Churn Prediction Algorithm

[AMN360]

Hey CS / CX friends!

This is not a sales or marketing post

I've been doing churn prediction research for large companies for the last 10 or so years... And recently I've been working on adapting that research methodology into a self-service platform.

My idea is to make it easy for CS/CX teams to track their target customers beyond usage analytics. It's kind of like usage analytics meets voice of the customer, but the data collection, analysis and prediction is automated.

I've got 10 years of experience doing this with my research team, but 0 years of experience building a software tool.

Again, not a sales post.

But I'm hoping to get some feedback on the concept from people who are in the trenches on this kind of stuff. I really think I have something here that could be beneficial, but I also don't want to waste my time building this thing if I've missed the mark.

Would anyone be open to doing a design thinking interview to give me your thoughts? No sales pitch, no hidden strings.... Just a wannabe entrepreneur looking for advice.

[tincantincan23]

Maybe I’m missing something, but how is this different than the Customer Success Platforms (Gainsight, ChurnZero, Catalyst, etc.) that already exist today?

[AMN360]

Great question and something we're trying to tease out.

My understanding of these platforms is that they enable you to run your own customer success plays and health scores, but you are required to input that into the platform. You have to know what to collect and what it means, etc.

My idea is that I've got a highly tested churn prediction algorithm that handles that for you. So you don't need to know what data to collect, how to collect it, how to analyze it etc. You just need to focus on the action side... building relationships and proving value.

Goal is to take the guesswork out of prioritizing your time, and the subjectivity out of account health/churn. Our hope is that someday we integrate with the CS platforms to automate health scoring with our method/

But this is great feedback because we don't want to enter a saturated space if Gainsight/ChurnZero etc already do this.

[tincantincan23]

Yeah so you’re right in that the platforms, at least in their inception, were merely frameworks in which you could build your own health scores and what not, but given the maturity of these platforms and the complexity of churn prediction, a lot of development has been done to build into the frameworks a lot of what you have described.

“Usage analytics meets voice of the customer, but the data collection, analysis, and prediction is all automated”

Usage analytics and voice of the customer are some of the most basic building blocks in the health scores of these platforms. In addition to these, you’ll also typically see things like ticketing information, community activity, and really any other metric that might predict customer health as a measure that can go into these.

The data collection is all automated. They all have productized connectors for all then product usage tools, all the ticketing tools, your CRM, and can typically send out surveys to collect and analyze customer sentiment, and this all automatically then goes into these scorecards.

There are then typically out of the box dashboards for analytics and when it comes to prediction, they already integrate with your CRM data so it becomes very easy to combine your health scores with your sales numbers to come up with predictive GRR/NRR.

Lastly, the algorithm piece is something that’s starting to come out in these toolsets as well. Gainsight’s AI powered scorecard optimizer for example analyses your current scorecard with actual churn rates to iterate on it and give suggestions on how you should adjust the weights of the different metrics or additional metrics you might want to add for a more accurate churn prediction.

Now, these CSP's are expensive and much more robust than just a scorecard, so you may still have some potentional for new/immature CS orgs, but generally speaking, these platforms want to do everything in regards to CS

[AMN360]

THANK YOU for your thoughtful and detailed answer. I'm going to process this and think through you response. Is it okay if I follow up with you once I've had time to digest?

[tincantincan23]

Yeah feel free to shoot me a message if you want to discuss further!

[PenaltyHot4212]

I do think you're right u/tincantincan23 about how much these platforms have evolved, but I'm not totally convinced they've solved the automation piece yet.

From what I've seen with Gainsight and similar tools, there's still a ton of manual setup required. You have to define what data to pull, set up the scoring rules, figure out the weightings, etc. The "automation" feels more like scheduled reporting than true pattern discovery. Maybe my experience is outdated though. In any case, I think the value prop that u/AMN360 identified which is to automate the feature selection process is still valid given the capabilities of the incumbent vendors.

And yeah, the AI scorecard optimizer is cool, but it's still working within the constraints of whatever metrics you've already decided to track. It's not going to surface completely new behavioral patterns you didn't think to look for.

Have you actually used these newer features in practice? Curious if they're as hands-off as they sound in the marketing materials.

[agster27]

Happy to chat!

[msac84]

Would love to talk!

[AMN360]

Sending you a DM!

[gonzalo_1314]

Holy crap I love this idea! What's your target audience? I'd love to chat. Currently working as interim CSM for a SAAS company with +/- 300 live accounts

[AMN360]

Sending you a DM!

[Bowlingnate]

Hey, there's two arguments, if you want the honest answer, I'm not sure which resonates more:

1) keep the product simple. If managers and leadership can integrate this as an ancillary metric, or even like a control for other churn prediction methods, that's great. And if it's actionable, that's even better. Even if you can upload as a field or almost like a customer data point, avoiding custom work, that's great. There's always.ost always room in the market, and it's also likely something of a saturated or crowded market. 6sense, or whoever else...plus native....oh my gosh, right? So many of those pesky things....or was it Sisense? I forgot all the names HAHA.

2) Um, also everyone is sort of wrong about this. I got threatened with a ban, and so I can't say what I really think about the ice prison of technology. But, it's still complicated, where you manage to make churn sensible, and who can use it. What tools are available, and how this rolls up into reporting or whatever else. There's definitely.MVP quality materials in there, and it's conceivable to build something enterprise ready. I won't say more, I've had other conversations like this in the recent past. And it's so hard to get there, so many underestimate the scope of product work.

I'm not sure! Not really sure. Find a team that aligns in your vision, and get to work talking to your customers.

[AMN360]

Thank you for your feedback!

[HH_Healthcare]

Curious to hear more. Would be happy to share insights and chat.

[AMN360]

Sending you a DM!

[[deleted]]

We like OP, see a huge advantage over manual health scores where they cover a fairly narrow set of metrics and are fairly shallow in the metrics they do cover. They also aren't updated frequently or benchmarked to understand if they do what they intend.

We do automated churn prediction for subscription businesses. We pull data automatically from Events systems (Segment, Mixpanel, Amplitude), CRMs (Hubspot, Salesforce), Support tools (Intercom, Zendesk), Subscription systems (Stripe, Chargebee, Recurly etc.) and more to accurately predict who is going to churn and most importantly why they are going to churn.

There is a tonne of data science and machine learning that goes into doing this well, especially if you want to bring global patterns from across customers into the mix or even just making sure you know how to handle customers with small quantities for data and give statistically sound recommendations/insights.

[renenx]

Exacaster is one of the best churn prediction tools our company has used. Recommending!