Exercise Overview

Time Required: 60 minutes

Format: Team or individual strategic exercise

Deliverable: A comprehensive churn reduction action plan with root cause analysis and tactical initiatives

Objective

Develop a data-driven plan to reduce churn for an at-risk customer segment. You'll analyze churn patterns, identify root causes, design interventions, and create an implementation roadmap with success metrics.

Scenario

Your SaaS company's annual gross retention rate has declined from 90% to 85% over the last year. Analysis shows churn is concentrated in the small business segment (companies with 10-50 employees, $10K-$25K ARR contracts).

Additional Context:

• Total affected: 120 customers in this segment
• 30 have churned in the last 12 months
• 25 are currently at risk (health score Red)
• Average contract value: $15K ARR
• Potential revenue at risk: $825K ARR

Your mission: Create a plan to stabilize and improve retention in this segment.

Instructions

Part 1: Root Cause Analysis (20 minutes)

Analyze the Data

You've been provided these insights from churned customers:

Exit Interview Themes:

• 35% - "Too expensive for value received"
• 25% - "Product too complex, didn't use most features"
• 20% - "Lack of support / felt abandoned after onboarding"
• 15% - "Competitor offered better pricing"
• 5% - "Other reasons"

Usage Patterns of Churned Customers:

• Average login frequency: 2x per week (vs 5x for retained customers)
• Feature adoption: Used average of 3 features (vs 6 for retained)
• Support tickets: 2.5x more tickets than retained customers
• Training: Only 30% attended any training webinar
• CSM touchpoints: Spoke with CSM only 1-2 times during contract

Answer These Questions:

1. What are the top 3 root causes of churn in this segment?
   • Root cause 1:
   • Root cause 2:
   • Root cause 3:
2. What patterns do you notice? (e.g., is this about product fit, price, support, onboarding?)
3. What seems fixable vs what's a natural segment fit issue?
4. Are there early warning signals you could have caught?

Part 2: Immediate Interventions (20 minutes)

Save the At-Risk Customers (25 Red Health Score)

Design a 90-day save campaign for the 25 currently at-risk customers:

Outreach Plan:

Week	Action	Owner	Goal
Week 1
Week 2
Week 3
Week 4

Example Action:

• Week 1: CSM personal email + phone call to each at-risk customer. Goal: Understand their challenges and book a strategy session.

Offer Considerations:

Would you provide any incentives or accommodations? Check all that apply and specify details:

• Extended training/onboarding (specify: ___)
• Temporary discount/credit (specify: ___)
• Executive sponsor pairing (how it works: ___)
• Custom feature prioritization (process: ___)
• Dedicated success resources (what level: ___)
• Contract flexibility (month-to-month option, pause, etc.)
• Other: ___

Success Criteria:

• Target save rate: % (What % of the 25 would you hope to retain?)
• Budget allocated: $
• Team resources: CSM hours, leadership time

Part 3: Systemic Improvements (15 minutes)

Fix the Segment Strategy Long-Term

To prevent future churn in this segment, propose systemic changes:

1. Product/Packaging Changes:

• Should this segment have a different SKU or tier?
• Features to add, remove, or simplify?
• Pricing adjustments needed?

2. Onboarding Redesign:

• What should be different about onboarding for small businesses vs enterprise?
• Activation criteria tailored to this segment:
• Success metrics specific to them:

3. Customer Success Model:

• Should small business customers have dedicated CSMs or a pooled model?
• Proposed touch cadence for this segment:
• Self-service resources needed:

4. Training & Enablement:

• What content is missing for small businesses?
• Delivery format (webinar, video library, certification, office hours)?
• Frequency and timing:

5. Support Improvements:

• Given the high ticket volume, what changes?
• Consider: faster response SLA, dedicated SMB support, better documentation, AI chatbot, etc.

Part 4: Implementation Roadmap (5 minutes)

Prioritize your initiatives into a timeline:

Immediate (Next 30 days):

1. 2. 3.

Short-term (60-90 days):

1. 2. 3.

Medium-term (6 months):

1. 2.

Success Metrics:

Metric	Current	Target (6 months)	Target (12 months)
Retention rate for SMB segment	85%
Average health score
Feature adoption rate
Support ticket volume
Training attendance	30%
NPS (this segment)

Deliverable Format

Prepare a presentation or document with:

1. Executive Summary (1 slide/page)
   • The problem, root causes, and proposed solution
2. Root Cause Analysis (1-2 slides/pages)
   • Data insights and patterns
3. Immediate Save Plan (1-2 slides/pages)
   • 90-day campaign for at-risk customers
   • Expected outcomes and costs
4. Long-Term Segment Strategy (2-3 slides/pages)
   • Systemic changes to product, onboarding, CS model, support
   • Rationale for each change
5. Implementation Roadmap (1 slide/page)
   • Timeline with milestones
   • Resource requirements
   • Success metrics
6. Ask (1 slide/page)
   • What you need from leadership (budget, headcount, product priority, etc.)

Discussion Questions

1. Trade-offs: If you could only implement 3 of your proposed changes, which would have the biggest impact and why?
2. Segment Viability: Based on your analysis, is the small business segment worth serving? Or should you focus upmarket?
3. Quick Wins: What's one thing you could do this week that would help?
4. Cross-Functional Buy-In: Which teams need to be involved in this plan? How do you get their commitment?
5. Metrics: How long until you'd know if your plan is working? What's your decision criteria for doubling down vs pivoting?

Bonus Challenge

Win-Back Campaign:

Of the 30 customers who already churned, some might be winnable. Design a brief win-back campaign:

• Timing: How long after churn do you reach out?
• Message: What's your pitch?
• Offer: What makes coming back attractive?
• Realistic target: What % could you win back?

Roleplay Option

If working in a team, assign roles and simulate:

Internal Planning Meeting:

• CS Leader presents the plan
• CFO asks about ROI and budget
• Product Leader discusses feasibility of changes
• Sales Leader shares market insights
• Group decides on priorities together

This exercise simulates the real-world challenge of analyzing churn and building consensus for a multi-faceted solution.