CHURN ANALYSIS FRAMEWORK

SITUATION ASSESSMENT

Your Current State:

• MRR: $3,000
• Customers: 50
• Monthly Churn Rate: 6%
• Churned customers last month: 3 customers (50 × 6% = 3)
• Data Available: Stripe only
• Current Knowledge: “We don’t know why people are leaving”

Your 6% churn rate vs. industry benchmark:

• B2C SaaS acceptable: 3-5%
• B2B SaaS acceptable: 1-2%
• Your rate: MODERATELY HIGH - Above acceptable range, indicates value delivery or product-market fit needs attention

Impact of current churn:

• Losing 3 customers/month at $60 average = ~$180 MRR lost monthly
• Annualized: $2,160 MRR erosion
• This is 72% of your annual MRR growth potential

STEP 1: CHURN SEGMENTATION

First priority: Categorize your churned customers

Go into Stripe and review your last 3 churned customers (and ideally the previous 3-6 months for pattern visibility):

Voluntary Churn (customer chose to leave):

• Clicked “Cancel subscription” in your app
• Emailed requesting cancellation
• Actively chose to stop service

Involuntary Churn (payment failure):

• Failed payment with no successful retry
• Expired card not updated
• Insufficient funds
• Bank declined transaction

Action: Create a simple spreadsheet with last 3 months of churned customers:

Expected breakdown:

• If >50% involuntary: Payment recovery is your highest ROI fix
• If >50% voluntary: Exit surveys and behavioral analysis needed
• Mixed (40-60%): Implement both approaches

STEP 2: EXIT SURVEY FRAMEWORK

Since you only have Stripe data, exit surveys are your primary research tool.

Immediate Action: Survey Recent Churns

Send this email to your 3 most recent voluntary churned customers TODAY:

Subject: Quick question about your experience with [Product Name]

Hi [Name],

I noticed you cancelled your [Product Name] subscription. As the founder, I'd really appreciate understanding what happened - it genuinely helps me build a better product.

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

Common reasons others have shared:
- Not using it enough
- Found an alternative
- Too expensive for the value
- Missing features I needed
- Technical issues

Thanks for even considering it,
[Your name]
[Your founder title]

Key elements:

• Personal from line (your name, not “support@”)
• Send within 24 hours of cancellation
• Solo founder angle (builds empathy)
• Multiple choice options (reduces friction)
• Easy reply mechanism

Expected response rate:

• 30-40% with personal email (1-2 responses from 3 churns)
• Even 1 detailed response provides valuable signal
• Patterns emerge with 3-5 total responses

Response Analysis Framework

When replies come in, categorize into these buckets:

1. VALUE MISMATCH

• Signals: “Didn’t do what I expected” / “Not the right fit” / “Thought it would be different”
• Root cause: Messaging/positioning doesn’t match product reality
• Action: Review marketing copy, update to match actual use cases

2. PRICE SENSITIVITY

• Signals: “Too expensive” / “Can’t justify the cost” / “Budget cuts”
• Root cause: Price-value ratio misaligned
• Action: Consider cheaper tier, annual discount, or usage-based pricing

3. ALTERNATIVE FOUND

• Signals: “Switched to [competitor]” / “Using free alternative”
• Root cause: Competitive disadvantage
• Action: Feature gap analysis, roadmap reprioritization

4. FEATURE GAPS

• Signals: “Missing [specific feature]” / “Needs [capability]”
• Root cause: Product incomplete for use case
• Action: Tally feature requests, prioritize top 1-2 for roadmap

5. ENGAGEMENT FAILURE

• Signals: “Forgot about it” / “Didn’t use it enough” / “Too busy”
• Root cause: Failed to form habit, poor activation
• Action: Onboarding improvements, re-engagement emails

STEP 3: PAYMENT FAILURE RECOVERY

Even without knowing your voluntary/involuntary split, optimize dunning - it’s pure upside.

Stripe Dunning Optimization

Step 1: Enable Stripe Smart Retries

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

Step 2: Customize Dunning Emails

EMAIL 1: Day 0 (Immediate after failure)

Subject: Payment issue with your [Product Name] account

Hi [Name],

We tried to charge your card for [Product Name] but the payment didn't go through.

To keep your account active, update your payment method here:
[Secure Stripe Link]

Your account will stay active for 7 days while we sort this out.

Thanks,
[Your name]

EMAIL 2: Day 3

Subject: Quick reminder - payment method needs updating

Hey [Name],

Just a quick reminder that we still can't process your [Product Name] payment.

Update your card here: [Link]

It takes 30 seconds and keeps your account active.

Thanks,
[Your name]

EMAIL 3: Day 5 (More urgent)

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

Hi [Name],

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

If your card expired, update it here: [Link]

If something else is going on - budget concerns, not using the product enough - let me know. I'd rather work something out than lose you.

[Your name]

EMAIL 4: Day 7 (Final warning)

Subject: Final reminder - your account will be paused tomorrow

[Name],

Tomorrow your [Product Name] account will be paused and you'll lose access to:
- [Key feature/data they'd lose]
- [Important benefit/saved work]

Update your payment now: [Link]

If you want to cancel intentionally, that's completely fine - but if this is just a card issue, don't let that be the reason you lose access.

[Your name]

Expected recovery rate improvement:

• Default Stripe dunning: 15-20%
• Optimized dunning: 40-60%
• Additional customers saved: 0.3-0.5/month
• Additional MRR saved: $18-30/month = $216-360/year

STEP 4: TRACKING DASHBOARD

Minimum Viable Dashboard (Google Sheets):

Tab 1: Monthly Churn Tracking

Tab 2: Payment Recovery Tracking

Tab 3: Exit Survey Responses

STEP 5: IMPLEMENTATION CHECKLIST

Week 1: Data Foundation

• Export Stripe churned customers (last 3-6 months)
• Categorize churn: voluntary vs. involuntary
• Calculate current split percentages
• Send exit survey emails to 3 most recent voluntary churns
• Set up tracking spreadsheet with template above

Week 2: Survey & Dunning Setup

• Review any exit survey responses received
• Identify initial churn reason patterns
• Write 4 customized dunning emails using templates above
• Enable Stripe Smart Retries in dashboard
• Choose dunning automation tool (Zapier/Stunning/DIY)

Week 3: Automation Implementation

• Set up automated exit survey (Stripe webhook → email on cancellation)
• Implement dunning email sequence (Days 0, 3, 5, 7)
• Test dunning flow with Stripe test mode
• Schedule weekly 30-minute churn review with yourself

EXPECTED OUTCOMES

60-Day Results:

What you’ll know:

• Voluntary vs. involuntary churn breakdown
• Top 1-2 reasons customers leave (from surveys)
• Dunning email recovery rate baseline

Quantified impact:

• Involuntary churn reduction: 15-20% → 40-60% recovery rate
• MRR impact: +$18-30/month saved
• Total churn trajectory: 6% → 4.5-5.5% monthly
• Annualized MRR saved: $360-1,080

ROI calculation:

• Time invested: ~12-15 hours over 3 months
• MRR saved: $360-1,080 annually
• Hourly ROI: $24-72/hour of effort

START TODAY:

1. Send exit survey to your 3 most recent churns
2. Enable Stripe Smart Retries (5 minutes)
3. Set up tracking spreadsheet

Even 1 survey response gives you direction. 2-3 responses reveal patterns.