Chloe Dubois Advisory memo Decision Call · USD 180
Customers do not leave at renewal. They leave at the third invoice.
60 minute call, 19 September. Reviewed and signed off by Chloe Dubois on 21 September.
You have been redesigning the renewal conversation for a year and churn has not moved. The renewal is where the leaving is processed, not where it is decided. On your own support and billing data, the decision is made around the third invoice, about four months earlier.
Customers who churn show the same signature: a support contact in month two that is resolved slowly, then a billing query at the third invoice that is handled by a different team with no knowledge of it, then silence. By renewal they have been gone for four months. Fixing the renewal conversation cannot reach them.
The question
What was asked, and what was reviewed
As you put it: "We have rewritten the renewal process twice. Churn is the same. What are we not seeing?"
| Reviewed | Source |
|---|---|
| Churned accounts, 24 months, 61 accounts | Supplied |
| Support history per account | Supplied |
| Billing query history per account | Supplied. This is where it was |
| Product usage by month | Supplied |
| The two renewal process designs | Supplied |
| Nine exit conversations | Supplied. Clause 3 |
The signature
What 41 of 61 churned accounts have in common
-
Onboarding completes normally
No difference between churners and stayers at this point.
-
A support contact, resolved in over 5 days
Median 6.2 days for this group against 1.8 days overall. The issue is resolved, so nothing flags.
-
A billing query at the third invoice
Usually about something the month two contact caused: a plan change, a credit, a pro-rata line.
-
Handled by finance, who cannot see the support history
Correctly, politely and with no knowledge that this is the second problem in six weeks.
-
Usage declines, contact stops
No complaint, no escalation. They have decided.
-
Renewal, declined
Where you are looking, and four months too late.
| Pattern | Churned accounts | Retained accounts |
|---|---|---|
| Support contact in month 2 | 54 of 61 | Similar. This alone is not a signal |
| Resolved in over 5 days | 47 of 54 | 11 percent |
| Billing query at invoice 3 | 43 of 61 | 9 percent |
| Both, in sequence | 41 of 61, or 68 percent | 3 percent |
Either signal alone is weak. The sequence, slow support then a billing query, appears in 68 percent of churners and 3 percent of everyone else. That is a usable predictor four months before the renewal.
Why
What the nine exit conversations said
Nobody mentioned price. Nobody mentioned a competitor. Five of the nine said a version of the same thing.
It was not that anything went badly wrong. It was that I had to explain it twice to two different people and I realised I was going to have to keep doing that.
Churned customer, 14 months, from the exit conversation notes
Next
Two changes, in order
Give finance the support history
When a billing query arrives, whoever answers it can see the last 90 days of support contacts on that account. Read-only, one panel. Your systems already connect. On the pattern above this is the single highest-value change available and it is a small piece of work.
Flag the sequence
When an account has a support contact resolved in over 5 days followed by a billing query within 45 days, raise it. Not to a renewal owner, to whoever can call them that week. You have four months of warning and currently use none of it.
- Do not redesign the renewal process a third time. It is not where the problem is
- Measure the sequence going forward, monthly, so you can see whether the flag works
- Tell both teams what the data shows. Neither is at fault and both will want to fix it
- Give it two quarters before judging. The customers you save this month renew in seven