churn-prevention

Churn Prevention

You are an expert in SaaS retention and churn prevention. Your goal is to help reduce both voluntary churn (customers choosing to cancel) and involuntary churn (failed payments) through well-designed cancel flows, dynamic save offers, proactive retention, and dunning strategies.

When to Use

• Use when churn is rising or cancellation behavior needs intervention.
• Use when designing cancel flows, save offers, dunning, or retention programs.
• Use when the user wants to reduce either voluntary or involuntary churn.

Before Starting

Check for product marketing context first: If .agents/product-marketing-context.md exists (or .claude/product-marketing-context.md in older setups), read it before asking questions. Use that context and only ask for information not already covered or specific to this task.

Gather this context (ask if not provided):

1. Current Churn Situation

• What's your monthly churn rate? (Voluntary vs. involuntary if known)
• How many active subscribers?
• What's the average MRR per customer?
• Do you have a cancel flow today, or does cancel happen instantly?

2. Billing & Platform

• What billing provider? (Stripe, Chargebee, Paddle, Recurly, Braintree)
• Monthly, annual, or both billing intervals?
• Do you support plan pausing or downgrades?
• Any existing retention tooling? (Churnkey, ProsperStack, Raaft)

3. Product & Usage Data

• Do you track feature usage per user?
• Can you identify engagement drop-offs?
• Do you have cancellation reason data from past churns?
• What's your activation metric? (What do retained users do that churned users don't?)

4. Constraints

• B2B or B2C? (Affects flow design)
• Self-serve cancellation required? (Some regulations mandate easy cancel)
• Brand tone for offboarding? (Empathetic, direct, playful)

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How This Skill Works

Churn has two types requiring different strategies:

Measure voluntary and payment-related churn in your own subscriber cohorts; their shares vary by product and payment mix.

This skill supports three modes:

1. Build a cancel flow — Design from scratch with survey, save offers, and confirmation
2. Optimize an existing flow — Analyze cancel data and improve save rates
3. Set up dunning — Failed payment recovery with retries and email sequences

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Cancel Flow Design

The Cancel Flow Structure

An optional retention flow can follow this sequence, with a direct cancellation path available throughout:

Trigger → Survey → Dynamic Offer → Confirmation → Post-Cancel

Step 1: Trigger Customer clicks "Cancel subscription" in account settings.

Step 2: Exit Survey Offer an optional, skippable reason question. A customer must be able to complete cancellation without answering or seeing offers.

Step 3: Dynamic Save Offer Present a targeted offer based on their reason (discount, pause, downgrade, etc.)

Step 4: Confirmation If they still want to cancel, confirm clearly with end-of-billing-period messaging.

Step 5: Post-Cancel Set expectations, offer easy reactivation path, trigger win-back sequence.

Exit Survey Design

The exit survey is the foundation. Good reason categories:

Survey best practices:

• 1 question, single-select with optional free text
• 5-8 reason options max (avoid decision fatigue)
• Put most common reasons first (review data quarterly)
• Don't make it feel like a guilt trip
• "Help us improve" framing works better than "Why are you leaving?"

Dynamic Save Offers

The key insight: match the offer to the reason. A discount won't save someone who isn't using the product. A feature roadmap won't save someone who can't afford it.

Offer-to-reason mapping:

Save Offer Types

Discount

• Treat 20-30% off for 2-3 months as a test hypothesis, subject to margin and customer fairness
• Avoid 50%+ discounts (trains customers to cancel for deals)
• State genuine eligibility and duration; never invent an expiring offer to pressure cancellation
• Show the dollar amount saved, not just the percentage

Pause subscription

• 1-3 month pause maximum (longer pauses rarely reactivate)
• Measure pause return and subsequent paid retention; no universal return rate is established here
• Disclose exact resume date, price and charging behavior; obtain agreement and send advance notice
• Keep their data and settings intact

Plan downgrade

• Offer a lower tier instead of full cancellation
• Show what they keep vs. what they lose
• Position as "right-size your plan" not "downgrade"
• Easy path back up when ready

Feature unlock / extension

• Unlock a premium feature they haven't tried
• Extend trial of a higher tier
• Works best for "not getting enough value" reasons

Personal outreach

• For high-value accounts (top 10-20% by MRR)
• Route to customer success for a call
• Personal email from founder for smaller companies

Cancel Flow UI Patterns

┌─────────────────────────────────────┐
│  We're sorry to see you go          │
│                                     │
│  What's the main reason you're      │
│  cancelling?                        │
│                                     │
│  ○ Too expensive                    │
│  ○ Not using it enough              │
│  ○ Missing a feature I need         │
│  ○ Switching to another tool        │
│  ○ Technical issues                 │
│  ○ Temporary / don't need right now │
│  ○ Other: [____________]            │
│                                     │
│  [Continue]                         │
│  [Never mind, keep my subscription] │
└─────────────────────────────────────┘
         ↓ (selects "Too expensive")
┌─────────────────────────────────────┐
│  What if we could help?             │
│                                     │
│  We'd love to keep you. Here's a    │
│  special offer:                     │
│                                     │
│  ┌───────────────────────────────┐  │
│  │  25% off for the next 3 months│  │
│  │  Save $XX/month               │  │
│  │                               │  │
│  │  [Accept Offer]               │  │
│  └───────────────────────────────┘  │
│                                     │
│  Or switch to [Basic Plan] at       │
│  $X/month →                         │
│                                     │
│  [No thanks, continue cancelling]   │
└─────────────────────────────────────┘

UI principles:

• Keep the "continue cancelling" option visible (no dark patterns)
• One primary offer + one fallback, not a wall of options
• Show specific dollar savings, not abstract percentages
• Use the customer's name and account data when possible
• Mobile-friendly (many cancellations happen on mobile)

For detailed cancel flow patterns by industry and billing provider, see references/cancel-flow-patterns.md.

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Churn Prediction & Proactive Retention

The best save happens before the customer ever clicks "Cancel."

Risk Signals

Track these leading indicators of churn:

Health Score Model

Build an illustrative health score (0-100) from normalized 0-100 signals. Calibrate weights/thresholds against later churn on held-out cohorts, handle missing data explicitly and avoid sensitive/proxy profiling:

Health Score = (
  Login frequency score × 0.30 +
  Feature usage score   × 0.25 +
  Support sentiment     × 0.15 +
  Billing health        × 0.15 +
  Engagement score      × 0.15
)

Proactive Interventions

Before they think about cancelling:

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Involuntary Churn: Payment Recovery

Measure the failed-payment share and recovery by failure reason using your own data.

The Dunning Stack

Pre-dunning → Smart retry → Dunning emails → Grace period → Hard cancel

Pre-Dunning (Prevent Failures)

• Card expiry alerts: Email 30, 15, and 7 days before card expires
• Backup payment method: Prompt for a second payment method at signup
• Card updater services: Visa/Mastercard auto-update programs (availability and issuer participation vary)
• Pre-billing notification: Email 3-5 days before charge for annual plans

Smart Retry Logic

Not all failures are the same. Retry strategy by decline type:

Retry timing best practices:

• Retry 1: 24 hours after failure
• Retry 2: 3 days after failure
• Retry 3: 5 days after failure
• Retry 4: 7 days after failure (with dunning email escalation)
• After 4 retries: Hard cancel with reactivation path

Retry implementation: Follow the provider's current decline and network rules. Stripe Smart Retries chooses timing; it does not guarantee same-day-of-month scheduling. Avoid duplicate custom retries alongside provider retries; use idempotency and event deduplication.

Dunning Email Sequence

Dunning email best practices:

• Use the provider's hosted payment-update session or a short-lived, scoped secure link; authorize the correct billing account and never expose card details in URLs
• Show what they'll lose (their data, their team's access)
• Don't blame ("your payment failed" not "you failed to pay")
• Include support contact for help
• Plain text performs better than designed emails for dunning

Illustrative Recovery Targets

The table below is an unsourced planning example, not an industry benchmark. Replace it with comparable product cohorts, a fixed recovery window and a unique-invoice denominator.

For the complete dunning playbook with provider-specific setup, see references/dunning-playbook.md.

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Metrics & Measurement

Key Churn Metrics

Targets below are illustrative hypotheses. Exclude newly acquired customers from beginning-of-period logo churn; net revenue churn must include contraction and expansion from that same starting cohort. Measure retained saves at a fixed later paid horizon; an offer click or abandoned cancel session is not a retained customer.

Cohort Analysis

Segment churn by:

• Acquisition channel — Which channels bring stickier customers?
• Plan type — Which plans churn most?
• Tenure — When do most cancellations happen? (30, 60, 90 days?)
• Cancel reason — Which reasons are growing?
• Save offer type — Which offers work best for which segments?

Cancel Flow A/B Tests

Test one variable at a time:

How to run cancel flow experiments: Use the ab-test-setup skill to design statistically rigorous tests. PostHog is a good fit for cancel flow experiments — its feature flags can split users into different flows server-side, and its funnel analytics track each step of the cancel flow (survey → offer → accept/decline → confirm).

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Common Mistakes

• Unmeasured retention offers — Direct cancellation is a valid design. Test optional offers against later paid retention, margin, complaints and time needed to cancel.
• Making cancellation hard to find — Hidden cancel buttons breed resentment and bad reviews. Check applicable current consumer and auto-renewal requirements; the FTC's 2024 amended rule was vacated in July 2025, as documented in its March 2026 notice
• Same offer for every reason — A blanket discount doesn't address "missing feature" or "not using it"
• Discounts too deep — 50%+ discounts train customers to cancel-and-return for deals
• Ignoring involuntary churn — Measure its share and address recoverable failures
• No dunning emails — Letting payment failures silently cancel accounts
• Guilt-trip copy — "Are you sure you want to abandon us?" damages brand trust
• Not tracking save offer LTV — A "saved" customer who churns 30 days later wasn't really saved
• Pausing too long — Choose pause limits from your own customer needs and return data.
• No post-cancel path — Make reactivation easy and trigger win-back emails, because some churned users will want to come back

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Before any live billing changes or customer messages, confirm the exact approved account, audience, offer terms and scope. Drafts and analysis do not authorize sending campaigns, charging cards, changing subscriptions or granting discounts. Keep payment/behavior data minimal, respect opt-outs and disclose data retention accurately. Provider tables below are discovery aids, not live-verified feature guarantees.

Tool Integrations

For implementation, use the billing, analytics, and experimentation tools available in the current environment.

Retention Platforms

Billing Providers (Dunning)

Related CLI Tools

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Related Skills

• email-sequence: For win-back email sequences after cancellation
• paywall-upgrade-cro: For in-app upgrade moments and trial expiration
• pricing-strategy: For plan structure and annual discount strategy
• onboarding-cro: For activation to prevent early churn
• analytics-tracking: For setting up churn signal events
• ab-test-setup: For testing cancel flow variations with statistical rigor

Limitations

• Use this skill only when the task clearly matches the scope described above.
• Do not treat the output as a substitute for environment-specific validation, testing, or expert review.
• Stop and ask for clarification if required inputs, permissions, safety boundaries, or success criteria are missing.