CHURN ANALYSIS FRAMEWORK

SITUATION ASSESSMENT

Your current state:

• Product age: 2 months (very early stage)
• MRR: $5,000 from 30 customers
• Average revenue per customer: ~$167/month
• Monthly churn rate: 15% (4-5 customers/month)
• Data available: Stripe subscription data + cancellation email list

Churn severity: CRITICAL

Your 15% monthly churn is 3-5X higher than acceptable B2C SaaS benchmarks (3-5%) and 7-10X higher than B2B benchmarks (1-2%). At this rate:

• You lose half your customer base every 4-5 months
• Growth is severely hampered (need 15%+ monthly growth just to stay flat)
• This indicates either a fundamental product-market fit issue OR severe onboarding/activation failure

Good news: You’re only 2 months in. High early churn is common and fixable. Many successful SaaS products started with 10-20% churn and reduced it through systematic improvements.

STEP 1: CHURN CATEGORIZATION

Immediate action: Segment your churned customers from the past 30 days into these categories:

VOLUNTARY CHURN (customer chose to leave):

• Clicked “Cancel subscription” in your product
• Sent you an email requesting cancellation
• Downgraded to free tier (if applicable)

INVOLUNTARY CHURN (payment failure):

• Payment failed and Stripe couldn’t recover it
• Expired credit card, customer didn’t update
• Insufficient funds or card declined

How to find this in Stripe:

1. Dashboard → Customers → Filter by “Canceled”
2. Click each customer → View subscription
3. Look at cancellation reason:
   • “Customer requested” = Voluntary
   • “Payment failed” or “Card declined” = Involuntary

Create this breakdown:

Last month's churned customers: [4-5 customers]
- Voluntary: _____ customers (_____%)  
- Involuntary: _____ customers (_____%)  

Your next steps depend on this ratio:

• If >50% involuntary: Focus on payment recovery (see Step 3A)
• If >50% voluntary: Focus on understanding why they left (see Step 2)
• If roughly 50/50: Implement both strategies in parallel

STEP 2: EXIT SURVEY FRAMEWORK

Why this matters for you:
At 2 months old with only Stripe data, you have LIMITED visibility into customer behavior. Exit surveys are your fastest path to understanding what’s broken.

Exit Survey Design

Send this email within 24 hours of every cancellation:

Subject: Quick question about [Your Product Name]

Hi [Name],

I noticed you canceled your [Product] subscription. As the founder, I'd really value understanding what happened - your feedback directly shapes what I build.

Would you mind sharing why you decided to cancel? Just reply to this email.

Common reasons I've heard:
- Didn't use it enough to justify the cost
- Found a different solution
- Missing features I needed
- Too complicated to set up
- Didn't do what I expected

No hard feelings either way - I just want to build something people love.

Thanks,
[Your Name]
Founder, [Product Name]

Expected response rate: 30-40% (2-3 responses per week at your scale)

Response Categorization Framework

As responses come in, tag each with one of these categories:

1. EARLY CHURN / NEVER ACTIVATED

• Examples: “Signed up but never really got around to using it”, “Too complicated to get started”
• Root cause: Onboarding failure or activation barrier
• Priority: HIGH (if >40% of responses)
• Intervention: Improve onboarding flow, add personal founder outreach

2. VALUE MISMATCH / WRONG EXPECTATIONS

• Examples: “Thought it did [X] but it doesn’t”, “Not the right fit for my use case”
• Root cause: Marketing messaging doesn’t match product reality
• Priority: MEDIUM-HIGH (if >30% of responses)
• Intervention: Review marketing copy, survey retained customers

3. PRICE SENSITIVITY

• Examples: “Too expensive for what I was getting”, “Found a cheaper alternative”
• Root cause: Either pricing is wrong OR you’re not delivering enough value
• Priority: MEDIUM
• Intervention: Calculate customer LTV, research competitor pricing

4. FEATURE GAPS

• Examples: “Missing [specific feature] that I need”, “Doesn’t integrate with [tool]”
• Root cause: Product roadmap misaligned with customer needs
• Priority: LOW-MEDIUM (features rarely solve churn at this stage)
• Intervention: Tally feature requests, prioritize top 1-2

5. ENGAGEMENT FAILURE / FORGOT ABOUT IT

• Examples: “Honestly just forgot I was paying for it”, “Got busy and stopped using it”
• Root cause: Product didn’t become a habit
• Priority: HIGH (if >30% of responses)
• Intervention: Add re-engagement emails, weekly value reminders

STEP 3A: PAYMENT FAILURE RECOVERY

If 30%+ of your churn is involuntary (failed payments), implement this immediately.

Stripe Optimization Checklist

Action 1: Enable Smart Retries

1. Log into Stripe Dashboard
2. Settings → Billing → Subscriptions and emails
3. Toggle ON “Smart Retries”

Action 2: Personalized Dunning Email Sequence

EMAIL 1: Immediate (Day 0)

Subject: Quick heads up - payment issue with [Your Product]

Hi [Name],

Your payment for [Product] didn't go through today. This happens sometimes - expired cards, bank flags, etc.

Update your payment method here: [Stripe Customer Portal Link]

Your account stays active for 7 days while we sort this out, so no rush.

Thanks,
[Your Name]

EMAIL 2: Reminder (Day 3)

Subject: Reminder: Update your payment method for [Product]

Hey [Name],

Just following up - we still haven't been able to process your payment.

To keep your account active: [Update Payment Link]

Best,
[Your Name]

EMAIL 3: Urgent (Day 5)

Subject: [Name], your [Product] account will be paused in 3 days

Hi [Name],

Your payment method still isn't working, and your account will be paused in 3 days.

If budget is tight right now or you're not using [Product], let me know - I'd rather work something out than lose you over a card issue.

[Your Name]

EMAIL 4: Final Warning (Day 7)

Subject: Last chance to keep your [Product] account

[Name],

Tomorrow your [Product] account will be canceled and you'll lose:
- [Your data/work/settings specific to your product]
- [Access to specific feature]

Update payment now: [Link]

[Your Name]

Expected recovery rate improvement:

• Default Stripe dunning: 15-20%
• Optimized dunning: 40-60%
• At your scale: Save 1-2 failed payments/month
• MRR saved: $167-334/month
• Churn reduction: 3-6 percentage points

STEP 3B: EARLY-STAGE ONBOARDING FIXES

At 2 months old with 15% churn, this is likely your #1 issue.

Diagnose Your Activation Problem

Export from Stripe for ALL customers (churned + active):

• Customer ID, Signup date, Status (active/canceled)
• Days as customer (for churned: signup to cancel date)

Analyze early churn pattern:

Canceled in <7 days: _____ customers (_____%)  
Canceled in 8-30 days: _____ customers (_____%)  
Canceled after 30+ days: _____ customers (_____%)  

If >50% cancel in first 30 days: Onboarding/activation failure (HIGH PRIORITY)
If >70% cancel in first 7 days: Expectation mismatch or immediate friction (CRITICAL)

Activation Audit

Answer these questions about your current onboarding:

1. What is the “aha moment” for your product?

   • The specific action where customer goes “Oh, this is valuable”

2. How many steps to reach that moment?

   • Count every click, form, configuration required
   • Target: <5 steps to first value

3. What % of signups reach activation?

   • If you don’t know: THIS IS THE PROBLEM
   • Benchmark: >40% activation is decent, >60% is good

4. Where do users drop off?

   • Which step loses the most people?
   • That’s your friction point

Immediate Onboarding Improvements

Fix #1: Personal Founder Outreach (Works at 30 customers, doesn’t scale)

Within 24 hours of signup, send:

Subject: Welcome to [Product] - I'm here to help

Hi [Name],

Thanks for signing up for [Product]! I'm [Your Name], the founder.

I noticed you just created your account. Have you had a chance to [complete activation action]?

If you hit any snags or have questions, just reply to this email - I respond to every message.

Looking forward to seeing what you build,
[Your Name]

P.S. - The fastest way to get value is to [specific 3-step instruction to aha moment].

Expected impact:

• 10-20% increase in activation rate
• Qualitative feedback on where users struggle

Fix #2: Value Reminder Email Sequence

Day 3 (if no activation):

Subject: Quick question about [Product]

Hey [Name],

I noticed you signed up for [Product] a few days ago but haven't [completed activation action] yet.

Is everything okay? Running into any issues?

Reply anytime,
[Your Name]

Day 7 (if still no activation):

Subject: Can I help you get started with [Product]?

Hi [Name],

I see you haven't had a chance to [activate] yet.

Would a quick 15-minute call help? I can walk you through [specific workflow] and answer any questions.

Grab a time here: [Calendly link]

Or if [Product] isn't the right fit right now, totally understand - just let me know.

[Your Name]

YOUR 3-WEEK ACTION PLAN

WEEK 1: Data Collection & Analysis

Day 1-2: Churn Categorization

• Export Stripe data for all churned customers (last 60 days)
• Categorize as voluntary vs. involuntary
• Calculate: Days from signup to cancellation for each
• Identify pattern: Most churn in <7 days? 8-30 days? 30+ days?

Day 3-4: Exit Survey Setup

• Draft exit survey email (use template above)
• Send to ALL recent churned customers (last 30 days)
• Set up automated send for future cancellations

Day 5-7: Onboarding Audit

• Map current signup → activation flow (every step)
• Identify “aha moment” for your product
• Calculate current activation rate (if possible)
• Note where you THINK users drop off

WEEK 2: Intervention Design

Day 8-10: Survey Analysis

• Review all exit survey responses
• Categorize responses (use framework above)
• Identify top 2 churn reasons
• Decide primary focus area

Day 11-14: Design Interventions

• Write personal welcome email (founder outreach)
• Write day 3 and day 7 re-engagement emails
• If payment failures: Write 4 dunning emails
• Enable Stripe Smart Retries

WEEK 3: Implementation & Tracking

Day 15-17: Launch Interventions

• Set up founder outreach email (automated or manual)
• Launch re-engagement sequence for inactive users
• Implement dunning emails if applicable

Day 18-21: Monitor & Measure

• Track new signups through updated onboarding
• Monitor exit survey responses
• Update tracking spreadsheet daily

TRACKING DASHBOARD

Tab 1: Monthly Churn Overview

Tab 2: Exit Survey Responses

EXPECTED OUTCOMES (60-90 DAYS)

Conservative estimate (60 days):

• Exit surveys provide 8-12 responses
• You identify top 2 churn reasons with confidence
• You implement 2-3 targeted interventions
• Churn reduction: 15% → 10-12% (3-5 percentage point drop)
• MRR saved: $500-834/month (3-5 customers retained)

Optimistic estimate (90 days):

• Onboarding improvements increase activation rate by 20-30%
• Payment recovery reduces involuntary churn by 50-70%
• Re-engagement campaigns save 1-2 at-risk customers/month
• Churn reduction: 15% → 7-9% (6-8 percentage point drop)
• MRR saved: $1,000-1,334/month (6-8 customers retained)

Why these numbers matter:

• At 15% churn, you need 15% monthly growth just to stay flat
• At 9% churn, you need only 9% growth - easier to compound
• Difference over 12 months:
  • 15% churn + 10.8% growth = 30 → 34 customers
  • 9% churn + 10.8% growth = 30 → 46 customers

MOST LIKELY SCENARIOS

Scenario 1: You’re attracting the wrong customers

• Symptoms: People sign up but immediately realize it’s not what they wanted
• Survey responses: “Not what I expected” / “Doesn’t do [X]”
• Fix: Update marketing messaging, add qualifying questions

Scenario 2: Onboarding is broken

• Symptoms: People sign up with good intent but never activate
• Survey responses: “Too complicated” / “Didn’t have time to set it up”
• Fix: Simplify onboarding, add founder outreach, reduce steps to value

Scenario 3: Product isn’t delivering value fast enough

• Symptoms: People use it briefly then abandon
• Survey responses: “Didn’t use it enough” / “Wasn’t getting value”
• Fix: Identify core value loop, make it faster/easier

The exit surveys will tell you which scenario applies to YOU.

IMMEDIATE NEXT STEPS

Do these in the next 48 hours:

1. Export Stripe churned customers (last 60 days)
2. Categorize: voluntary vs. involuntary
3. Send exit survey to ALL recent churns (use template above)
4. Enable Stripe Smart Retries (5-minute fix)
5. Set up tracking spreadsheet

Do these in the next 7 days:
6. [ ] Analyze survey responses (even 2-3 gives you direction)
7. [ ] Choose ONE focus area (onboarding, payment recovery, or messaging)
8. [ ] Draft intervention emails (use templates above)
9. [ ] Launch founder outreach for new signups
10. [ ] Schedule weekly churn review (15 minutes, every Monday)

Remember: At your stage, churn analysis is mostly qualitative (talking to customers), not quantitative (analyzing usage data you don’t have yet). Start with exit surveys. The answers will guide everything else.