How to identify the right signal to prevent customer churn

By identifying the right signals and leveraging customer support as a key component of your retention strategy, you can proactively address issues, enhance customer satisfaction, and ultimately reduce churn rates.
Priyanshu Anand
September 11, 2023

How to identify the right signal to prevent customer churn

By identifying the right signals and leveraging customer support as a key component of your retention strategy, you can proactively address issues, enhance customer satisfaction, and ultimately reduce churn rates.
No items found.
Priyanshu Anand
September 11, 2023

Why reducing churn is important

In today's competitive business landscape, customer churn can be a silent killer for companies. The constant struggle to acquire new customers often overshadows the importance of retaining existing ones. Customer churn refers to the rate at which customers stop doing business with a company. Churn can very significantly increase revenue and help meet monthly and annual revenue targets for your business. Let’s take an example.

Reducing churn can equate to much better revenue

According to research, a 5% increase in customer retention can increase your profits by 25% to 95%, which can significantly impact your business. A few industry benchmarks for you -

  • For established and successful SaaS companies, the churn rate should be around 5-7% annually.
  • In the case of early-stage SaaS companies, the ideal churn rate is around 5% monthly.
  • SaaS startups serving SMBs tend to operate with higher monthly churn, somewhere between 2.5% and 5%+.

Before we can see how you can identify the right signals, let’s understand what can cause churn.

What causes churn?

Poor Customer Experience

The first and the most important reason people leave is because of a bad experience. Customers are more likely to leave if they have a consistently negative experience with your products or services. This is why it’s important to have customer success and customer support in the front lines of your business, doing the most to ensure customers get exactly what they need, exactly when they need it.


Competition is a sign that there’s a market for your business. But this also implies a cut-throat approach to doing business. One of the most important competitive factors is pricing. If someone else is offering a similar product at half the price, customers will most definitely consider it. So you have to ask yourself constantly “why are my prices justified?” or “why would someone pay more for what I have to offer compared to others?”

Customer support in itself is a competitive metric. How customers feel when they’re a part of your revenue stream can be a definitive deal-breaker when choosing a long-term partner. In fact, a lot of companies might even be willing to pay a little more if it means better support.

Product-Market fit

Oftentimes, customers just can’t make the most of your product because it isn’t meant for them. You need to recognize this pattern and make sure that customers are getting their pennies’ worth when they’re using your product. A recurring pattern where the product goes underutilized might mean that you’ve not really found the right market. It’s also important to listen to your early customers and shape the product accordingly.

Bad onboarding

First impressions can go a long way in establishing early relations with a customer or even a prospect. Having dedicated customer success professionals, priority support, consistent 1-on-1 check-ins, feedback, etc., reinforces the customer’s importance to you in their eyes. On the other hand, the absence of these metrics can make a bad early impression on the customer. And a negative first impression is difficult to mend later on which is why you need to nail this right off the bat.

How to recognize Churn Signals

Inconsistent product support

There can be countless reasons for not being able to provide instant support to your customers. Though your support team might be doing their best, from the customer's end, they might’ve been expecting more or better. You need to be able to constantly monitor how well is the support offered to your customers, what’s the average response time, and how can it be further optimized to improve the experience. Bad customer experience, although might not instantly amount to churn, eventually becomes a big enough reason for customers to move on.

What can you do about it?

Even your support team needs the right support to ensure bad customer experience never happens. With the introduction of AI, support teams will now be able to leverage AI-powered support bots that can offer more human-like support instantly.

Threado AI lets you install an intelligent bot in your product, on your website, and on your Slack or Discord workspaces. This bot auto-responds to queries and can be leveraged to solve most of the customer concerns without the need for a support professional.

  • Train your bot on company support docs, knowledge base, help centers, URLs, and PDFs.
  • You can install the bot on community channels and let the bot auto-respond to queries. You can also embed the bot on a webpage or install it within your product.
  • Since you’ve trained your bot on content from various sources, it has all the knowledge it needs to answer questions efficiently. This saves you time from constantly digging out resources and reference articles since the bot also shares the links.
  • The bot having been selectively trained, only knows the things you want it to know, therefore, the answers are also accurately only referenced from the sources you shared.

Train the bot on your help centers, online knowledge base, and more

How to setup the bot?

Step 1: Signup for Threado AI and train the bot on online help centers, docs, knowledge bases, PDFs, and Slack or Discord community conversations.

Step 2: Setup the bot to make it your own by adding icons, brand colors, and default responses.

Step 3: Test the bot by asking questions from every source that the bot has been trained on. Once you’re satisfied with the answers, move on to the installation stage.

Step 4: Copy the embed code and paste it on the desired webpage where you want the bot to be, install the chat widget within the product for easier access to the users, and install it on specific channels in your community.

Web widget embedded within the product

Get started with Threado AI

Declining Usage Patterns

How frequently are user users using your product? Keep an eye on how often customers are using your product or service. A sudden drop in the frequency of use can be a strong indicator of potential churn. Along with the frequency, it’s almost important to see the duration of time people spend on the app. A significant reduction in the time spent can signify waning interest.

Once you’ve identified patterns of product usage, you can dig deeper to understand feature-level utilization. Are customers using the product in a way that makes it worth what they’re paying for? Monitor which features or components of your product customers are using. If they start neglecting core features, it could signal dissatisfaction or a shift in their needs.

What can you do about it?

Any of the above-mentioned patterns are a wake-up call for you to reach out to your customers and talk to them about what’s going on. Segment customers based on their usage patterns and tailor your communication and marketing efforts accordingly. For instance, offer feature-specific tutorials or promotions to re-engage them. Understand if there are any changes in their needs and as much as possible, help them recognize the value of the product for their updated requirements.

Frequent Support Interactions

An increase in support tickets might be indicative of an increase in issues with the product. Although great support can help reduce churn, an overall increase in support tickets isn’t a great sign of a self-supporting product. Additionally, try to understand these patterns and what issues occur regularly. Identifying common issues will help pinpoint recurring problems and their root causes. On top of that, always keep an eye on response time. Analyze how quickly support issues are resolved. Delays in addressing customer problems can lead to frustration and eventual churn.

What can you do about it?

By constantly addressing the type of questions customers ask, you can use that knowledge to improve your help centers and improve self-help options. By using Threado AI, you essentially get the entire view of all the questions being asked. You can monitor all the support tickets and see which ones have been resolved and which ones are open.

Negative Feedback or expectations

Constantly talk to your customers or have surveys to understand how their experience is going with the product. Identify the negative feedback and categorize it based on how it can be fixed. Whether it has to do with support, UI/UX, pricing, etc. Keep feedback channels constantly open so customers can share their experiences whenever they want to.

Use sentiment analysis tools to gauge the severity of negative feedback. Are customers mildly dissatisfied, extremely upset, or somewhere in between? If it’s within a closed community like Slack, Discord, or Discourse - you can use Threado to understand negative sentiments and take action accordingly.

What can you do about it?

Respond to negative feedback promptly and professionally, acknowledging the issues and expressing your commitment to resolving them. Use feedback as a source of insight for product enhancements or service improvements. The negative that was identified and categorized can be used to understand what needs improvements the most and prioritize changes accordingly.

Lower churn is better for revenue

Preventing customer churn is a continuous process that requires vigilance and a customer-centric approach. By identifying the right signals and leveraging customer support as a key component of your retention strategy, you can proactively address issues, enhance customer satisfaction, and ultimately reduce churn rates. Remember that retaining existing customers is often more cost-effective than acquiring new ones, making it a vital aspect of long-term business success.

Start your 21 day free trial
Start your 21 day free trial
Start your 21 day free trial

Explore other apps

No items found.