Churn Analysis Skill
Produce a structured churn analysis that goes beyond the headline rate — identifying why customers leave, which segments are most at risk, and what interventions will have the highest impact on retention.
Required Inputs
Ask for these if not already provided:
- Time period being analysed (e.g. Q1, last 12 months)
- Total customers at start of period and customers churned
- ARR or revenue lost to churn
- Churn reasons data — exit survey results, CSM notes, support data, or sales loss reasons
- Customer segments — by tier, industry, cohort, or product line
- Current retention rate if known
- Any recent changes — pricing, product, support model — that may have affected churn
Churn Categories
Always classify churn before analysing it:
| Category | Definition | |---|---| | Voluntary — avoidable | Customer left due to a problem we could have addressed (product gaps, poor onboarding, relationship failures) | | Voluntary — unavoidable | Customer left for reasons outside our control (budget cuts, acquisition, company shutdown) | | Involuntary | Payment failure, contract non-renewal by mistake, admin error |
The interventions for each category are different. Conflating them leads to wrong conclusions.
Output Format
Churn Analysis: [Product / Segment / Company]
Period: [Start date] — [End date] Prepared by: [Name] | Date: [Date]
Headline Numbers
| Metric | Value | |---|---| | Customers at start of period | [N] | | Customers churned | [N] | | Customer churn rate | [X]% | | ARR at start of period | £/$/€[X] | | ARR lost to churn | £/$/€[X] | | Revenue churn rate (gross) | [X]% | | ARR from expansions (same period) | £/$/€[X] | | Net revenue retention (NRR) | [X]% |
Benchmark context:
- Customer churn rate: [X]% vs. industry benchmark [Y]% — [above / below / in line]
- NRR: [X]% — [What this means: above 100% = expansion offsets churn; below 100% = shrinking base]
Churn Breakdown by Category
| Category | Customers | % of churn | ARR lost | |---|---|---|---| | Voluntary — avoidable | [N] | [X]% | £/$/€[X] | | Voluntary — unavoidable | [N] | [X]% | £/$/€[X] | | Involuntary | [N] | [X]% | £/$/€[X] | | Total | [N] | 100% | £/$/€[X] |
Avoidable churn as % of total churn: [X]% — this is the number we can actually influence.
Churn Reasons — Avoidable Churn Only
Rank by frequency. Include ARR weight where data allows.
| Reason | Count | % of avoidable churn | ARR lost | Representative quote | |---|---|---|---|---| | [Reason 1 — e.g. "Product missing key feature"] | [N] | [X]% | £/$/€[X] | "[Quote]" | | [Reason 2] | [N] | [X]% | £/$/€[X] | "[Quote]" | | [Reason 3] | [N] | [X]% | £/$/€[X] | "[Quote]" | | [Reason 4] | [N] | [X]% | £/$/€[X] | "[Quote]" | | Other | [N] | [X]% | £/$/€[X] | — |
Theme synthesis: [2–3 sentences grouping the top reasons into 2–3 themes. E.g. "The top three reasons cluster around two themes: product gaps in [area] (affecting X% of avoidable churn) and onboarding failures where customers never achieved value (Y%)."]
Churn by Segment
Identify which segments over- or under-index for churn.
By Tier
| Tier | Churn rate | vs. Overall | Notes | |---|---|---|---| | Enterprise | [X]% | +/-[X]pp | | | Mid-Market | [X]% | +/-[X]pp | | | SMB | [X]% | +/-[X]pp | |
By Cohort (Acquisition Year)
| Cohort | Churn rate | Notes | |---|---|---| | [Year 1] | [X]% | | | [Year 2] | [X]% | | | [Year 3] | [X]% | |
By Industry / Use Case (if data available)
| Segment | Churn rate | Notes | |---|---|---| | [Segment 1] | [X]% | | | [Segment 2] | [X]% | |
Key pattern: [Which segment has the highest churn rate and what likely explains it]
Timing Analysis
- Average contract length before churn: [X months]
- Highest-risk moment: [e.g. "Month 3 — when trial value has worn off but full adoption hasn't happened"]
- Churn timing distribution:
| When churn occurred | % of churned accounts | |---|---| | 0–3 months | [X]% | | 3–6 months | [X]% | | 6–12 months | [X]% | | 12+ months | [X]% |
Early Warning Signals
Based on the churned accounts, identify the signals that preceded churn (and could have triggered earlier intervention):
| Signal | Lead time before churn | How to detect | |---|---|---| | [Signal 1 — e.g. "DAU/MAU dropped below 15%"] | [~X weeks] | [Usage dashboard / alert] | | [Signal 2 — e.g. "No QBR in 90+ days"] | [~X weeks] | [CRM flag] | | [Signal 3 — e.g. "Champion left the account"] | [~X weeks] | [LinkedIn alert / CSM tracking] | | [Signal 4] | [~X weeks] | [Detection method] |
Intervention Recommendations
Ranked by estimated impact × feasibility.
| Intervention | Addresses | Est. churn reduction | Effort | Owner | |---|---|---|---|---| | [Intervention 1 — e.g. "Improve onboarding for [segment] with dedicated 30-day check-in"] | [Reason 1] | [X accounts / £X ARR] | Low / Med / High | [Team] | | [Intervention 2] | [Reason 2] | [X accounts / £X ARR] | Low / Med / High | [Team] | | [Intervention 3] | [Reason 3] | [X accounts / £X ARR] | Low / Med / High | [Team] |
Priority call: [Which one intervention, if implemented this quarter, would have the biggest impact and why]
What We Don't Know (Data Gaps)
- [Data gap 1 — e.g. "Exit survey response rate is only 30% — the reasons data may not be representative"]
- [Data gap 2 — e.g. "No product usage data for SMB tier — can't confirm usage signal correlation"]
- [Data gap 3]
Quality Checks
- [ ] Churn rate is correctly calculated (churned ÷ starting cohort, not end-of-period total)
- [ ] Avoidable and unavoidable churn are separated — interventions target avoidable churn only
- [ ] Churn reasons are customer-reported, not internally assumed
- [ ] Segment analysis identifies which segments over-index — not just averages
- [ ] Early warning signals are specific and detectable, not generic ("low engagement")
- [ ] Interventions link directly to the top churn reasons — no recommendations without a root cause match