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How to reduce churn (with subscription billing & AI-powered customer success)

Mastering Churn Reduction: Subscription Billing and AI-Powered Customer Success Unite
By Martin Kåver on July 10, 2023
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The Flawed Benchmark of Monthly Churn
Understanding the Drivers of Churn
How Younium's Subscription Management Solution Reduces Churn
How an AI-powered Customer Success Platform Reduces Churn
Avert Churn with the powerful duo:  Churned + Younium


“It is 10x more important today, than it was a few years ago, to retain and engage your existing subscriber base,” said Wolter Rebergen, Commercial Director of Younium, in a recent webinar. 

He attributed this renewed focus on customer loyalty to rapidly rising customer acquisition costs. 

“When customers leave or reduce how much business they do with you, it will certainly damage your software-as-a-service (SaaS) company’s reputation and financial health. This is a far from ideal situation, especially while mired in an economic downturn,” he added. 

Maarten Doornenbal, Co-Founder of Churned, went on to emphasize the urgency to get the highest possible renewal rates and prevent customer churn, by relying on the latest technologies. “B2B SaaS businesses may rely on a subscription hub integrated (like Younium) with an AI-powered customer success tool (like Churned) to predict and prevent customer churn. When done right, it can even help you increase revenue via upsells,” he added. 

Wolter shared in Maarten’s excitement about entering this new era of tech-enabled churn management. He remarked that these technologies signal a paradigm shift in the relationship that SaaS businesses have with their subscription and customer success data. 

Read on as these two industry experts deep-dive into ways to gain mastery over churn. 

The Flawed Benchmark of Monthly Churn  

Churn is fast becoming one of the most important metrics in boardrooms, as per Maarten. But the question is, is it interpreted correctly?  

Most SaaS industry commentators consider a 5% monthly churn to be acceptable. Wolter shared that this is a highly flawed benchmark. Over the course of a year, the 5% churn adds up, and suddenly your SaaS business is faced with a whopping 46% annual churn rate.  

That means you lose about half of your customers every year, damaging the company’s reputation and revenues badly. On top of that, in the current economic climate, your profits are further eroded for having to spend dearly (up to EUR 13,530) on each new customer acquisition.  

Hence, Wolter encouraged SaaS businesses to focus on reducing churn rates to the bare minimum. “And of course, the first step towards shrinking churn rate involves understanding why your customers are leaving or reducing how much business they do with you,” he added. 

Understanding the Drivers of Churn  

Every business has its unique struggles with churn and the associated loss of revenue. 

Wolter looks at churn as a natural phenomenon that occurs in any SaaS business. But he pointed out that the real challenge emerges when your customers start dropping off and you’ve no idea why it's happening or how to fix it. 

If you have been noticing customers dropping off your platform, here are some potential causes: 

1. Slow set-up and time to value: If you are not quick enough to demonstrate the return on investment (ROI) of your SaaS platform to customers, they will deflect and leave you for competitors.  
2. Poor onboarding and user experience: When your onboarding isn't successful or the user experience is not up to the mark, users will struggle to optimally leverage your platform. And you know you have lost the customer if the usage metrics are found to be dipping.  

3. Lack of standardized processes and automation: Every business is looking to reduce employees by using technologies that allow for streamlined workflows and automation of drudge work. They also prioritize aspects like on-time subscription billing and renewals. If your platform is not able to offer such features, then a brand that does will likely steal away your customers. 

4. Inflexible or complex pricing structures: It doesn’t help if your pricing is inflexible in situations like competitors slashing prices or your customers on a cost-cutting spree. Do keep in mind that customers are price-sensitive and likely churn if they do not have more cost-effective options to choose from. Or if your pricing structure is too complicated, customers may struggle to see value in what they're paying for.  

To eliminate churn, Maarten highlighted the need to deal with the root causes. For instance: 

  • If you are losing customers or revenue owing to complex pricing, choose to provide flexible subscription billing options.  
  • In case of low product usage (a very important predictor of churn), invest in proactive customer success management which enables timely signaling of the issue.  
  • If you forget to remind the customers about renewals, set automated reminders. 
  • To know more ways to combat churn, check out this article. 

Remember how Wolter talked about the growing importance of tech-enabled churn management? In the next two sections, we will explore how Younium and Churned individually aid in pulling customers away from cancelling their subscriptions with your company. 

How Younium’s Subscription Management Solution Reduces Churn 

What happens when maintaining records of customer details, generating regular invoices, and collecting payment data are streamlined and automated?  

Customers are likely to feel like their relationship is valued, leading to lower churn. 

Reduce churn

Here are some ways a subscription management solution like Younium can do all of this and more: 

1. Offering a single and accurate source of truth : For the longest time businesses have been manually calculating churn and other subscription metrics and entering them into a spreadsheet. But data thus secured tends to be error-laden, with redundancies, and not up to date.   

Younium offers access to cleaned subscription and revenue data, collated in one place, from different data sources. This gives a holistic picture of the business and makes it easier to arrive at better decisions to improve customer relationship management.  

2. Calculating churn and analyzing subscriber data: Using historic subscription data, updated in real-time, Younium can calculate subscriber churn, MRR churn, and even annual revenue churn. The platform also delivers insights on how to reduce churn by processing subscription and customer behavior data.  

3. Automating the quote to cash flow: Younium talks to other tools within the workflow, such as the finance and accounting systems, and ensures that customers always get the right invoice, and accommodate different pricing and currencies. It also automates renewal management so that you have the right conversations at the right time that ensure the continuation or upgradation of the business relationship.  

How an AI-powered Customer Success Platform Reduces Churn 

Customer success

A good customer success platform collects subscription and customer data from various sources and turns them into a score that helps you decide on the best actions to deal with at-risk customers. 

Churned does one better by adding AI capabilities to the mix.  

Our AI model learns from every action that you take. It also measures the impact of each action on the client's health.  

“If a pattern shows risk, AI will suggest a remedial measure. Once the action is completed, a new data point is created which is fed back into the models. And then, the models measure what was the effect of the action on the risk,” said Maarten.  


For example, if low SaaS product usage is identified as the driver of churn, AI may suggest sending an instructional onboarding video to users to fix the problem. Then, it will analyze what happened to the product usage metrics after sending this video. It will compare the predicted impact with the actual impact. And then, once it learns from that action, it will update future actions based on those learnings.  

Thus, with continuous learning, AI starts to make smarter, better, and more personalized suggestions in response to each churn risk scenario.   

Avert churn with the powerful duo: Churned + Younium

Unlock smarter churn insights, accurate subscription billing, and workflow automations, by integrating Younium with Churned.  

When an AI-powered customer success management platform (like Churned) integrates with a subscription management solution (like Younium), the latter offers rich customer data that helps improve behavior prediction.  

Meanwhile, Churned continuously analyzes the subscription data, booking data, and order data (sourced from Younium) to help your business make smarter decisions that reduce churn.  

Maarten added that the allure of integrating with AI-powered customer success platform is that it can deliver more accurate churn predictions, work well with exceptions and edge cases, and proactively improve on its suggestions and predictions.  

Watch our full on-demand webinar to find out more about how Churned and Younium can better support churn reduction, and get in-depth answers to relevant FAQs. 

Published by Martin Kåver July 10, 2023

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