for churn signals across your user base, diagnosing the likely root cause through proper churn analysis, and then executing tailored retention campaigns. When calculating your gross churn vs net churn, remember that retaining existing customers is far more cost-effective than acquiring new ones (as your CAC calculator will confirm).

Modern churn software solutions like Upollo bring all your customer data together to deliver proactive churn insights so you can:

• Send churn risk scores directly into your CRM (HubSpot, Salesforce), marketing systems (Intercom, Customer.io), and other communication channels
• Run automated email, in-app messaging and incentive campaigns based on the identified churn reason
• Escalate concerning signals for high-touch outreach by sales, customer success managers, or product teams
• Measure, analyze feedback, and continuously refine your churn prevention playbook based on what tactics are actually impacting customer attrition
• Use the retention ratio formula to track improvements over time

Retaining customers before they leave is vastly more achievable than trying to win them back after they've churned. By proactively recognizing the real root causes of potential customer attrition and addressing them head on, you can resolve issues and keep your customers engaged, retained, and successful—ultimately improving both your gross revenue retention and customer success metrics.