Churn is a delayed decision.

They didn't ghost you. They kept showing up but stopped talking about next year.

By the time churn shows up in the reports, something has already gone downhill, not with the partner, but with the perception the vendor had created of them. The reality is, churn does not happen at renewal: it’s a slow decision before this period. It forms quietly, weeks or several months prior and is rarely apparent.

The cancellation email is the last stroke. The decision is made well in advance before the renewal discussions. And often, the tell-tale signs are in the complexion of the relationship not the data, noticeable only to those attentive enough.

Signs your customer is about to leave

The change is very subtle if a customer is about to churn. They quit asking about future releases, bug fixes and permanent solutions to recurring issues. Topics that hitherto sparked curiosity or ignited excitement now receive polite acknowledgement with no desire to probe further. 

As the product’s evangelist, they deliberately bring people in; introduce other colleagues, mention it to teams at meetings across the organization to expand usage. But when they mentally check out, that motion stops. No more introductions and internal advocacy. The relationship gets warm and slowly reverts to something closer to a prospect than a partner. 

To spot churn, pay attention to the communication. There is a particular tone to the quality of the communication when a customer is carefully winding down a relationship. The language becomes more formal in a slightly friendly manner. Some customers suddenly become agreeable, all in efforts to avoid extended conversations on the product. The intention is to be decent about the breakup, and this can easily be misconstrued as a healthy account. 

In some instances, the main person with budget authority delegates other colleagues with less spending decision-making power to attend meetings. These deputies will show up with the most convincing explanations on their manager’s absence. Note, no absence, especially of senior managers should be taken lightly. This speaks volumes more than one would admit.

A manifestation of one or more of these implies your customer is about to leave. They generally become disengaged on any promised outlook and quietly count down to the end of the current contract. On the surface, everything looks fine, but to the critical mind, the account is on life support.  

The decision point

All churn stories if investigated carefully can be traced to a moment or series of activities: a product champion left the organization, or a budget review compelled leadership to reconsider current solutions. Other times, it’s the fact that the product did not quite deliver on its promise, hence, forcing the customer to entertain a product demo from another vendor which goes exceptionally well. At this point, the customer stops believing the solution from the current vendor can solve their persistent problems.

As expected, the vendor is the last to know of the customer’s decision to leave, not because the latter is being deceptive, it’s simply because no one asked the right questions at the right time. And from the customer’s perspective, there was no particular reason to volunteer this information. 

Some organizational transitions and churn-risk multipliers: a change in management at the customer’s organization, a new head of department who was not part of the purchasing decision, a change management process which shifts priorities, or a new head who wants to add their signature to the tool stack. These changes are hardly flagged in CRM notes because they require the CSM to have a relationship deep enough to hear about them. 

Is this preventable? 

In hindsight, almost every churn was preventable. This is easy to say but difficult to sit with. It implies someone dropped the ball but doesn’t say who and/or when. The intent of this observation is not to assign blame but to refocus lenses. 

If we consider churn as an event, then for a leaving customer, the only intervention available is at a specific event. This could be the renewal conversation, the retention discount or the last-minute escalation chaos. At this stage, the cards are already not in your favour.

If we however consider churn as a delayed decision, a conclusion the customer reaches after a long period of disappointment and disengagement, then there are many opportunities before the renewal where the vendor can change the direction. This is achievable by refocusing the QBR conversations, asking critical service-relevant questions several months before the renewal, or building a relationship in the customer’s organization that goes a little deeper than one person. 

To treat churn as an event optimizes for saving an account. To treat churn as a process optimizes for not losing them. 

Practices that can change the outcome

To catch churn in good time, you do not necessarily need a better dashboard. What’s important is building the habit of asking the slightly uncomfortable questions to get answers that customers will not ordinarily volunteer. More importantly, it should be asked at a time when something can be done about the answers. 

“Is there something we promised that you feel has not been fulfilled yet?” is a question that should be normalized. This question posed to a silently dissatisfied customer at the right time will elicit the honest response, especially when there is still time to fix issues. On the contrary, asking the same question in the 11^th month for a 12-calendar month contract is a funeral.

The customers who stay are the ones where someone asks the real and hard questions in good time to act on the answers. This is the full practice. It can be uncomfortable, but it’s not supposed to be complicated. The full practice is not based primarily on numbers, rather, openness to engage in difficult conversations. Professionals who are great at this understand what it takes to win.