Twice in my career, I’ve tackled major churn problems—first as head of a large service organization in an Enterprise SaaS business, and later as CEO of a SMB-focused SaaS business. Fixing churn is a huge pain, but it’s also an incredible opportunity to master your business. Success requires two key investments: developing a foundational understanding of your business and organizing across functions to address the problem. I’ve found these investments consistently pay off, not only in reducing churn but also in preparing the business to tackle other challenges.

To solve churn, you need to develop a deep understanding of your business

Churn has many potential drivers. To effectively address churn, you need a foundational understanding of your business instead of making costly guesses about root causes.

Specifically, you’ll need to understand:

• How you compare to similar companies in terms of churn and expansion (and other metrics): Reviewing benchmarks gives you a clearer understanding of how your entire business is performing. Is your gross churn higher than comparable companies? Do you have lower NRR (and lower revenue expansion)? Are you driving less revenue with your marketing and sales expenditures? Benchmarks can point you to the right areas of focus.
• Customer experience from the customer’s POV: Understanding why customers churn requires talking with them about their experience. Engage with new customers about their sales and onboarding experience. Connect with established customers about their product usage habits, motivations, and obstacles to success. Speak with recently churned customers about their reasons for leaving—whether for competitors or alternative solutions. The customer’s perspective is your most crucial (and often most challenging) business insight.
• A detailed customer journey map and a quantitative review of where customers get ‘stuck’: Are customers reaching their first value milestone quickly enough? Are they using the product regularly? Are you seeing revenue growth? Which aspects of the product experience might be preventing customers from taking desired actions? These answers will guide your strategy.
• Optimal target customer (Ideal Customer Profile): Your current customer base may not be your optimal customer group—those who generate the highest lifetime margin relative to acquisition costs. You might be attracting customers who are simply easier to acquire.
• Competitiveness of your value proposition: Has your value proposition become dated as new competitors (including AI-first companies) enter the market? Are you missing any essential features?

So what’s the value of this deeper understanding of your business? An organization with this sort of foundational understanding will be able to driver better performance across many functions. You product management team will build a competitive, validated roadmap. Sales (and product marketing) will create better positioning and a better sales pitch. Marketing and Sales Ops will be able to better targeting your ICP because that is now clear.

Organizing for Churn Reduction Builds Cross-Functional and Experimental Muscle

The teams that are most successful at addressing churn have the following characteristics:

• They are cross-functional: Churn is a cross-functional problem, and so is its solution. While not every function will be involved in every initiative, most projects require collaboration across multiple teams.
• They rapidly validate before they build and iterate: While the solution to your churn problem may be obvious in some cases, more often you’ll identify an opportunity (e.g., “It would be nice if it was easier to create an account”) without a clear solution. To avoid wasting resources on ineffective solutions, successful teams validate their ideas through rapid experimentation before building.
• They are fully (or mostly) allocated to the effort: Since teams rarely find the perfect solution immediately—and because there are often multiple solutions to explore—you need a core team dedicated to this work as their primary responsibility.

This team structure can be applied to many non-churn opportunities in your business, including launching product-led growth initiatives, exploring new market paths, and other ambitious projects that represent major strategic shifts.

Every time my business has committed to reducing churn, both the team and the company emerged stronger from the effort.